TODAY IS BUDGET DAYBy Clint Chan Tack and Sean Douglas Wednesday, September 8 2010
NO Alutrint aluminium smelter, no rapid rail and no property tax. Prime Minister Kamla Persad- Bissessar yesterday disclosed that Finance Minister Winston Dookeran will make these announcements when he presents the 2011 Budget in the House of Representatives at about 1.40 pm today.
Contacted late yesterday evening as finishing touches were being made on the Budget, the Prime Minister gave Newsday this response when she was asked what specific measures would be announced today. “No to Alutrint, no to rapid rail and no to the PNM property tax.”
Coincidentally, Opposition Leader Dr Keith Rowley has a question on today’s House Order Paper which asks Government to indicate whether or not it intends to stop the Alutrint aluminium smelter project. The question is directed to Energy Minister Carolyn Seepersad- Bachan.
In a subsequent statement, the Office of the Prime Minister reiterated that Government will repeal the property tax regime and revert to the prior method of taxing lands and buildings. “Those detailed calculations we will present during the Budget debate. We will give taxpayers a moratorium so that they will not have to pay in 2010,” Persad-Bissessar stated.
Stating that today’s Budget will be the first offering of her administration’s political principles, administrative policies and fiscal plans, Persad-Bissessar explained these will be “further spelt out in our supporting Budget documents laid in the House, then fully ventilated and elaborated upon in our ensuing Budget debate over the next days and likely weeks.”
“Additionally, we will go to the nation through all practical channels of communication and community, to provide more explanations, take comments and questions, give answers, allay concerns and learn wholeheartedly and transparently, submitting ourselves to share in the dialogue of democracy,” she declared.
Appealing for the nation’s patience and participation as the Government goes through the exercise of “getting our financials right,” Persad-Bissessar said, “I understand anticipation and anxiety, even on the part of some of our own team members. But we invite those who are genuinely civic-minded and committed to Trinidad and Tobago to lay down the weapons of distraction and take up the tools of construction, to band together in the task of nation building for which we are all responsible.”
The Prime Minister and Dookeran will meet with the rest of the Government’s parliamentary caucus at the Red House this morning at 11.30 am to brief them on the Budget’s details.
Sources yesterday revealed a decision was taken not to divulge the Budget’s contents before the caucus, and several government ministers who Newsday spoke with said they were unaware of allocations to their respective ministries. On Monday, Works and Transport Minister Jack Warner said he was hoping for a $4 billion allocation in the Budget to undertake major infrastructural works in the new fiscal year such as highway construction and programmes to reduce flooding.
Newsday understands the largest allocations in the Budget will go to national security, agriculture, health and education.
Sources said Persad-Bissessar is concerned about the scourge of crime, especially the alarming murder rate and has instructed Dookeran to ensure a large allocation goes to the National Security Ministry.
Sources said the Food Production Ministry will also receive an increased allocation to ensure TT becomes more self-sufficient in agriculture. In terms of health, sources said Government plans to build a hospital in Chaguanas and more money will be given to the Health Ministry to upgrade infrastructure at all health institutions. These funds would also be geared toward increasing the number of beds at all hospitals and improving the distribution of medicine.
The Education Ministry will receive more funds to facilitate proper infrastructure at all schools and the Biche High School, which remained closed since it was built almost ten years ago, is expected to be opened next year once its facilities are refurbished.
Newsday understands that Persad-Bissessar, a former education minister, is particularly concerned about the state of primary schools.
Legislative changes are expected to ensure that pensioners who experience difficulties in accessing pensions and grants would no longer face hardships and long waiting periods to cash their cheques.
Dookeran is also expected to make a statement on the future of former financial powerhouse CL Financial and its subsidiary Clico. Sources said Dookeran submitted a report to Cabinet which said Clico’s policyholders can receive only principal and no interest on their investments over a five-year period, “provided there is a further injection of capital.”
This was based on the findings of an earlier report submitted by a Dookeran-appointed team, led by former bank executive Steve Bideshi. Newsday understands the report recommended the disposal of some valuable, non-core assets of the CL Financial Group. Sources said
Dookeran may make an announcement in today’s Budget, which would signal the orderly disposal of Clico along with other CL Financial’s jewels.
Up to late yesterday evening, Dookeran was engaged in a series of meetings at the Eric Williams Financial Complex, Port-of-Spain, working down to the wire on the Budget. Repeated efforts to contact him yesterday were unsuccessful. Newsday also understands the Budget was the sole item on the agenda of the Cabinet’s finance and general purposes committee which met earlier in the day at the Office of the Prime Minister in St Clair.
Government senator Dr Patrick Watson, an economist who has been actively involved in the Budget’s preparation, told Newsday the Government’s philosophy is to put the economy on an even keel and find ways to stimulate growth.
Stating the economy did not permit goodies to be shared out freely at this time, Watson said,“It is not going to be a Santa Claus budget.” However Watson added there will be no repressive measures in the Budget that will make people “bawl for murder.”
Explaining that no budget will ever be able to please everyone, Watson said, “We (Government) are going to have to keep our (election) promises.” Given the challenges which the country now faces, Watson said it was more likely that these promises will be implemented incrementally rather than “all in one shot.”
He added Government will not assume it has all the answers to solve the country’s economic problems. “We will listen to what people have to say.”
Government officials yesterday said the Budget may be pegged against an oil price in the range of US$50 to US$60 per barrel and a gas price of between US$2 to $3 per mmbtu. They estimated the size of the budget to be in the $40 to $50 billion range. The 2010 Budget passed last September by the then PNM government was $44 billion based on an oil price of US$55 per barrel and a gas price of US$2.75 per mmbtu. Economist Indera Sagewan Alli said today’s Budget will be the People’s Partnership’s most important policy statement outside of its election manifesto. She said Dookeran must be very clear on the way forward because right now, “the economy is going nowhere.”
With global oil prices hovering between US$70 to $80 per barrel, Sagewan Alli said Dookeran needed to carefully study the oil futures market before settling on an oil price because this has an implication for the conditions whereby money can be withdrawn from the Heritage and Stabilisation Fund. With respect to the gas price, Sagewan Alli felt a US$2.75 or US$3 per mmbtu price was reasonable.
While expecting significant allocations for national security, education and health, Sagewan Alli said she hoped Government would give larger allocations to agriculture, tourism and manufacturing in order to reduce the country’s dependence on the energy sector. She also hoped Government would find a way to implement a national health insurance system. Health Minister Therese Baptiste-Cornelis recently expressed optimism there could be greater funding for the country’s regional health authorities (RHAs) in the Budget.
Sagewan Alli urged Dookeran to find ways to stimulate private sector activity in the economy and not follow the PNM’s trend of Government being “the only game in town” when it comes to expenditure. In this regard, she hoped there would incentives in areas such as housing construction. Housing Minister Dr Roodal Moonilal said Government plans to build 6,000 houses throughout the country next year.
Sagewan Alli advised Government to carefully select any large projects it undertakes on a cost- benefit analysis. Several mega projects were undertaken under the PNM and many, such as the Brian Lara Stadium, are still to be completed.
