To­mor­row is bud­get day, and the Min­is­ter of Fi­nance will de­liv­er his speech in his usu­al style. No one can pre­dict the fu­ture. How­ev­er, de­mo­c­ra­t­i­cal­ly elect­ed gov­ern­ments must ex­plain to cit­i­zens what fis­cal mea­sures are pro­posed to pro­vide for the run­ning of the coun­try and why. In the Unit­ed States there is the State of the Union Ad­dress which is more gen­er­al in tone. In Eng­land gov­ern­ment pol­i­cy is ar­tic­u­lat­ed through two ma­jor de­vices, the Throne speech which sets out the Gov­ern­ment’s leg­isla­tive agen­da for the year and the bud­get state­ment giv­en by the Chan­cel­lor of the ex­che­quer in the Low­er House of Par­lia­ment.

The bud­get de­bate which fol­lows Mon­day’s speech gives the Op­po­si­tion the op­por­tu­ni­ty to present a dif­fer­ent view and to sug­gest al­ter­na­tives. In the process the pub­lic learns how the fis­cal mea­sures will af­fect them and gives them the op­por­tu­ni­ty to make the nec­es­sary ad­just­ments. Or at least that is the the­o­ry.

Ul­ti­mate­ly gov­ern­ments are elect­ed to make the best de­ci­sions that they can in the cir­cum­stances and ex­plain why in broad terms. These are chal­leng­ing times. The en­er­gy sec­tor, the ma­jor for­eign ex­change earn­er, the dy­namo around which the econ­o­my re­solves is se­vere­ly chal­lenged. Nat­ur­al gas pro­duc­tion is 40 per cent low­er than the high­est pro­duc­tion of 4.2 bil­lion 13 years ago and trend­ing down­wards.

The post COVID re­cov­ery and the Ukraine war caused LNG and petro­chem­i­cal prices to rise in­creas­ing gov­ern­ments rev­enue, im­prov­ing the coun­try’s eco­nom­ic per­for­mance in the process.

The pos­i­tive im­pact of high­er petro­chem­i­cal and LNG prices is now re­ced­ing. There is no ob­vi­ous sec­tor that can have the same im­pact im­me­di­ate­ly. Nei­ther are there any new projects that could come on stream quick­ly. First, gas from the Lo­ran Man­a­tee field is un­like­ly to come be­fore 2027 and any ben­e­fits from suc­cess­ful deep­wa­ter ex­plo­ration is far away.

Giv­en these facts, na­tion­al in­come and gov­ern­ment rev­enue will stag­nate or de­cline even as the de­mands for in­creased ex­pen­di­ture come from all quar­ters. The cur­rent in­fla­tion­ary trend af­fects the Gov­ern­ment in the same way it af­fects the in­di­vid­ual con­sumer. The same amount of mon­ey will buy less. In ad­di­tion, the Gov­ern­ment must make wage set­tle­ments for the pe­ri­od stretch­ing back to 2013. This re­duces the Gov­ern­ment’s ca­pac­i­ty to be too am­bi­tious. WASA is an ex­cep­tion.

Rais­ing tax­es is not a re­al­is­tic op­tion giv­en pub­lic re­sis­tance to prop­er­ty tax and gov­ern­ment’s am­biva­lence over its im­ple­men­ta­tion. Can the sub­si­dies for elec­tric­i­ty, petrol, cook­ing gas, wa­ter, and the sea and air­bridge re­main at the cur­rent lev­els. These are dif­fi­cult po­lit­i­cal choic­es, but choic­es that must be made.

The last IMF Ar­ti­cle IV re­port not­ed that deficits would con­tin­ue in the medi­um term, and the Min­is­ter of Fi­nance has in­di­cat­ed that the 2024 Bud­get will be a deficit. This ap­proach can­not con­tin­ue in­def­i­nite­ly demon­strat­ed by the Bar­ba­dos and Ja­maica ex­pe­ri­ences. This is an op­por­tu­ni­ty to ad­dress the se­ri­ous ele­phant that has been ig­nored for so long. T&T must dig deep and find new for­eign ex­change gen­er­at­ing al­ter­na­tives to the en­er­gy sec­tor. If the min­is­ter ad­dress­es this weak­ness he will have done his coun­try a great ser­vice. We will find out to­mor­row whether it is busi­ness as usu­al, boom and bust or will we cre­ate new pos­si­bil­i­ties.