THA budget just to spend T’dad allocation

For yet another year, Tobago will have to depend on a budget allocation from Trinidad to service its needs since the island has no means of generating its own revenues. And the Tobago House of Assembly’s (THA) 2018/2019 budget is merely about how the Assembly will spend this allocation.

So argued economist Dr Vanus James in analysing last Monday’s presentation of the Tobago House of Assembly’s (THA) 2018/2018 budget proposals.

In his budget presentation, Finance Secretary Joel Jack announced a $4.744 billion request for the new fiscal year to the Ministry of Finance.

Listing THA revenues at $211 million, he said Recurrent Estimates was $3.2 billion (with Personnel Expenditure getting a substantial chunk at $901.2 million), and the Development Programmes Estimates was $1.38 billion.

In a telephone interview, James noted:

“For yet another year, Tobago will have to depend on a large tranche, $4.5 billion, to come in from Trinidad. That is about ten times the revenue generating capacity of the Tobago economy with no programmes to clarify how we would get out of that dependence.

“It is just more dependency in a period in which we are saying we want self-government… that is a point of contradiction.”

James said Jack’s budget statement, in using the national economy as its context, does not work for Tobago.

“He based the Tobago budget on the national view, the view by the Minister of Finance on what the national problem was… a balance of payment problem and a budget deficit problem. He (Jack) adopted that narrative as the overarching challenge that Tobago fits into and he also adopted the narrative that we are covering Trinidad and Tobago because of oil and gas prices and the expansion of oil and gas production.

“He didn’t have in the document any reference to how diversification of the national economy away from oil and gas addresses recovery,” he said.

James criticised the THA budget for failing to be guided by any clear understanding of the main activities through which Tobago contributes advantageously to national recovery. And he also suggested that with Tobago looking to self-determination, the budget should speak of the economic dimension of this process.

“Self-determination has a political side and an economic side. Tobago right now produces about 1.3 per cent of the national output and that leaves us in a situation where we depend heavily on Trinidad to receive revenue.

“Self-determination means growing out of that situation of dependence on Trinidad and in particular on oil and gas. You would look in the budget partly for perspectives on how Tobago could contribute to the diversification of the Tobago economy and how through that contribution, Tobago becomes more economically self-reliant.

“We didn’t get that in the budget document at all,” he said.

James described Jack’s budget statement as “effectively a budget to spend the money that you would get but not one that is clear about how it would contribute to solving both the Tobago dependency problem and the national diversification problem.”

He added:

“If you come to the budget with those two perspectives, one of the primary objectives you would have as a person designing a budget is saying how fast we would have to grow in order to get out of the dependency on Trinidad and the timeframe and that usually has something to do with the cost of money that the Government is borrowing in Trinidad in order to finance the budget.”