TT CHAMBER of Commerce president Reyaz Ahamad says the time has come for Government to sell state assets to the private sector, since, “it’s not government business to do business.” Ahamad made this call yesterday at the chamber’s annual post-budget analysis breakfast meeting at the Hyatt Regency.
He said government has traditionally been very involved in the economy, and perhaps for some time this was necessary to give the economy the needed boost and support.
“We believe, however, the time has come for government to proceed with divestitures. This can be in the form of liquidating more shares in companies such as First Citizens, or sell assets that would be better run by the private sector. There is liquidity in the system that the private sector can invest in these assets, this will assist in improving efficiency.”
Ahamad said this will have spin-off effects for the economy, namely an increase in government revenue collection from corporation tax which will generate revenue to reduce the fiscal deficit.
“Divestitures can help the government maintain their strategic focus and redeploy resources towards crime fighting and healthcare.” He said the government needs to reduce its involvement in managing certain aspects of the economy and let the private sector invest.
“In this regard, we are pleased to note that eTeck will be divesting the Preysal industrial estate among other undeveloped land spaces.”
The call for divestiture comes as Government has selected the OWTU and its company Patriotic as the preferred operator for the former Petrotrin refinery which was previously run by the State.
Ahamad also spoke on VAT refunds to businesses and reported that in some instances, it has been outstanding for more than 24 months. He said some individual companies are owed in excess of $20 million.
“These members therefore continue to have their cash tied up and are unable to satisfy many of their financial commitments.” During the budget presentation, Finance Minister Colm Imbert announced that $3 billion in interest-bearing bonds will be offered to VAT-registered businesses as part payment of outstanding VAT refund arrears.
Ahamad said the Chamber is happy with the initiative to alleviate the burden, and the assurance that Government will restore the VAT refund payments to its original system which includes paying the interest on all VAT arrears.
“Unfortunately, the proposed bond only addresses a portion of the outstanding refunds. We also seek further information on the inherent value of the bonds as we are concerned that while the bonds provide a tradeable instrument, it’s tradeable value is less than current market rates.
“This means that it will not alleviate the full amount of arrears that have been burdening our members.”
On crime, Ahamad said there have seen some positive elements since Police Commissioner Gary Griffith assumed the position, but there is still a perception that TT is not safe. This, he said, is mainly due to the high murder rate.
“Allocations to national security have been increased over time, however crime does not seem to be declining. The minister announced the purchase of several pieces of equipment to expand the operational plan to fight crime. We hope to see the results on these investments on the crime rate for murders and other serious crimes.”
On the increase of the minimum wage from $15 to $17.50 Ahamad said the chamber acknowledged the need to review wages for low-income earners to keep up with the cost of living.
“However businesses are already grappling with the high cost of doing business relative to other countries due to inefficiencies at the port and low labour productivity to name a few.” Attempts to contact Energy Minister Franklin Khan on the divestiture issue were unsuccessful.