INDEPENDENT Senator Amrita Deonarine has said it was too soon to tell how the 2022/2023 budget will affect TT. She made this observation during her contribution to the budget debate in the Senate.
Referring to an earlier contribution by Finance Minister Colm Imbert, Deonarine said some people are asking whether now was the time to breathe a sigh of relief because of the measures contained in the budget.
"I would say, not quite yet."
She praised Government for creating the Heritage Stabilisation Fund (HSF) and foreign reserves which have served TT well as buffers through challenging economic times and the covid19 pandemic.
Deonarine believed the ongoing Russian military action in Ukraine has been a blessing in disguise for TT, allowing it to gain more revenue from high oil and gas prices.
While this seems to be good news, Deonarine was concerned about whether the economy was resilient enough to take a hit of the magnitude of the pandemic or worse.
Deonarine was sceptical about the budget being pegged on oil and gas prices of US$92.50 and US$6 per mmbtu respectively.
Brent and West Texas Intermediate (WTI) crude oils were trading on Wednesday at US$92.56 and US$87.25 per barrel respectively. Natural gas was trading at US$6.430 per mmbtu.
Deonarine said the International Monetary Fund (IMF), in its world economic outlook on October 11, had forecast global growth to slow from six per cent in 2021 to 3.2 per cent this year and reach 2.7 per cent in 2023.
She added that this was reflective of the war in Ukraine and projected economic slowdowns in the US, European countries and China, as well as the lingering effects of the pandemic.
Against the background of higher fuel and food prices, Deonarine wondered how much of the extra income that people who no longer have to pay income tax would be able to save.
In his budget presentation on September 26, Imbert said the personal income-tax exemption limit would be raised from $84,000 to $90,000 a year. This means people earning $7,500 a month or less will now be exempt from income tax and would have an additional $1.500 per year in disposable income.
She was also concerned about the $5.453 billion allocated for various grants for vulnerable people through the Social Development and Family Services Ministry.
Deonarine referred to Social Development Minister Donna Cox's comments in the budget debate in the House on October 1 about how her ministry continues to collaborate with the police to combat fraud in accessing these grants.
Cox said, "Only recently we found cases where several adults were living in one household and were in receipt of public-assistance grants, despite owning a business, and despite the fact that they had meaningful employment."
There were also cases where people receiving disability grants from the ministry were fully employed.
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