Friday, September 10 2010

Government Senator and economist Dr Patrick Watson yesterday said the country could have been better off if the cash balances were higher.

Finance Minister Winston Dookeran on Wednesday in the 2011 Budget indicated the country’s cash balance moved from $17.7 billion in 2008 to $9.7 billion in 2009 and currently it stands at $5.4 billion. The cash balance at the end of September is estimated at $4.3 billion.

Speaking yesterday at the American Chamber of Commerce’s post-Budget panel discussion at the Hilton Trinidad in St Ann’s, Watson, who assisted in drafting the Budget, said Government was hopeful the Gross Domestic Product (GDP) would rise and the debt-to-GDP ratio would stay still.

“We cannot keep running deficits. The ideas behind spending the money using deficits is that it would result in productive activity,” he said.

To the private sector, he said, incentives were given so they could help the economy grow so there would be surplus next year. “So we won’t have to raise taxes on you, the amount of taxes you pay at the given rate would give us more money and we want to stop the accumulation of debt.

“It is dangerous to run budget deficits for too long that means accumulating the national debt,” he said.

Watson explained Government is constrained by the current situation as it can’t deal with everything hinting to the non-announcement of the minimum wage, adding the matter is being addressed.