Budgeting for the common good

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The imminent budget hangs over us like a guillotine waiting to fall. It consumes our waking and sleeping moments. We know it will give tangible form to the widespread vision of a benighted nation, partly the result of our wantonness but also the fallout from the undying novel coronavirus pandemic.

The Minister of Finance has his own way of dealing with stress – like a man, which means you do not admit to it, at least not in public. He has so many conflicting ideas and strategies being thrown at him that in the end he will have to do what he considers right, without any party or self interest. For my part, I would advocate a revolution in the way we think. We need to bite the bullet. Ask the French. They know that you have to demolish to build, and there are always casualties but we must have the courage. The challenges are so huge that traditional ways of dealing with setbacks cannot be the correct answer. Fiddling around the edges won’t get us to where we need to get to. We need big actions to solve big problems.

The point though is that revolutions are usually bloody and, “we cannot afford to have any more blood on the streets, especially at this precise moment”, is what I hear some people say. Some of us have been fortunately isolated from the despair others feel after losing their jobs, without the means to make ends meet and facing real short and mid-term hardship. That must concern us all, but the long term plan must command our focus too. An eye in the basket and the other down the road should be our approach.

Fixing the structural faults must be at the top of the political agenda. And, there is one very basic flaw; namely, the nanny state we have created. A key role of government is to provide the infrastructure that allows industry, entrepreneurs and wealth creators to do business that contributes a healthy share of taxes, not to be in business itself.

The TT government owns and operates too much of everything and like a village chief is the bequeather of everything. The state should not own hotels, for example, and all the burden of public utilities should not fall entirely on its lap. The state should not be subsiding food, water, electricity, gas, petrol, transport, lifestyle, land ownership and much more. That is all noble but our wealth base is very narrow and we are over vulnerable to industry and other shocks, since we operate in an environment we cannot control. No one can honestly contest the fact that we have messed up.

Since the 1960s TT has offered free and compulsory education to every child up to secondary level, and for many decades has offered free university education, endless scholarships and broad tertiary education, yet what is the return on all this investment in people? What have we done with the opportunities all that generosity has afforded us? Maybe that is not the right question because it is clear that the state did not do enough to create a healthy post-colonial economic and social space where those educated people could turn that huge investment into wealth in its broadest sense. Instead we have created a needy population with a sense of entitlement, with dulled senses and suffering from inertia, hooked on the largesse of the state. A mummy-will-always-provide syndrome.

Our governments since independence have given with one hand and taken with the next. They have failed to overhaul the civil service, failed to introduce a proper taxation regime when people had money to pay it and could have become accustomed to it, and failed to create institutions to deal with the changing economic situation we repeatedly find ourselves in. They did not do enough to overhaul the systems that must underpin the smooth and efficient running of a modern economy. They created the forex crisis by failing to stimulate and sustain local enterprise adequately. The very education system has been undermined, so that we are now turning out 40-60 per cent of students each year who are functionally illiterate and it is already corroding the entire system of higher education. That is the abyss that we are staring into, yet we are allowed to behave like rich kids.

In general, people don’t want to pay taxes, even the meagre ones we do have. They don’t want any subsidies lifted, even gradually; no increase in the retirement rate, yet they want higher pensions. The government should tell the truth about the paltry state pension scheme. The NIB payments are too low to sustain the national pension scheme and the population is ageing.

There is never a right time for revolution so we need a carrot and stick approach. Balancing out people’s real needs vs their wants is the monumental challenge. We have to hope and pray that our finance minister is guided by sound principles and that he has a long term vision for where we are headed.

Marina Salandy-Brown

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"Budgeting for the common good"

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