Finance Minister Colm Imbert yesterday defended his 2021/2022 Budget, saying that it was not as “draconian” as some people expected.
Imbert was the guest speaker at the Trinidad and Tobago Manufacturing Association’s (TTMA’s) post-Budget forum and said that the Budget was evidence that the Government was “listening” to all stakeholders.
“It was clearly not what people expected it to be,” Imbert said.
“If one looked at what is being said in the media, this supposed to be a draconian budget, but if one thinks about it very seriously a draconian budget would not have made any sense,” he said.
“We are well aware that businesses and individuals are struggling. We are well aware that any cutbacks by the Government, any drastic cut back that is, would stultify the economy and create more problems than it solves,” he said.
Imbert said the Government sought to make this Budget “completely different.”
Imbert rounded off last year’s expenditure at approximately $51 billion and this year’s budget is approximately just over one billion more.
Imbert said those who demanded that the Government cut expenditure to match income had “no idea what they were talking about.”
“We are running a $50 billion economy with little wastage in there. There’s very little you can cut, very few areas where we can reduce expenditure,” he said.
Imbert said the Government has come up with a system to provide support in the form of cash cards for the people to use to pay for electricity and water.
The cash cards and rebate system is the initial steps to offering those services at market rates instead of subsidised rates.
“We are going to ensure that the rates are put at the correct values but the people who are going to be hardest hit will be subsidised by way of these cash cards. So that’s our solution to this long-standing problem,” he said.
He said that this is a solution toward the previously existing and now untenable situation where State utilities needed billion-dollar bailouts.
“In one year, I think it was 2014, the fuel subsidy reached $7 billion. In fact over the years that the fuel subsidy has been in place, it has cost the State and taxpayers $30 billion,” he said.
He said people living in more affluent neighbourhoods should not be paying subsidised rates.
“The Budget is based on the Government listening to people. Doing a lot of quiet work in the background and then proposing and fashioning solutions that take in account what we are being told,” he said.
“The Budget is also evidence that this Government is listening to every interest group, whether it is big business, small business, middle-class people, trade unions, we are listening to every interest group and fashioning solutions where possible and where practical that would push the country forward,” he said.
He said that the Government knew it had to focus on the manufacturing sector, export and employment generation hence the alignment with the TTMA.
Imbert said that the Property Tax is only now in the data-gathering phase and only for residential and agricultural spaces.
“It should be obvious to those who want to hear, that this Government is listening,” he said.
“We are not seeking to deal with industrial properties at this time. We may do so later in the year,” he said.
He did admit that a massive shortfall in energy revenue has forced Government to suspend plans to remove taxes on building materials.
“The question of exempting building materials was something we had to take a good, hard look at when we realised we were having a substantial reduction in revenue,” he said.
“We had projected our revenue collection for 2021 to be about $42, $43 billion and after the first couple of months and production in the energy sector fell away just like that, gas production just dropped and at that time, oil and gas prices were not good, we were starting to lose a lot of revenue and when you’re in a situation like that you have to be responsible,” he said.
“So we kind of had to put the brakes on that,” he said.
Imbert said the Government still intended to provide relief on building materials on approved projects.
“We are committed to boosting the construction sector,” he said but added that the timing has to be right and there must be a resurgence of income from the energy sector.
Imbert said the Government re-engineered the current SME loan system and increased the loan guarantee from 75 per cent to 100 per cent and increased the repayment period from five years to seven years, all interest-free. The SME loans scope has also been expanded to include equipment for the business.
Imbert said the plan was to make it easier to qualify.
“All an SME has to do now is demonstrate that they are up to date with their NIS, with their tax returns and so on, up to 2018 and then you get to bring yourself up to date to 2020, 2021,” he said.