IMBERT'S GIVE AND TAKE BUDGET

PAY your portion, Finance Minister Colm Imbert intimated to the people during his 2023 budget delivered on Monday in the House of Representatives.

In what could be described as a "give and take" budget, the giving side of Imbert saw help for the vulnerable in society, help for young people and help for SMEs (small and medium enterprises) recovering from the pandemic. Tobago got $3 billion in benefits, direct ($2.521 billion) and indirect. There was a $210 million gratuity for health workers.

He said Trinidad and Tobago is in a state of fiscal deficit and debt servicing, with no great surplus in revenue.

The taking side of the minister saw drivers face an immediate increase in the price of fuel at the pump – the sixth in the past seven years (and second this year) – the elderly no longer travel for free on the inter-island ferry and higher fares to travel to and from Tobago on the airbridge.

Labour leaders and the country's public servants were told flatly there would be no increase in the four per cent salary increase offer. The country, Imbert said, simply cannot afford any higher offer.

With the increase in the price of fuel, everyone rich or poor, can expect a consequent rise in the cost of items and services which depend on transport – including food. Those approaching retirement soon are likely to have to work until 65.

Deficit narrows

Imbert expected earnings of $56.175 billion and spending of $57.685 billion. On a predicated global oil price of US$90.50 and gas price of US$6.00 MMBtu, he anticipated $25 billion in energy revenues, $30 billion in non-energy and $1 billion in capital revenue.

He said TT's finances were improving – with US$4 billion balance of payments, US$6.8 billion in reserves and debt-to-GDP at 70 per cent .

Imbert announced $210 million for gratuities to 20,000 "exemplary and heroic" healthcare workers for their pandemic service. He said people earning $7,500 or less per month would pay no income tax.

Youngsters at tertiary level who have already accessed GATE for diplomas, associate degrees or N1 exams may now do full degree/tech-voc training, with $50 million extra going towards GATE.

To remedy TT's pandemic fallout on learning, he announced a new pre-CSEC lower secondary school proficiency exam.

He promised a 150 per cent tax break to any company taking on youngsters as apprentices, and mooted a national service programme and six youth development centres.

"To incentivise further and create a more agile and robust manufacturing sector, I propose to introduce a one-time manufacturing tax credit for companies which make an investment in new machinery, production lines and equipment." This would be a tax credit of up to $50,000, costing the government about $50 million.

"I am waiving VAT on new equipment for manufacturing companies utilising alternative energy technologies/renewable energy options." He named biomass, wind, solar and water energy.

Oil and gas help

For oil/gas firms he increased the investment tax credit from 25 to 30 per cent, and cut supplemental petroleum tax (SPT) for operators in shallow waters.

"We believe that these reduced rates of SPT for new oil production in the marine areas will allow companies to access the required financing to increase their drilling and get approval for new exploration and production programmes, thus increasing the production of much-needed oil."

He offered $50 million in tax breaks for deep-water exploration, cutting the Petroleum Profits Tax from 35 to 30 per cent.

He offered another tax amnesty to businesses on penalties/interest on taxes owed up December 31, 2021, hoping to earn $300-500 million.

Imbert envisioned, "We are anticipating increasing levels of revenue from the implementation of the property and gaming taxes and the new revenue authority.

"At the same time, we are screening and rationalising public expenditure while reshaping the structure of government expenditure to target social, educational, and health-care programmes."

Imbert hinted at pushing the retirement age from 60 to 65, pointing out that in Barbados the retirement age is 67, and 65 in Jamaica.

Sticking to the CPO's four per cent wage offer for 2014-2019, he said even that would be difficult for the Government to afford in terms of back pay plus annual extra expenditure, while saying the PSA's counter-offer of a 19 per cent increase was totally unrealistic, as this would lead to $30 billion in back pay and $3.3 billion extra in recurrent expenses annually.

Increase in fees and fares

Imbert provoked some groans from opposition MPs by announcing pensioners would no longer enjoy free ferry travel but have to pay $25 for a one-way trip to Tobago.

The standard one-way ticket increases from $50 to $75, and premium from $100 to $150. A one-way airline ticket to Tobago moves from $150 to $200.

Lamenting the Government's $1.9 billion annual fuel subsidy, he proposed to add $1 to three types of fuel, and 50 cents to diesel per litre. The new prices will be premium gasoline $7.75, super gasoline $6.97, diesel $4.41 and kerosene $4.50.

Imbert said a US$95 oil price will need a government subsidy of $1.45 billion, and a US$90 oil price a $1.2 billion subsidy.

He said a 20lb cylinder of cooking gas will still cost $21, at an annual government subsidy of $300 million.

Imbert announced his intention to restrict ownership of assault rifles, which meanwhile will attract a $5,000 licence fee, even as he promised to double to the standard firearm user licence fee,

The main allocations were:
Education and training $7.453 billion

Health $6.892 billion

National Security $5.798 billion

Social grants $5.453 billion

Works and Transport $3.748 billion

Public Utilities $2.823 billion

Rural Development and Local Government $1.887 billion

Agriculture $1.330 billion

Housing $0.974 billion

PSIP $6.2 billion.