Un­der the weight of shrink­ing fis­cal space, weak eco­nom­ic growth and mount­ing debt oblig­a­tions, T&T’s pub­lic fi­nances are fac­ing in­creas­ing­ly hard choic­es.

The Au­di­tor Gen­er­al’s 2025 Re­port, laid in Par­lia­ment on April 24, has brought those is­sues in­to sharp fo­cus, pro­vid­ing a sober­ing snap­shot of a coun­try run­ning out of easy op­tions.

For econ­o­mists Dr Vanus James and Mar­i­ano Browne, the re­port is less about ac­count­ing ir­reg­u­lar­i­ties and more about the struc­tur­al pres­sures now con­fronting fis­cal pol­i­cy.

The Au­di­tor Gen­er­al is­sued a “qual­i­fied opin­ion” on the pub­lic ac­counts for fis­cal year 2024/25, pre­pared on a sim­pli­fied cash ba­sis.

James out­lined that as in pre­vi­ous years, the qual­i­fi­ca­tion arose from per­sis­tent weak­ness­es: ma­te­r­i­al dis­crep­an­cies in val­ue-added tax and per­son­al in­come tax fig­ures across the Trea­sury and In­land Rev­enue De­part­ment’s records, and the ab­sence of doc­u­men­ta­tion to sup­port $1.59 bil­lion in pay­ments—about 2.43 per cent of the $65.45 bil­lion in to­tal ex­pen­di­ture.

The re­port al­so doc­u­ments con­tin­u­ing fail­ures in record keep­ing, weak fi­nan­cial con­trols, ex­pired leas­es, and un­ver­i­fied rental pay­ments across min­istries and agen­cies.

A re­cur­ring theme in the Au­di­tor Gen­er­al’s re­port is the weak con­nec­tion be­tween stat­ed gov­ern­ment pol­i­cy and ac­tu­al spend­ing out­comes, lim­it­ing val­ue for mon­ey.

To­ba­go fea­tures promi­nent­ly in this re­gard as James told the Busi­ness Guardian that near­ly $1 bil­lion was spent by the end of Fis­cal 2024/25 on con­struct­ing a ter­mi­nal and as­so­ci­at­ed fa­cil­i­ties at the ANR Robin­son In­ter­na­tion­al Air­port, yet the re­port not­ed that an open­ing cer­e­mo­ny for “prac­ti­cal com­ple­tion” was held in March 2025 even as the Min­istry of Fi­nance could not con­firm when the ter­mi­nal would be of­fi­cial­ly opened.

Such is­sues, while se­ri­ous, have be­come fa­mil­iar fea­tures of lo­cal gov­er­nance over time.

What makes this year’s re­port more alarm­ing, econ­o­mists ar­gue, is the macro­eco­nom­ic con­text.

James con­tend­ed that the re­port “has a dark­er side” as it pro­vides strong ev­i­dence of a sound ba­sis for the re­cent neg­a­tive out­look of the in­ter­na­tion­al rat­ing agen­cies tasked with as­sess­ing the trend ca­pac­i­ty of the Gov­ern­ment to meet its debt oblig­a­tions over time.

“For fis­cal 2024/25, to­tal ex­pen­di­ture was $65.5 bil­lion. To­tal rev­enue, $60.1 bil­lion. On the face of it, this in­di­cates a man­age­able deficit of 3.1 per cent of the GDP of about $174.4 bil­lion for 2025. How­ev­er, more trou­bling is the fact that, at an av­er­age tax rate of 27 per cent, earned rev­enues over the pe­ri­od were $46.6 bil­lion.

“Of this, the oil com­pa­nies con­tributed a mere $5.7 bil­lion, far be­low their con­tri­bu­tions in the heady ‘God is a Tri­ni’ days. An­oth­er $13.5 bil­lion of the rev­enues came from bor­row­ing of $10.7 bil­lion and with­drawals from the HSF (na­tion­al sav­ings) of $2.8 bil­lion,” James ex­plained.

When matched against earned rev­enue, ie, with­out the bor­row­ings and draw­downs, he fur­ther not­ed the pri­ma­ry deficit was $18.9 bil­lion or 10.8 per cent of the GDP.

“This is the hid­den threat to sus­tain­abil­i­ty of the na­tion­al bud­get­ing and deficit fi­nanc­ing strat­e­gy re­vealed by the Au­di­tor Gen­er­al. It con­cerns every cit­i­zen be­cause it points to grow­ing na­tion­al in­debt­ed­ness that gov­ern­ment must ad­dress with sound pol­i­cy,” James cau­tioned.

He fur­ther cit­ed that the ac­cu­mu­lat­ed na­tion­al debt to Sep­tem­ber 2025 was $117.5 bil­lion, about 86 per cent of GDP.

Of this, $81.2 bil­lion were in the form of out­stand­ing do­mes­tic bonds and trea­sury bills.

The oth­er $33.6 bil­lion took the form of for­eign debts to IADB, Ex­im Bank of Chi­na; CAF and oth­er in­ter­na­tion­al pri­vate mar­ket fa­cil­i­ties. The debt in­creased by $7.3 bil­lion above the $110.1 bil­lion for Fis­cal 2023/2024.

“So, its an­nu­al rate of growth was 6.7 per cent in fis­cal 2024/25. Ex­ces­sive debt is bur­den­some be­cause it must be ser­viced with in­ter­est and cap­i­tal re­pay­ments. Debt ser­vice pay­ments in Fis­cal 2024/25 were $14.4 bil­lion, a whop­ping 22 per cent of gov­ern­ment spend­ing. And debt ser­vice pay­ments were 4.2 per cent high­er than in fis­cal 2023/24, so the bur­den is grow­ing, not de­clin­ing. Ris­ing debt ser­vice pay­ments crowd out more use­ful types of spend­ing, in­clud­ing spend­ing on ur­gent­ly need­ed eco­nom­ic di­ver­si­fi­ca­tion,”James fur­ther out­lined.

Re­gard­ing the Ex­che­quer Ac­count, the re­port stat­ed this was over­drawn to a bal­ance of $51,939,835,864.83, an in­crease of $5,376,041,457.69 or 11.55 per cent when com­pared to the pre­vi­ous year’s fig­ure of $46,563,794,407.14.

This ac­count has been con­sis­tent­ly in over­draft since 2003, the re­port added.

It is against this back­drop that for­mer min­is­ter in the Min­istry of Fi­nance Browne ad­vised that the re­port must be read as a warn­ing about the nar­row­ing set of pol­i­cy op­tions avail­able to any gov­ern­ment.

He ar­gued that while the Au­di­tor Gen­er­al does not pre­scribe so­lu­tions, the arith­metic of pub­lic fi­nance now leaves lit­tle room for po­lit­i­cal com­fort.

“Or you raise tax­es,” Browne ob­served, not­ing that while this has not been ex­plic­it­ly stat­ed by the Au­di­tor Gen­er­al, it is one of the un­avoid­able op­tions fac­ing the Gov­ern­ment.

Browne point­ed to the pol­i­cy choic­es made over the past decade that have re­duced the tax base even as de­mands on the state have in­creased. Suc­ces­sive com­mit­ments not to im­ple­ment a tax rev­enue au­thor­i­ty, not to ful­ly en­force prop­er­ty tax­es, and to ex­empt pri­vate pen­sions from tax­a­tion have all con­tributed to what he de­scribes as “tax leak­age.”

At the same time, pub­lic ex­pec­ta­tions for ex­pand­ed gov­ern­ment spend­ing—in ar­eas rang­ing from wages to so­cial pro­grammes—have on­ly in­ten­si­fied.

The Au­di­tor Gen­er­al, Browne stressed, is not of­fer­ing an opin­ion on what the Gov­ern­ment should do.

In­stead, she is high­light­ing a struc­tur­al re­al­i­ty: every year, the amount re­quired to ser­vice debt ris­es, leav­ing less room for rou­tine ex­pen­di­ture. This dy­nam­ic, Browne ar­gued, helps ex­plain re­cent wage ne­go­ti­a­tions with pub­lic sec­tor unions, where the gov­ern­ment of­fered in­creas­es of five per cent rather than ten. “If you of­fer ten,” he asks, “where are you go­ing to get the rev­enue from?”

That ques­tion, Browne said, is the cen­tral one con­fronting the Min­istry of Fi­nance. It is not about ide­ol­o­gy or po­lit­i­cal pref­er­ence, but about fi­nan­cial ca­pac­i­ty.

The re­port, he added, is sim­ply stat­ing that the cur­rent ap­proach can­not con­tin­ue in­def­i­nite­ly.

How the prob­lem is ad­dressed—through tax­es, spend­ing re­straint, growth, or some com­bi­na­tion there­of—is a pol­i­cy de­ci­sion but ig­nor­ing the con­straints is no longer an op­tion, James and Browne con­tend­ed.