The die has been cast. Budget 2018 has been read and the grandstanding in Parliament by our so-called representatives has begun with the so-called budget debates. Bacchanal and confusion, yet again.
The budget was, for me, a mix of good, bad and ugly – pretty much like the 1966 western film classic. Of course, one person’s good may be another’s horrid but let’s delve into what was said and some of the possible implications.
It came as no surprise that the budget for fiscal 2018 is another “deficit budget” with revenues lower than expenditures. Incidentally, readers might be interested to know that the last time the national spending was within the limits of the national income was 2008!
Several factors have accounted for these deficits including the fuel subsidy on gasoline that has been in place since 1974 or thereabouts; the increase in the size of the public sector over the years and with it an increase in the government’s wage bill; continued high food import bills; government subsidies to state enterprises including to T&TEC and WASA; inefficiencies at Petrotrin which have resulted in successive governments underwriting debts incurred at the state-owned oil company and, of course, government wastage, investments in vanity projects and general overspending.
Budget 2018 brought with it some incentives for agriculture, small business development, housing for low- and middle-income persons, for development of the creative sectors and tourism, to name a few.
With those incentives however came a lack of clarity on the governance and institutional frameworks for proper and effective monitoring and implementation. The budget allocations, which one presumes were indicative of Government priorities, also seemed not in sync with the “incentive” packages.
For example, the Agriculture Ministry again received the smallest share of the 2018 fiscal pie. With reduced revenues from the traditional oil and gas sectors and the need to reduce the food import bill as well as shift tastes from imported food, one would have thought the agriculture sector might have featured more prominently in the Budget. Alas this was not to be the case.
My take on the incentives to Tourism and the “wooing” of Sandals to set up shop in Tobago, is that this might have been a golden opportunity to link economic diversification to Agriculture and Tourism.
In the first instance the Minister of Finance stated categorically that “Sandals … will contribute significantly to the branding and marketing of Tobago as a tourism destination. It will also … provide a boost to stay-over arrivals and in the process, generate employment opportunities and spill over activity both in Tobago and Trinidad.” How will Sandals feed the occupants of its proposed 750-room hotel? With more imported food?
Then there is the déjà vu budget mention of the restructuring of CEPEP to include participation in agriculture. It is envisaged that the restructured CEPEP – the details of which are still unknown – is meant, according to the Budget to “… serve as an incubator for workers to develop their skills in the agriculture sector…”
There were some other issues left untouched in the budget presentation which I think are important to the way forward in the national attempt to achieve sustainable economic development.
Mention was not made that during the first three months of 2017 persons aged 15 to 29 years comprised 51.2 per cent of the unemployed, an estimated 14, 900 persons. According to the review of the economy for 2017 this represented a marked rise in youth unemployment from the preceding three-month period, October to December 2016, when a total of 10,900 young workers were without jobs. I don’t think these unemployment data are unrelated to the rise in youth involvement in crime.
On the issue of the shortage of foreign exchange and uncertainty in relation to the exchange rate, the Central Bank of Trinidad and Tobago reported that “… dealers on sales in excess of US$20,000 indicate that the demand for foreign exchange primarily came from the Retail and Distribution and Manufacturing sectors, the settlement of credit cards transactions and for the purchase of automobiles…”.
Clearly the 7 per cent tax imposed on online purchases in the last budget, and that was subject to public furore and threatened litigation, did not dampen the national appetite for “point and click” (online) shopping.
A few questions remain in my mind. Will budget 2018 really achieve any of the promises made to facilitate the change in national economic fortunes? Will the Government be serious, this time, about ensuring adequate regulatory and legislative frameworks to facilitate the changes we wish to see?
Sad to say, I’m not hopeful. On the consumer side, will we cut our cloth to suit the prevailing circumstances, or will we continue to spend on foreign goods as a misguided symbol of our development status in which we see foreign as better?
What happens to the T&T economy over the next few months requires all hands on deck – not just ‘d Government’. What also is needed is an associated change in our national psyche – we really must collectively think and act differently.
That might be the biggest challenge. Are we up to it? Time alone will tell but as Black Stalin says, “…we can make it if we try, just a little harder”. That’s my point of view.