If there is one thing that Finance Minister Colm Imbert wants the country to take away from the 2021-2022 budget read on Monday, it is that Government is listening to the people and trying to address everyone’s needs.
Speaking at the Trinidad and Tobago Manufacturers Association’s (TTMA) post-budget seminar, at Hyatt Regency, Port of Spain on Tuesday, Imbert said from big to small businesses, to vulnerable groups the ministry and by extension the Government listened to what was needed, and made provisions to assist as many people as possible.
He again highlighted some of the provisions in the budget including cash cards for vulnerable groups for electricity and water, fuel – when the liberalisation of the fuel market is completed – as well as the removal of custom duties on electric vehicles. He also pointed out the tax incentives to boost businesses – tax holidays, reduced tax rates and tax exemptions – the abolishment of economic free zones to be replaced by special economic zones under an authority, mentorship programmes and special SME loans.
But there are still issues which the business community wants addressed – a permanent solution to the late payment of VAT returns being one of them. Panellists said while there were many good things in the budget questions still remain on if these provisions can be made and, if so how soon can they can get done.
Operating at a deficit
Government is still operating at a deficit of $9.1 billion, a little less than a billion more than last year’s deficit of $8.03 billion. However, Government plans to spend $52.4 billion – about $3 billion more than last year’s $49.6 billion.
Imbert spoke on the deficit, saying that one must realistically look at the expenditure of the country, especially in the face of a pandemic.
“This talk about balancing the budget is very theoretical,” Imbert said. “We were well on our way in 2018. We had the deficit down by three per cent, and things were going well. But then the energy sector started cutting back and of course in 2020 you had covid19.”
“Covid19 is an unprecedented shock, so all theories would go out the window. If you look at the world economy for 2020, the average deficit was 11 per cent of the world’s GDP.”
He said Government is faced with something that has never happened in the history of Trinidad and Tobago – dealing with an economic and health crisis at the same time.
He noted comments that TT should take a look at how countries like Jamaica managed expenditure but said TT is still unique as it spends at least three times more on its people than Jamaica does.
“Their per capita GDP is US$4,600. The per capita GDP in TT is US$15,400. So our per capita GDP is three times that of Jamaica. So, yes we want to balance the budget, but we also want to face reality. We have determined that our expenditure should be in the range of $50 billion or $40 billion otherwise you will put endless people on the breadline and sink several people into poverty.”
The country’s expenditure may also have something to do with Gover
