FINANCE Minister Colm Imbert delivered an upbeat budget 2024 on Monday in the House of Representatives, on a theme of moving from recovery to growth, in which he made generous provision for the disadvantaged, gave tax breaks to companies to boost innovation, and sought to secure the society’s safety overall.
The minister proposed to earn $54 billion and spend $59 billion, for a $5 billion deficit. Imbert’s budget was predicated on oil at $85 per barrel (WTI) and natural gas at US$5MMBtu.
For the disadvantaged, he promised a $20.50 minimum wage, a means-tested $1,000 schoolbook grant, a $4,000 grant to some public service retirees, plus the provision of accommodation to the most vulnerable in society.
Imbert did not touch the existing $7,500 personal tax break nor address food prices, in the light of food-price inflation down to four per cent from 17 per cent late last year.
He gave tax breaks for aspects of oil/gas exploitation (small company, shallow-water exploration), exporters and companies investing in cybersecurity.
He kept gasoline prices at current levels even as he anticipated giving a $1 billion subsidy in 2024. Imbert said the property tax will be introduced next year.
Regarding the pressing question of law and order, he promised to recruit 1,000 new police officers next year instead of the usual 300. The police will get an extra $80 million for vehicles and equipment plus $15 million for a police riverine unit in Carenage. He announced $90 million to buy four scanners for TT’s ports, plus $4.5 million to buy 16 hand-held scanners.
He promised more consultations on actuarial recommendations to defer the retirement age from 60 to 65 to narrow the gap between contributions and claims on the National Insurance Board (NIB) pension fund.
He gave the background for justifying titling his budget Building Capacity for Diversification and Growth.
“I am pleased to confirm that economic activity rebounded in TT in 2022, under the influence of favourable terms of trade.”
After contracting by one per cent in 2021, which was actually an improvement on the contraction in 2020 due to covid19, the economy grew by 1.5 per cent in 2022. Growth continued in early 2023 at three per cent.
“Significantly and from a diversification perspective, economic growth was driven by a buoyant non-energy sector, which expanded by 5.8 per cent in 2022.”
While prices were raised by global supply-chain problems and by local flooding affecting food crops, he said TT had got a grip on inflation, now at four per cent.
“The financial system is sound, with adequate and appropriate capital, liquidity and profitability levels.”
Boasting of TT’s creditworthiness, he said its reputation was reflected by its recent half-billion-dollar bond being oversubscribed by three times.
“For the first time in more than ten years, we recorded a fiscal surplus in 2022 – 0.6 per cent of GDP.”
He advocated “preserving support for the most vulnerable and protecting essential capital spending.
“We firmly believe that capital expenditure must be maintained and expanded, as this creates jobs and stimulates economic activity, thus fostering economic growth.
“We are heartened by the projected growth in real GDP per-capita income, which in 2022 recorded US$16,500 and is projected to grow to US$18,400 in 2025.
“Madam Speaker, we have also just received good news on the employment front.”
He said CSO data showed unemployment fell to 3.7 per cent in April-June, from 4.9 per cent in January-March.
“This rate is one of the lowest unemployment rates ever achieved in TT and augurs very well for the future.”
He said the energy sector will remain the economy’s primary growth engine in the near to medium term.
“With the economic recovery taking root in 2022, our growth rate in 2023 is now estimated at 2.7 per cent, with broadly similar growth rates in 2024 and 2025.”
Imbert noted the unions that had agreed to a four per cent wage-hike, including those representing fire, prison and police officers, TTUTA, the Amalgamated Workers’ Union and the Defence Force Pay Review Committee. Their retirees would get a one-time lump sum payment of $4,000, at a cost to the Government of $19.7 million.
“This special payment will benefit approximately 1,600 monthly-paid officers and 100 hourly, daily and weekly-rated workers who retired between January 1, 2014 and September 30, 2016.”
For those with concluded pay-rise agreements, he said, “I am also giving these 37,000 public-sector workers an undertaking that all ministries and agencies involved will be provided with the necessary funds to pay this $1 billion in back pay by Christmas 2023.”
He said the Tobago House of Assembly’s (THA) allocation was $2.585 billion – $2.298 billion in recurrent expenditure; $260 million is development expenditure; $18 million for URP and $9.2 million for CEPEP. It is an increase of $64.2 million over last year. Beyond that, an additional $678.5 million is allocated to various ministries and state agencies for major projects in Tobago.
On the governance landscape, he expected to see the full proclamation of gambling legislation for the operating of a gambling commission, the promised creation of a TT Mortgage Bank by merging the TTMF and Home Mortgage Bank, and operation of Phoenix Park and Moruga Park.
Advocating various efforts at food security, he promised an extra $400 million to the Ministry of Agriculture in 2024, namely $250 million in farmers’ incentives and $150 million to develop infrastructure via the Palo Seco Agricultural Enterprises Company.
In the petrochemical sector, he proposed to use green hydrogen to manufacture ammonia and said talks were under way with Proman and Methanex towards a methanol-based marine-fuel bunkering facility (to supply fuel to ships.)
Imbert also advocated for the digitisation of many transactions and encouraged the use of e-payments. He lamented that a majority of businesses do not have an online banking or accept payment by digital means.
He said the Government would donate 2,400 fit-for-purpose laptops available to pupils and staff at 94 secondary schools.
“This digital ecosystem will offer online platforms and services for teachers and students to respond effectively to the changing needs of an increasingly digital society, particularly for business-oriented opportunities.”
On the vexed question of high demand for forex, he promised to try to get better access for SMEs and the repatriation to TT of business funds held abroad.
On education, he hoped to consult over the plight of parents facing “ever-changing book lists,” but meanwhile, 65,000 needy pupils will get a $1,000 book grant, at a cost to the Government of $65 million. He promised a training programme to boost the number of tech/voc teachers in schools. Some $7.7 million would be allocated to introduce the Junior Achievement programme to schools, he added.
Also, “I propose to introduce a 150 per cent tax allowance of up to $500,000 on corporate sponsorship to public and private schools registered with the Ministry of Education.”
Imbert allocated $7.69 million for the Adult Literacy Tutors Association to run an online literacy programme to reach remote areas and CEPEP and URP workers.
On housing, he announced $1.5 billion to reduce debt to housing contractors.
“We have in stock 1,692 unfinished units, and we envisage that we will spend approximately $350 million on ongoing and stalled legacy projects.
“I propose to allocate $100 million in 2024 for ongoing and new projects under the Housing and Village Improvement Programme." He proposed $700 million for the HDC to build 500-600 new housing units.
Imbert promised initiatives to boost the country’s water supply, earning several groans from opposition MPs.
He allocated $5 million for a programme aimed at at-risk communities, “to produce better informed, educated and more financially literate citizens with the skills and knowledge to make sensible decisions about their money.”
In addition, Imbert said, “I have allocated $19.5 million in 2024 to administer this community arts and crafts initiative in community centres throughout Trinidad.”
For the homeless, he allowed $23 million for an assessment centre/shelter at South Quay, Port of Spain, and $8 million for displaced centres elsewhere.
“We are establishing at Beach Camp, Palo Seco, a transition home to provide accommodation and other social services to former wards of the state who, at the age of 18, were required to vacate community residences established to house minors.”