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Saturday 19 October 2019
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Economists: Feel-good budget…but

FREE UP: Finance Minister Colm Imbert reacts at the end of his three-hour-long budget presentation in the House of Representatives yesterday.  PHOTO BY SUREASH CHOLAI
FREE UP: Finance Minister Colm Imbert reacts at the end of his three-hour-long budget presentation in the House of Representatives yesterday. PHOTO BY SUREASH CHOLAI

ECONOMISTS said Finance Minister Colm Imbert's $53 billion fiscal plan for 2019-2020 was a "feel-good budget", but questioned whether there could be some repercussions in the implementation of some of the deliveries.

Former finance minister Mariano Browne said Imbert's budget was a statement of achievements and what Government did over the last year. Indera Sagewan-Alli said the minister deserved a commendation on his budget presentation.

Joining a panel discussion aired 'live' on i95.5 FM hours after Imbert's budget presentation on Monday, was attorney Devanand Maharaj who questioned whether the minister's promises of increasing the minimum wage and wages of CEPEP and URP workers, will set a trigger for increase in wage expectations throughout the country, and if it could push inflation higher.

Sagewan-Alli said: "I certainly think the minister delivered, by and large, maybe with the exception of the business community. I think they were expecting cash in hand to deal with issues, not a bond that they now have to trade or borrow on.

"He was successful over the last four years to bring us an expenditure size of $62.8 billion which is now averaging a little over $50 billion. As a population we have grown quite accustomed to that kind of living. He was able to make some hard decisions and stay with that over the four years. We can't rule out the fact that we are going into local and general elections and the minister, in true form, sought to use this as a campaigning tool."

She said this budget launched the game for the current administration. She said looking at all the promised increases – pension for daily paid workers and lower housing costs – one can even ask the question, that with the fallout with the Chinese company to build 5,000 houses, whether he has gone to the other extreme.

On the contributory pension plan, Browne said the issue was who is going to manage and fund it, and how will people sign up.

"The devil is in the details, and I am talking about the pensions that are going to be included in the tax legislation. It is a wonderful gesture to state, but it is the actual niceties of it from a tax perspective coming into position through the Finance Bill."

Sagewan-Alli said the budget was promised on the premise of the price of oil and gas. while Browne said revenue was going to be a problem in the future.

Browne questioned how was the oil and gas sector going to expand?

"Production of oil has not increased. In terms of natural gas, he is talking about what is going to happen, it hasn't happened. That is dependent on new fields. We are doing things about the future and in the meantime there are these capital projects

"We need another port in Toco like we need a hole in the head. We have the Roxborough hospital, Point Fortin hospital, Sangre Grande hospital. We have a couple of billion-dollar projects on stream, but the real problem with these projects is that they bring recurrent expenditure. These are not revenue-generating projects. They have a few years of extra cost when we don't have extra revenue."

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