Imbert: No HSF withdrawal means 'all of us would die'

FINANCE Minister Colm Imbert said the Heritage and Stabilisation Fund (HSF) increased by US $200 million in two days due to the rallying of the stock market and should currently be close to US $6 billion.

He was piloting The Miscellaneous Provisions (Heritage and Stabilisation Fund, Government Savings Bonds and Value Added Tax) Bill in the Senate on Thursday. The bill seeks to allow for an early withdrawal from the fund to a maximum of $1.5 billion if a disaster area is declared, a dangerous infectious disease is declared, or there is or likely to be a precipitous decline in budgeted revenue based on the budgeted price of crude oil or natural gas.

Imbert said the best estimate of revenue loss was between six and seven billion over the next six months "as a result of this calamity that has befallen the world and TT." He noted that when the $2.5 billion, that is needed to put in to allow businesses to have some cash to keep employees in jobs as long as possible, the figure would increase to $8.5 billion to $9 billion.

"So we really looking at a huge problem."

Imbert said thankfully the country has savings and the HSF is designed specifically for this situation.

"And there is a lot of old talk out in the system from people who just don't know any better or perhaps they know and just making mischief, as to what the Heritage Fund was designed for."

He said that if government used the current formula of waiting until the end of the fiscal year in October "now we dead."

"All of us in this country would die."

He added: "If we don't do this we will be committing suicide – economic and literal suicide."

Imbert said Government was trying to have a range of options available and "we will look at the best, fastest, most cost-effective option that gives the best value for money and utilise whichever one falls within the criteria that this disaster demands, because this disaster demands immediate, fast, quick, very prompt action."

He reiterated that the HSF was not the only source of funding to address the covid19 crisis, and from the international, multilateral financial institutions TT had a basket of funds available in excess of US $300 million (over TT $2 billion) and there was also funding available on the local market.

He reported the HSF lost value with the collapse of the stock market over the last month and about a week ago went down to US $5.6 billion from US $6 billion.

"But I am very happy to say that between (Tuesday and Wednesday) the stock markets in the US rallied as a result of the stimulus package that the US administration has decided to pump into the US economy, US $2 trillion, and on Tuesday, had the best performing day for almost 20 years."

He said the stock market jumped almost ten per cent Tuesday and the HSF made US $150 million and then Wednesday made another $50 million. He reported it was up 5.63 per cent Thursday there would be at least another US $100 million in value for the fund.

The bill was passed unanimously and a motion seeking authorisation to borrow a further TT $10 billion was also carried.