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Thursday 14 December 2017

2017/18 Budget Presentation



6:58 pm   Mon 2 Oct 2017

Budget Documents

The 2018 Budget Statement was released to the public via the Ministry of Finance's website this afternoon. You can download the entire document by visiting the website, or clicking the image below.

4:56 pm   Mon 2 Oct 2017

Budget Debate on Friday

After nearly three and a half hours, the 2017-2018 Budget Presentation has officially ended.

House adjourned to Friday, 6th October at 10 am, at which time Opposition Leader will start budget debate.

Stay with Newsday as we begin our post-Budget coverage.

4:54 pm   Mon 2 Oct 2017

Moving Forward

"We now have a window of opportunity for restructuring our economy"

"We must ensure the present economic turnaround is sustained."

Imbert added, "We must all adjust."

Imbert called on the country to get out of our financial crisis by moving forward, adding that in order to do so, T&T must:
"Curb wasteful expenditure, deb and value for money...since we cannot continue to live on borrowed money"

4:48 pm   Mon 2 Oct 2017

Tourism

Increase max reimbursement for property upgrades from $750,000 to $1.5 million.

Government will subsidize loans for new tourist and existing tourism facilities by 5%, with repayment period extended from 7 years to 15 years, effective December 1, 2017.

4:45 pm   Mon 2 Oct 2017

Health

Private hospitals fee from $150 to $25,000, $50,000 or $100,000, depending on the number of beds.

Exceptions are in place for longterm care facilities and places for elderly patients or those with chronic diseases Depending on # of beds.

4:37 pm   Mon 2 Oct 2017

Corporation Tax

Government to increase base tax rate for companies from 25% to 30%, so as to share in the burden of adjustment. This to take effect from January 1, 2018.

Imbert says corporate banks also need to share in the burden of adjustment.

"We have a need to spread the burden of adjustment across all sectors," says Imbert. "Including wealthy corporations."

Thus, he announced a new tax bracket of 35% for commerical banks, effective January 1st, 2018.

Proposing a "flat tax" of $120,000 annually on roulette machines in bars. Gaming tax increases from $3000 to $6000, paid under liquor license.

$60,000 per annum for every roulette table, $24,000 for every slot machine per annum. Effective January 1, 2018.

This has become necessary, Imbert explains, because present flat tax rate of 10% on gaming industry can no longer be tolerated.

4:35 pm   Mon 2 Oct 2017

Energy

"We consider it untenable that our hydrocarbon resources are being extracted" by foreign multinationals without taxes being paid, due to current arrangements

Therefore a 12.5% royalty rate will be applicable "across the board", effective December 1, 2017.

The Petroleum Pricing Committee will fix the fair market values of oil and gas for the computation of royalties.

4:27 pm   Mon 2 Oct 2017

Fuel Subsidy

Government to adjust fuel subsidy.

Energy Ministry will have to publish on a monthly basis the prices of fuel.

With immediate effect, the retail price of Super gas has increased from $3.58 to $3.97 per litre. Diesel up from $2.30 to $3.41.

This is a major increase for Diesel, which usually sees an increase of several cents.

4:20 pm   Mon 2 Oct 2017

Motor Vehicles

We have provided a range of incentives for use of clean alternative fuel vehicles.

Whereas incentives have worked, some individuals have taken advantage of it, e.g. BMW X5, brought into country as clean fuel vehicle when that was not intention

Costs T&T US$500 million "leaked out of this county for the purchase of motor vehicles in 2017"

Government to remove ALL incentives for passenger vehicles with engines larger than 1599 CCs on hybrid and CNG vehicles.

Currently, people are committing "tax evasion" by labelling new tyres as used, and so are not taxed. Imbert proposes flat 30% tyre tax, to be implemented starting October 20, 2017.

An exception is to be made for fractures for buses and lorries, which will be taxed at 15% per tyre.

Government announced the removal of customs and excise duties for motor vehicles of 300 CCs, from October 2017, to promote as a cheaper mode of transportation.

4:17 pm   Mon 2 Oct 2017

Allocations

 

4:12 pm   Mon 2 Oct 2017

Tobago connectivity to Trinidad

"Our ultimate objective is to provide safe, reliable transportation"

 


Tobago to get $2.1936 billion or 4.34 % of national budget

THA got approval internationally

THA in talks with Government to assist it in debt servicing of loan, if gets one

$1.909 billion allocated to facilitate work in Tobago

4:07 pm   Mon 2 Oct 2017

Heritage and Stabilisation Fund

"It is paradoxical and counter-intuitive that, over the last 9 years," Imbert says, we borrowed to save money in HSF.


"Appropriate amendments to the HSF Act will be laid in Parliament in early 2018" to allow Government to withdraw money from Stabilisation part. The Government will not touch money in Heritage part

3:59 pm   Mon 2 Oct 2017

CL Financial

The proceedings of the CL Financial bailout was well documented in media.

$23.1 billion of tax payers' money was put into a private company.

The only member of the group that has repayed the money lent by the Government is CLICO, to the sum of $8 million. That is, Imbert says, ONLY because it is under the management of Central Bank.

"After receiving $23.1 billion of taxpayers' funds, private CL Financial sold assets and kept the proceeds for itself"

After the $8 billion repaid by CLICO, net debt owed to the Government is now $15.6 billion.

3:55 pm   Mon 2 Oct 2017

Petrotrin

Petrotrin has $3.2 billion in tax arrears. Their debt burden now stands at close to $12 billion, which includes two large US dollar loans of US$850 million and US$750 million, due to mature in 2019 and 2022 respectively.

Petrotrin and the Minstry of Finance are now discussing possible refinancing options with both local and foreign financial institutions.

Imbert says, there is no doubt that Petrotrin still has great potential, including an excellent portfolio of land and marine acreage.

Petrotrin can no longer carry out its mandate in its present form, they require fundamental restructuring and transformative change.

The new fiscal year, plans to appoint an implementation team.

3:45 pm   Mon 2 Oct 2017

Taxes

Internal Revenue Division and Customs and Excise Division have been "dogged" by allegations of corruption.

TT Revenue Authority will bring all tax collection operations under one entity.

Government will engage labour, business to inform them about the TTRA, adding: "We propose to have the Revenue Authority personalised in 2018."

Procurement regulator to be appointed in 2018 and procurement legislation to be enforced in 2018.

Government will implement fully a property tax system in 2018.

3:39 pm   Mon 2 Oct 2017

National Security

"Addressing crime and criminality will continue to be the number one priority for this Government"

Current rate of crime has had a debilitating effect on local business.

National Security Ministry received average of $8.4 billion each year of last three years.

Government to launch the National Crime Prevention Program. Any plan must include a broad spectrum approach.

Government plans to upgrade the Immigration Detention Centre so that it meets international standards.

Imbert says, "We are optimistic that our efforts are beginning to bear fruit."

3:31 pm   Mon 2 Oct 2017

Hospital

"The operational cost of each of these new hospitals" is millions of dollars per year.

Example: Couva Children's Hospital costs $430 million a year

3:29 pm   Mon 2 Oct 2017

Water

Rehabilitating water reservoirs and laid new mains as part of plan to reduce wastage of water.

3:27 pm   Mon 2 Oct 2017

Private Housing

Government to establish a ministerial oversight committee for building approvals.

Prime Minister to chair committee to speed up approval process for housing.

3:22 pm   Mon 2 Oct 2017

Transportation

The rapid growth in income and living standard outpace the rate of expansion of transportation infrastructure. A tremendous growth in automobile imports, as well as huge subsidies in auto fuel contributed to widening gap.

In 2017, with a depressed economy, T&T citizens imported 35,000 new or used motor cars. Imbert stressed this number in disbelief.

Limited road network and deficiencies in public transportation system have become main causes of traffic congestion.

Government will be implementing initiatives to ease traffic congestion. One initiative is the planned removal of ALL traffic lights from Port of Spain to Arima. This program has already started  with contracts already awarded, and is expected to be completed by 2019.

Another initiative is the widening of several main arteries, including the Churchill Roosevelt Highway, Beetham Highway and from the Uriah Butler Highway to Port of Spain.

Government passed legislation to enforce breaches of road regulations and introduce a demerit points system as part of traffic regulation system.

There are plans to reform and modernize motor vehicle registration system.

Also plans to modernize public transport system, and PTSC to purchase 35 new buses in 2018.

Government also plans to remove the current restrictions on allocation of maxi taxi licenses. "Remove it altogether," says Imbert.

 

Persons will now be able to buy and band their maxi taxis and drive wherever they please without restriction.

3:18 pm   Mon 2 Oct 2017

Housing

The HDC, says Imbert, can construct “at most, 2,000 new houses a year.” This means that HDC can never fully meet the demand.

The cost to Government has increased as HDC has drifted away from low income houses. “This cannot continue,” says Imbert.

Government intends to return HDC to original mandate of housing for lower-income families, while starting an incentive to private sector to construct housing units for higher-income earners on HDC list.

There are 30,000 to 40,000 qualified homeowners on the HDC list.

Government will:

(a) pay developers $100,000 cash incentive per unit, depending on the degree of difficulty

or (b) provide developers with suitable land at no cost in lieu of the cash payment per unit.

It is expected that private developers will expedite construction process to take advantage of incentives, allowing for completion of approved units in nine months or less.

PM will initially oversee committee for the new Housing Construction Incentive Program Cabinet          

Fiscal incentives to stimulate affordable housing by the private sector is a tried and tested feature of modern governments, Imbert said.          

3:12 pm   Mon 2 Oct 2017

Padarath kicked out

The Speaker of the House just kicked Princes Town MP Barry Padarath out of the room.

Speaker: "Member for Princes Town, please take a walk. We don't allow shouting."

Padarath wasn't shouting, however was talking very loud. Imbert had said "all of them making noise." That's when Speaker told Padarath to leave and chastised 2 others on Opposition benches.

3:10 pm   Mon 2 Oct 2017

Creative Sector

Government wants to create a "live music district" to promote the Creative Industry.

"The return of TTT," says Imbert, will provide a platform for locally produced videos and films, etc.

A tailoring certification program to be introduced at the John Donaldson Technical Institute arm of UTT, as part of the Creative Sector's plans.

3:08 pm   Mon 2 Oct 2017

Yachting

Imbert calls the yachting industry "another potential growth area".

He made mention of recent disasters Hurricane Irma and Maria, breaking from Budget to thank "all those TT citizens who have reached out to assist our Caribbean neighbours, Dominica and Antigua", thanking them for their "spontaneous" desire to help.

He mentioned that while he was not happy about what happened (re: hurricanes), more yacht owners likely to choose Trinidad to store their vessels since we are outside hurricane belt.

3:05 pm   Mon 2 Oct 2017

Business Outsourcing Industry

Business Outsourcing Industry in the region has reached US$3-5 billion.

T&T already has a nascent sector which employs more than 1,000 locals and which earns "modest amount of foreign exchange."

One large energy company (went unnamed) has made the decision to relocate it's North American petroleum accounting and reporting functions from Houston to Port of Spain.

2:58 pm   Mon 2 Oct 2017

Agriculture

The food bill in 2016 was US$8.19 billion. That's TT$56.9 billion. To reduce this, the Government is targeting a doubling of agricultural output.

Imbert: "We're adopting modernised production systems throughout sector."

"We're supporting local businesses wishing to enter export market," with value-added food products.

While Government plans to rehabilitate agricultural access roads, etc, "it's obvious that we need new incentives for farmers." Imbert explains, we "need many more full-time, dedicated, farmers and to encourage farmers to upgrade their skills."

Therefore, Government is offering grants of up to $100,000. "Appropriate training or certification on farming" required to access new grants to be used to buy "essential inputs into farming" other than vehicles.

They are starting this program with TT$20M.

2:52 pm   Mon 2 Oct 2017

Tourism

Independent analysts are full of praise for the potential of T&T's tourism industry, but lament that the sector has grossly underperformed.

The government, says Imbert, is taking bold steps to rectify the sector's shortcoming. This included absolving TDC and creating two separate companies, one per island.

Imbert: "We have already started to forge closer links with cruise lines", in attempts to get more cruise ships to stop in both Trinidad and Tobago.

With regards to construction of Sandals resort in Tobago, Imbert says "discussions have been progressing satisfactorily."      

2:50 pm   Mon 2 Oct 2017

Business Development

Maximum TT $100,000 grant to small businesses. This was previously said in last year's budget.

 

A provision of $50M has been made in the 2018 Budget for the new business development program, which will assist at least 500 small businesses in T&T to grow and develop. This allocation will be supplemented if necessary.

2:48 pm   Mon 2 Oct 2017

Forex

ExIm Bank will be licensed as a dealer foreign exchange to local manufacturers. 30% of their production must be for export to qualify

Starting with US $100 million and will be available in 2018.

Qualified manufacturers must give back a portion of earned foreign exchange.

They must agree to repatriate some of their earnings, not keep it all abroad, Imbert said.

2:42 pm   Mon 2 Oct 2017

Exports

One of the main driver's of TT economy must be exports, but shortage of foreign exchange to buy some inputs and raw materials limits them.

2:40 pm   Mon 2 Oct 2017

Consistent with the need to cut out waste and duplication, the Government has engaged the World Bank to identify ways to produce 'significant savings' without significant stress on the population.

Imbert: We certainly need to change the paradigm if we are to be successful at long-term economic diversification.

"If business or labour pursue sectional interests, governments too, diversification will not be successful."

Imbert said, "we are well-advanced towards unveiling an automatic service for construction permits." He repeated the statement to ensure everyone in the room heard, while Government MPs thumped their desks.

2:38 pm   Mon 2 Oct 2017

GATE

Successive governments have spent $6.5 billion on GATE. But at the current revenue levels, this is "not sustainable and must be subjected to regular review."

 

Imbert added, "Right now, there are people earning $100,000 who benefit from GATE."

2:29 pm   Mon 2 Oct 2017

New revenue streams

Imbert says, "we in this government recognize the urgent need to identify new revenue streams."

Adding, "we must ensure everyone pays their fair share, (including) self-employed professionals."

Government will also review tax incentives to ensure that no company is unfairly benefiting.

By December 2017, intends to establish TT Revenue Authority

2:21 pm   Mon 2 Oct 2017

Gas master plan

Several projects to improve gas supply are underway.

Main elements of new plan:

  • Ensuring that new exploration efforts are undertaken to the maximum extent possible
  • Ensuring that all suppliers develop and supply their gas resources to the market in an optimal manner
  • Maximising the government take form the gas sector subject to ensuring that all producers along the value chain are sufficiently incentivized to perform optimally for the country
  • Ensuring that sufficient gas supplies are available to strategic downstream sectors
  • Assuring that if gas supply curtailment is required, it is applied in a transparent, consistent and fair basis.

The work has already been done, says Imbert.

To substitute gas declines, Government "working assiduously" with Venezuelan authorities to complete gas sharing agreement by 2019-2020 for Dragonfield.

2:21 pm   Mon 2 Oct 2017

Gas production

The BPTT's Angelin project is expected to produce up to 600-million standard cubic feet of gas

To substitute gas declines, Government "working assiduously" with Venezuelan authorities to complete gas sharing agreement by 2019-2020 for Dragonfield.

2:19 pm   Mon 2 Oct 2017

Recovery?

Imbert does not expect a large fiscal deficit. He added that our economy is "on cusp of moderate recovery."

2:17 pm   Mon 2 Oct 2017

2:15 pm   Mon 2 Oct 2017

2017 Expenditure Recap

2:12 pm   Mon 2 Oct 2017

Revenue Shortfalls

2:09 pm   Mon 2 Oct 2017

Oil and Gas

2:07 pm   Mon 2 Oct 2017

'Comforting Figures'

Unemployment rate at the end of 2016 was only 3.6%

These are, according to Imbert, "comforting figures."

2:04 pm   Mon 2 Oct 2017

Safe Public Sector

Imbert says the NAR government cut the size of our public sector, BUT this administration will not do the same.

Government knows that times are hard for us in T&T, but Imbert says: "the population has pulled through difficult times before, we can do it again."

He quoted Calypsonian Black Stalin, saying "We can make it if we try."

1:57 pm   Mon 2 Oct 2017

Changing the Paradigm

Imbert announces the theme for this year's Budget, one that he calls "unusual": Changing the Paradigm

1:54 pm   Mon 2 Oct 2017

Status of State agencies

Central Bank has injected US $7.5 billion in the last 4 years.

Petrotrin does not pay its royalties and taxes (on time). This year, Petrotrin paid $200 million, with a shortfall of $400 million. Imbert says, "this cannot and will not be allowed to continue."

WASA gets over $2 billion a year in subsidy. Yet, Imbert says, "WASA is financially challenged and struggles to pay its bills on a daily basis."

These three State agencies (TTEC, Petrotrin and WASA) cost the Government $3 billion.

1:45 pm   Mon 2 Oct 2017

Catastrophic loss of revenue

Simple building projects, such as police stations and protestations, moved from, examples $4M to $40M, while the average cost of HDC house moved from $300,000 to over $1M during 2010 to 2015 period.

Despite the Government reducing their expenditure by 20%, the gap between revenue and expenditure is still large. Expenditure is at $55-60 billion per year, with a revenue of $32 billion.

Over the last three years, revenues from energy sector dropped from $27 billion in 2014, to $9 billion in 2017. Loss of almost $20 billion from that sector alone.

1:45 pm   Mon 2 Oct 2017

Economy recap

Before getting into this year's Budget Presentation, Colm Imbert recaps our current economy, sharing notable figures.

 

1:33 pm   Mon 2 Oct 2017

Budget begins

As the 2017-2018 Budget Presentation begins, Finance Minister Colm Imbert lays budget documents in Parliament.

"Implementation has not been easy," Imbert says, with regards to previous budgets. "We are now at a cross roads."

1:18 pm   Mon 2 Oct 2017

Padarath says Budget will attack middle class

Princes Town MP Barry Padarath said he wants to see job creation in today's Budget Presentation.

He added that he foresees that the middle class will be the 'main casualties' from today's Budget, saying:

I believe today will be a continued attack on the middle class of the country. I believe that there must be policies that are geared towards cushioning the blow towards the middle class.

1:10 pm   Mon 2 Oct 2017

NATUC protests outside Parliament

NATUC members silently march outside of Parliament. NATUC Vice President Watson Duke, when asked why the organisation is protesting, responded:

We are here to send a message to the reader of the budget, Mr. Colm Imbert, so that he can understand that the workers are feeling pain, feeling hardship.

Protesters also held signs declaring "NO TTRA", to which Duke explained, "We don't want the Revenue Authority, the workers do not want the Revenue Authority."

"What the workers want," added Duke. "We want better legislations."

1:00 pm   Mon 2 Oct 2017

Newsday arrives at Parliament

Our team has arrived at Parliament in anticipation of the 2017-2018 Budget Presentation.

Follow along with all things Budget on social media with the hashtag #TTBudget2018 

10:30 am   Mon 2 Oct 2017

It's Budget day!