Today is budget day and all sectors of society are waiting, some with apprehension, to see what action plan Finance Minister Colm Imbert will lay out to stimulate the economy at a time when revenues are down.
Only last week, Prime Minister Dr Keith Rowley signaled times will get tougher as revenue from the energy sector had plummeted by 90 per cent in the 2017 fiscal year.
Among the challenges will be how to reduce the staggering $10.6 billion public sector wage bill which covers a workforce of 89,000.
For now, mass retrenchment is not in the cards, in keeping with Rowley’s recent assurances his administration would avoid job loss as far as possible.
However, Government is expected to take a measured approach to reducing the wage bill by continuing to cut back on contract employment across all ministries.
There will no more renewals, or there will be early termination where a contract is a few months away from its expiration.
Also proposed is the removal of subsidies on water, electricity and gasoline. It is anticipated there will be limits on foreign exchange for imported foods, and more incentives for farmers to become self-sufficient in food production.
The Revenue Authority which was to be established over the past year, as detailed in the 2017 budget, will be implemented in 2018.
These proposals are according to a government source, who preferred anonymity, and who described the 2017 to 2018 current and capital expenditures as an “austerity budget.”
Imbert will present the fiscal package at 1.30 pm in the House of Representatives.
Government ministers would make no comment about what their requests were, or, what they expect except to say they will work with what they get.
Meanwhile, the business sector represented by Downtown Owners Merchants Association president Gregory Aboud and Michael Annisette of the labour movement are awaiting the unveiling of the measures to be taken after which they will have their say.
Since labour had no proper consultation with Government on the budget, Annisette said, “Like everyone else, we will wait and see then pronounce on the budget after the facts. It is unfortunate and regrettable that a budget is still done as the colonial past and does not mirror a modern society.”
National Security Minister Edmund Dillon, whose ministry has been getting the biggest slice of the budget in recent years due to the high crime rate and safety concerns, told Newsday, “Definitely, I am sure Government will provide what is necessary for the security of the country. Not all that we ask for, we are going to receive because we are in dire economic times.”
Education Minister Anthony Garcia whose ministry received the second largest sum in last year’s budget said he made several requests but does not know if all will be met. While allocations are made at the discretion of the Minister of Finance, he said, the important thing is that whatever is given will be used to provide much needed amenities in the education system.
“Where education is concerned, the mandate of our Government is to provide quality education and access at all levels from nursery to tertiary. We want to ensure there is inclusion no one is left behind.
Yesterday, the guess was on as to the size of the budget. Former People’s Partnership government minister Vasant Bharath told Newsday the budget will continue to see a deficit in the sum of about $15 billion with its size being anywhere between $52 billion to $55 billion. Another person speculated it will be between and $45 billion to $50 billion.
While he is not blaming Imbert for whatever the budget brings, Bharath said Imbert is not the right person to do the job.
“These are not normal times and the country does not need a book-keeper to only balance the books,” he said.
Government needs someone with the skill sets to stimulate the economy and one who is experienced in finance and economics, he said.
Government’s 2016 to 2017 policy document Shaping a brighter future - A Blueprint for Transformation and Growth, he said, “produced absolutely no real growth but instead saw negative growth which Prime Minister Dr Keith Rowley said was in the region of 2.2 per cent. My estimation is that it is closer to six per cent.”
No economic growth, he said, has taken place over the last two budgets as there has been no new economic activity and no investments by either local and foreign investors.
“I suspect this budget will be more of the same old. We cannot run an economy on borrowing funds. It is not sustainable.”
Government has already withdrawn from the Heritage and Stabilisation Fund $4 billion and has borrowed $14 billion on the international and local markets.
Bharath forewarned there will be social displacement if Government was to further tax the population.