A ‘stay-as-you-were’ Budget, generally

THE EDITOR: This is the time when “Budget soothsayers” are usually in competition with one another in order to determine whose predictions had met, most closely, the “prescriptions” being proffered by the Minister of Finance.

However, judging from reports in the media, it seems clear that, apart from a few, there has not been the usual “flurry.”

Indeed, it leads one to speculate whether this may have led the Government itself to take the unusual step to mount its own forum at which participants were given a “free sheet” to voice their views on the state of the country’s economy and to propose measures for its continued health and growth.

Some months after his presentation of the 2015/2016 Budget, I commended the Minister of Finance for the manner in which the economy had been dealt with for the first year in office of the PNM Government.

Indeed, behind this commendation was the fact that, in my view, the philosophy underlying that Budget had been such as to encourage self-resilience among citizens such that recourse had not been had to the customary policy perspectives which normally visited countries which find themselves in a situation of sudden falling national income.

I am, of course, referring to borrowing from such institutions as the IMF, the “conditionalities” of which are relatively harsh and oppressive. In this regard, I repeat my commendation to the minister in respect of the 2016/2017 Budget. It is my view that, generally, the 2017/2018 Budget will be a “stay-as-you-were” one. Indeed, I see very little room for the minister to operate on the “expenditure side” with any new initiatives being on the “revenue side” as he seeks to avoid a continuing widening in the revenue/expenditure deficit. My recommendations (and expectations) would therefore be as follows:

1. There will be no tinkering with the exchange rate as the TT dollar will continue to be allowed to float competitively in the foreign exchange market.

2. Income tax rates (personal and corporate) will be adjusted not only to close the increasing gap between the rich and the poor, but also as a means of spreading the burden of adjustment more equitably. The new rates will be expected to yield a net increase in the “revenue take” for the Treasury.

3. The policy of reducing (and eventually eliminating) the fuel subsidy will be continued.

4. Given the decision not to implement the property tax (said for administrative reasons mainly), land and building taxes will return and will be increased to a more “meaningful” level.

5. There would be some measures which will be intended to encourage diversification of the economy by recognising that the major thrust, in this regard, will have to come from the private sector.

6. On the expenditure side, there would be a commitment to continue work on such major projects as the highway to Point Fortin as well as commencing work on the proposed Toco and Manzanilla highways.

7. In terms of recurrent expenditure, I see a greater allocation in the area of the administration of justice. In this regard, I see greater allocations for the Judiciary and the Office of the Director of Public Prosecutions in particular.

8. Finally, and as a general recommendation, it is my wish that the Prime Minister announces that greater latitude will henceforth be given to individual ministers as a medium for their greater administrative development.

ERROL OC CUPID, Trincity