Finance Ministry: Almost-balanced budget for 2022
MINISTER in the Ministry of Finance Brian Manning welcomed the news on Thursday that TT received higher revenue for the last fiscal year than was originally estimated.
But former minister in the ministry of finance Vasant Bharath did not believe this news painted a true picture of TT's economic reality.
The National Transformation Alliance, led by former national security minister and former police commissioner Gary Griffith, welcomed the improved revenue, but said Government could not take credit for it.
The Opposition UNC believed the improved revenue announced by the Finance Ministry shows more evidence of a disconnect between Government and reality.
In a statement on Thursday, the ministry said when Finance Minister Colm Imbert presented the 2022/2023 budget in Parliament on September 26, the revenue figures for fiscal 2022 were based on actual figures from October 1, 2021-August 31, 2022 and estimated figures for September 2022.
"However, the Board of Inland Revenue has since finalised the actual revenue figures for fiscal 2022 and it has been determined that the total revenue in fiscal 2022 was $54.21 billion, which is $2.57 billion more than the revised estimate announced in September 2022, and $10.88 billion more than the original revenue estimate of $43.33 billion for fiscal 2022, made in October 2021."
The ministry said, "With total expenditure for fiscal 2022 now estimated at $54.54 billion, the fiscal deficit for 2022 is now estimated at $329 million, which is less than 0.2 per cent of GDP (Gross Domestic Product), well below the international benchmark for fiscal deficits of three per cent of GDP."
The ministry added, "In essence, we have achieved an almost balanced national budget in Fiscal 2022, something that has not occurred in TT since 2008, 14 years ago."
Manning said TT's receiving better revenue than estimated for fiscal 2022 is good. But this was no reason to throw caution to the wind or make changes to measures outlined in the budget in September.
He said, " We are still cautiously optimistic and believe that the measures implemented are the most prudent at this time."
But Bharath countered, "For the Ministry of Finance to take any credit whatsoever for this temporary increase in revenues is a blatant attempt to hoodwink the population into a false sense of security when our reality is the complete opposite."
He argued the increased revenue for fiscal 2022 had nothing to do with fiscal policies implemented by the Government over the last seven years. The higher revenue was connected to circumstances outside of TT's control such as the geopolitical tensions between Russia and Ukraine.
Bharath said, "The TT economy has suffered negative growth for six consecutive years, with real GDP falling by 15.7 per cent, during which time our Caricom neighbours have grown by 3.2 per cent and the rest of the world by 21.4 per cent."
He said the recently published retail price index indicates the cost of living has increased by 18 per cent since 2015, without a commensurate increase in wages.
"There is sustained economic and institutional decline across the country, governance is at its weakest and reforms are not happening."
Bharath said measures such as increased taxation via reductions in the fuel subsidy, proposed property tax, and withdrawals from the Heritage and Stabilisation Fund have failed to instil confidence or improve "growth prospects in a flat and failing economy."
In a statement, the NTA said it was pleased with the increased revenue mentioned by the Finance Ministry.
But the party cautioned, "We must remain vigilant of the meaningful fiscal and structural reforms necessary to put us on a path to meaningful social and economic recovery."
The NTA agreed with Bharath that TT's improved revenue was due to global circumstances which contributed to higher energy prices and TT benefited as a result of this.
"The Government of TT was very fortunate for this windfall and should be seeking to build on it, not claiming credit for it."
The NTA said Government should not be playing with statistics and semantics.
The party argued that even if the budget for fiscal 2022 is balanced, the deficit from fiscal 2016-2022 still needs to be reduced.
Against this background, the NTA said, "We still have a long way to go before we can have an actual balanced budget."
UNC chairman Davendranath Tancoo claimed Imbert is living in an alternate universe if Government is speaking about increased revenue and balancing the budget.
"Citizens are experiencing the worst standard of living that they have ever had in our country's history."
Tancoo said public protests against crime, poor infrastructure and high food prices are examples of this.
"It is clear that for Minister Imbert and his government, the PNM now stands for the 'people never mattered.'"
"Finance Ministry: Almost-balanced budget for 2022"