On Thursday, June 23, 2022, Farley Chavez Augustine, Assemblyman for the electoral district of Parlatuvier/L’Anse Fourmi/Speyside, Chief Secretary, and Secretary of the Division of Finance, Trade, and the Economy delivered the Budget Statement for Fiscal 2023. It was a long speech–73 pages long–and Augustine spoke for over four hours. Obviously, he had a lot to say.
I propose in this column to provide a summary of the statement as a basis for evaluative commentary in subsequent columns.
He presented total draft estimates of expenditure of $3.97 billion, broken down into recurrent expenditure of $3.07 billion, development expenditure of $900 million, URP expenditure of $59.59 million, and CEPEP expenditure of $53.17 million. He predicated the total expenditure on a forecasted National Budget of $57.4 billion and on an allocation of that budget of 6.9 per cent–the highest point of the allocation scale of 4.03 to 6.9 per cent decided by the Dispute Resolution Commission during the tenure of the first Chief Secretary, Hochoy Charles.
In comparison to Fiscal 2022, his 2023 estimates for both recurrent and development expenditure represent increases over the parliamentary allocations–$992 million in the case of the recurrent expenditure, and $636 million in the case of the development expenditure.
In respect of development, some of the areas to which funds have been allocated, subject of course to parliamentary adjustment, are E-IDCOT (Eco-Industrial Development Company of Tobago)–$15 million; VCEF (Venture Capital Equity Fund)–$9 million; construction of cruise ship berths–$10 million; agricultural access roads–$37 million; improvement of beach and landing facilities–$9 million; improvement, upgrade, and establishment of schools–$37 million; improvement of the housing stock–$64.3 million; upgrade and expansion of road infrastructure and protection of the coastline–$104 million.
The budget will be financed by taxes (on: income and profits; property; goods and services; international trade; non-tax revenue) of $219.24 million, which will be collected in Tobago. Augustine took the opportunity to note that, in the current scheme of things, taxes, fees, duties, and levies of companies with branches operating in Trinidad were not being paid in Tobago ‘in direct contravention of section 49(2) of the THA Act 40 of 1996’. He also noted the anomaly of taxes and import duties paid by residents of Tobago for goods landed in Trinidad being payable in Trinidad.
Apart from these taxes, the Finance Secretary is looking at possible development funding from the following sources: the CDB (Caribbean Development Bank)–$1.7 billion; the IDB (Inter-American Development Bank)–$43 million; FDI (Foreign Direct Investment); and investments by the diaspora (partly through public-private partnerships).
Augustine provides brief reviews of ‘the global economic outlook’, ‘the regional economic outlook’, ‘the national economic outlook’, and ‘Tobago’s economic outlook’. On the last-mentioned, we are told that, over the last decade (2011-2021), ‘there were seven years of declines, to the point where the island’s constant-price GDP in 2021 was equivalent to that of 2011, which means that the economic pie did not increase.’
We are also given the following facts about the economy:
The state sector contributed 48 per cent to the GDP, followed by the Finance, Insurance, Real Estate, and Business Services sector (28 per cent), then by the tourism sector (ten per cent), then by the agriculture and manufacturing sectors (two per cent).
The employment rate for the first quarter of 2021 was three per cent.
The share of the labour force in the state sector was 54 per cent, while in the private sector it was 46 per cent.
With the share of the labour force with tertiary education as the highest level of attainment being 17 per cent, the share with secondary education being 55 per cent, and the share with primary education being 28 per cent, ‘[t]he levels of education and skills point to an economy with weak capacity to adjust in a self-reliant way to the competitive challenges of economic development in the national and global process.’
The total liabilities of the THA as at December 13, 2021, were $738.1 million, apart from contingent liabilities of $225.8 million arising from bond financing, which is repayable by 2027.
The Finance Secretary concludes that the Tobago economic outlook ‘signals an urgent need for budget allocations in Fiscal 2023 to begin the process of strengthening the diversification and development foundations of the Tobago economy and the national economy.’
Augustine has themed his budget ‘Towards a smarter, greener, more autonomous Tobago’. For a smarter Tobago, he proposes, in part, to ‘accelerate the digital transformation of the operations of the THA to marry speed with efficiency’; ‘train, retool, and reskill public servants and public officials’; ‘promote greater public accountability for public resources’; engage the different business chambers and organisations to co-create solutions to their productivity problems; provide financial and technical assistance to businesses through the VCEF and the Business Development Unit; and ‘support research and development in food technology, agri-technologies, renewables and the general sciences’.
For a more autonomous Tobago, he has established a new Division–the Office of the Deputy Chief Secretary–with a Department of Inter-governmental Affairs with ‘the principal responsibility to secure self-government for Tobago in the shortest possible time.’
Chief Secretary Farley Augustine hypes the office with, in part, a statement of ‘the first major gain from a sufficient level of autonomy’: ‘it will allow Tobago to control and deploy its resources and plan its development in the context of the national economy wisely.’
And he is confident that budgetary plans will contribute critically to making Tobago into ‘the greatest little island on the planet.’
Evaluative commentary coming up.