Increase allocations to local government for infrastructure works

A continuation of Opposition Leader Kamla Persad-Bissessar’s response to the 2023/2024 national budget in the House of Representatives on October 6.

SWAHA budget recommendations

The SWAHA board and executive wish to suggest the following for consideration:

*Local Government and Social Development: Increased allocations to local government to facilitate effective infrastructural works and the efficient delivery of essential services to all communities. Increased engagement with NGOs/NPOs for social development programmes.

* Crime: Focus on developing a crime action plan to reduce serious crimes, including the introduction of nationwide CCTVs, drones to patrol borders, and automation of Port and Customs. Seek foreign consultants to plan and execute crime plans.

*VAT and other taxes and duties: removal of VAT on essential foods and everyday pharmacy items. Remove duties and taxes on baby food and products. Removal of seven per cent online purchase tax

*Education: GATE: Allow funding for programmes with a need or future need and do not limit people who have already benefited. Expansion and upgrade of the Textbook Management Programme to include greater availability of e-textbooks. Complete construction of unfinished primary, secondary, and ECCE schools.

*Legislative agenda: Revisit procurement legislation to promote transparency and accountability. Proclaim legislation on data privacy, data protection, cybersecurity, and full proclamation on the Electronic Transaction Act. Property tax legislation to be reviewed in the context of current unresolved issues.

*Taxation: Automation of BIR, including cashless payments and refunds. Revisit tiered approach to PAYE. Tax incentives for non-institutional investors (public) to increase participation in the securities market.

*Micro, Small and Medium Enterprises: Public/private equity fund or venture capital fund. Expand Nedco funding. Government guarantee for MSME loans. Reintroduction of the Fair Share Programme. Further incentivise SME listing on the TTSE.

Recommendations from public consultations.

*Agriculture: Donny Rogers highlighted the pressing issues affecting crop reduction. Currently, Nestle is importing milk and poultry production has hit a low point. He has recommended for the Government to present a comprehensive plan for the agriculture sector.

*Crime: Selvonne Mitchell, from Montrose, suggested linking all existing residential and commercial security cameras in Chaguanas into an overarching security system that systematically covers areas, in collaboration with artificial intelligence, to identify criminals as they move from place to place.

*Culture: Banjela, the 2020 Calypso Young King, recommended establishment of partnerships with educational institutions to integrate cultural education into the curriculum, fostering a sense of cultural pride and identity from an early age.

*Education: Jasmine Ali recommended the completion of construction of the Preysal Primary School. Students of the Preysal Government Primary School currently are being housed at a community centre for the past five years.

*Health care for children/ disability grants: Patricia Lezama asked for the wait time and lack of beds at the nation’s hospitals to be addressed. Expressed her concerns with the funding given to senior citizens and persons with disabilities and recommended that the funding for differently abled children be increased as it doesn’t cover their medical expenses.

Kristen Townsend, of Mayaro, revealed that residents have to go to Sangre Grande or San Fernando to access hospital care and recommended the upgrade of the Mayaro health facility. Dr Narendra Roopnarine spoke about the need to improve the quality of health care provision and quantity. He suggested maternal health education be part of the school curriculum.

*Legal firearm access: Mr Ramjandra Singh mentioned difficulties in obtaining an FUL (firearm user’s license). Recommended the process be made easier.

*Infrastructure: Every consultation nationwide, people rightly complained about the state of our roads and bridges.

Christopher Jackman, from the OWTU, has emphasised that the shutting down of Petrotrin not only meant that we no longer produced fuel for domestic consumption but also did not produce bitumen, which is necessary for paving roads. Residents nationwide have complained about the dilapidated state of recreation grounds nationwide.

*Petrotrin pension plan: Mr Golcharran, a former employee of Petrotrin, raised concerns about the status of the pension plan which has been steadily deteriorating since the company’s shutdown. He recommended that the Government should allocate money to bolster the Petrotrin pension plan and for the minister to provide an update on the plan.

*Praedial larceny: Many farmers have raised the problem of praedial larceny at our consultations, and this deserves a special mention. The farmers suggested the Government provide the praedial larceny units with vehicles, proper equipment, and staffing.

*Prisoner rehabilitation: Nigel Moses, from Arima, suggested the need for a proper parole system in TT which can help with the judicial system to ensure crime goes down.

*Recreation: Kenneth Rampersad, from Tumpuna, wants to see more recreation grounds illuminated and upkept as there is a need for more people to exercise and increase family bonding.

*Scholarships: Emmerson Cheddie, of Siparia, requested increased allocations to provide more scholarships for poor and disadvantaged students.

*Special-needs citizens: Helen Narinesingh, from Arima, recommended more special-needs schools and an increase in special-needs grants.

*Tourism: In Sangre Grande and Mayaro, residents recommended tourism development along the east coast. They requested that the east coast be developed to become a premier tourist destination in the Caribbean.

*Water: Citizens all over the country have complained about the lack of water and the fact that not only does the Government expect them to pay bills and not receive the service, but the Government is looking to raise rates. Some residents complained of not getting pipe-borne water for almost 50 days. Some citizens called for the CEO of WASA to be removed.

*Youth unemployment: Ambika Goysne highlighted her concerns about employment for youth regarding the over saturation of the on-the-job programme. She highlighted that the waiting period for a first interview can take years. She recommended that the Government address this issue.

Areas of greatest concern

If this government had consulted with the people before this budget, the finance minister would have had an accurate list of priorities to impact areas of greatest concern positively.

That’s what we did when we were in government. When you talk to people, they will often give you very useful solutions. Indeed, citizens are very creative and informed. Many came to these consultations well-prepared, some with pages of ideas to share.

And that is the tragedy of this Government, they do not harness the potential, the experience, the ideas, or the greatness of our society. That is the attitude of this Government. We, on this side, are showing the country that our philosophy and practice are different, and the way we govern is participatory. People have given this Government endless chances for co-operative participation, but it fails them every time.

Year after year, this Government comes to this House and deludes themselves that the country is doing well, that the population is doing well, while citizens know the truth. It has cost our citizens $420 billion since they have taken office and will cost a further $59.209 billion (or more correctly $71.4 billion) over the next 12 months. Totalling almost $500 billion dollars or half a trillion dollars.

By the end of fiscal 2024, this Government would have spent almost half of a trillion dollars.

This year, the minister has themed the budget “Building Capacity for Diversification and Growth,” but he has given us zero measures during his four hours presentation for diversifying the economy and generating new revenue streams.

There can be no prosperity without economic security

Minister Imbert spent the first few minutes of his presentation, as always, trying to convince us that he inherited a country in crisis caused by low energy prices but was able to reverse the trend and move towards growth. Nothing is further from the truth as our macroeconomic indicators reveal.

There can be no prosperity without economic security.

GDP collapse

post- 2015

This Government’s anti-people decision-making undermined our economy, so much so that the real GDP collapsed by 10 billion dollars within the first year of the PNM taking office. And the country has not recovered to date!

The per capita GDP, which grew to $140,000 during my tenure, has now collapsed to $110,200, a loss of 21 percent of its real value, and yet this minister continues to boast of how well he has managed the economy.

Instead of taking this country forward, the Government’s policies have regressed the broad-based distribution of the economy back to the 2006 levels of per capita GDP. The data is obvious. The transformation that the minister boasted about last year was the polarisation of the economy away from a broad-based, multi-sectoral, multi-disciplinary structure to one in which only the factored few mega businesses survived. When the minister boasts of the economy growing, take it with a handful of salt and instead ask him how much the economy has contracted since he took over the treasury in 2015.

I am proud that my Government has the distinction of the highest average national output in our country’s history during my tenure.

Forex challenges

If the Government had continued UNC’s sport, education, and health tourism initiatives, our country would have generated millions in foreign exchange from new sources to complement revenues from the energy and small export manufacturing sector.

The deliberate, unilateral, and spontaneous decision to close Petrotrin has deprived our citizens of hundreds of millions of US dollars.

The Government’s laissez-faire attitude to non-energy businesses, even international ones like Arcelor Mittal, has seen positive foreign exchange revenue generators leave our shores.

The result has been a dramatic collapse in our foreign exchange reserves to the point where the Government is forced to borrow

at higher than necessary interest rates to refinance foreign debt. In my Government’s last full year in office, 2014, the official data

published by the Central Bank showed that we had approximately US$11.5 billion in reserves, roughly 13 months of import coverage.

The Central Bank puts our net official reserves at $6,258.4 million or less than eight months import cover, as of August 2023.

This is even though the Government has received billions in US dollars from traditional sources, including taxes and royalties

from international energy companies and local manufacturers.

Added to that would have been the US$2.5 billion in drawdowns from the HSF, another US$644 million, received from the IMF

via the special drawing rights, more than US$1.3 billion additionally received from the oil windfall, net borrowing of TT$ 33.6 billion over last eight years and the millions received in foreign grants during the pandemic. Where has this money gone?

But on Monday, when the minister had the opportunity to level with the country about the actual state of affairs of our nation’s foreign exchange reserves, the minister once more opted to misdirect and mislead.

I ask why the minister references 2022 figures for foreign exchange holdings? Why is he referring to gross official reserves rather than net official reserves?

The answer is obvious. Having failed miserably actually to increase the real level of foreign exchange reserves, Minister

Imbert is now artificially increasing the statistic by adding the foreign exchange held in private accounts in commercial banks

(over which he has no control) as well as the savings in the HSF to come up with a new metric which he has termed “external fiscal buffers.”

Thousands of business people, particularly small and medium-sised businesses, and even average citizens, disagree with

Minister Imbert when discussing forex availability.

When businesses face closure because they cannot get money to pay suppliers, they are in crisis. SMEs constitute over 90 percent of registered businesses in this country.

These businesses hire many workers, especially in retail. For these persons, the inability of their employers to get foreign exchange is a crisis.

The shortage is also a crisis for parents and children pursuing education abroad who cannot get foreign exchange to continue to pay fees.

I call on the minister to engage in real and meaningful consultation concerning the nation’s foreign exchange distribution. This needs to be a public forum in which members of the public and small and medium-sized businesses are allowed to participate.

But for this to be an open discussion with a real chance of a successful outcome as opposed to yet another talk shop, the minister needs to come clean to the national population about who has been getting these billions in foreign exchange over the past eight years.

It is high time that the minister stops hiding behind legislation and provides answers to the population. Citizens being denied access to foreign exchange must be told who is getting it, how much, and why.

I also challenge the Minister to tell this country what new foreign exchange revenue streams he has piloted and developed over the past eight years he has been in office and how much revenue each has generated.

I want to use this opportunity to direct this minister to the UNC’s national economic transformation plan, which contains many new initiatives for potential foreign exchange earners, which he is free to use.

Foreign Direct Investment

Foreign direct investment is a significant source of foreign exchange, economic growth, and development. Growing FDI is a

clear indication of investor confidence in an economy.

Here is the status of this country regarding FDI:

According to the most recent data published in the World Investment Report 2023, Foreign Direct Investment (FDI) to TT

was negative, at -$0.5 billion. Instead of investment coming into TT, investment was leaving.

In fact, the data shows clearly that while the Caribbean has had positive FDI, TT has lost FDI for five of the seven years

for which data is available under this PNM Government.

While this minister fiddles away with investor confidence in this country, other countries in the Caribbean are openly pursuing

investors with actual initiatives, proper marketing, and deliberate decisions to address investor decision-making.

Under Minister Imbert, from September 2016 to December 2022, TT lost US $1.5 billion as foreign direct investment fled the country.

By comparison, my Government generated high levels of foreign direct investment, with FDI from the energy sector totaling US$1.459 in 2015.

As an example of sustainable FDI, in 2013, my cabinet approved the project development agreement for a new petrochemical plant, the Mitsubishi methanol to dimethyl ether (DME) plant.

Rating agencies

The minister spent quite a while in his presentation patting himself on his back because of Moody’s agency rating of this country.

To be clear, Moody’s kept the country’s credit rating at Ba2, the same level the year before. That rating is within the noninvestment grade category or junk status.

Allow me to remind the minister of some indisputable facts. Before he became minister, our country’s rating by Moody’s was A3, which was prime investment grade. Today, the minister celebrates a collapse to Ba2 JUNK status rating as a significant achievement.

Only this minister can celebrate achieving a lower score than his predecessor and claim it is an improvement.

The minister has a long way to go to recover the ground and international credit rating and reputation that he has cost this country. This is nothing to celebrate; a positive or stable outlook does not matter when you are five levels lower.

But even the outlook itself is speculative, and in this case, it is premised on the continued high revenues from oil and gas following the Russian/Ukraine conflict, or improved oil and gas production as well as the Government adopting specific harsh

policies including further cutting of transfers and subsidies, implementation of the property tax, higher electricity rates and higher water rates, issues which severely compromise the standard of living of a substantial part of our country’s population.

Back in July, the minister announced that the new rating would have positively impacted the cost of borrowing by the Government.

However, in the recent bond issue of US$560 million, the Government was forced to offer rates of interest higher than other similar instruments on the market to attract investors, and again, the minister announced this as a reason to celebrate.

Value Added Tax

One of the most vexing issues for the business community of every size has been this Government’s abuse of businesses by illegally withholding VAT refunds.

In May 2023, Minister Imbert admitted to TT that the Government owed businessmen almost $8 billion in VAT refunds at the end of March 2023.

Six months have since passed, so logically, more businesses would have applied for due refunds since then.

The minister had advised then that a combination of bonds and cash payments would be used to settle a large portion of these arrears and suggested that repayment would have started between June and August 2023.

I know that businessmen listening to the minister’s presentation last Monday would have been exceptionally disappointed that the minister avoided any mention of settling refunds.

The hijacking of VAT refunds by the minister means that critical operating funds of businesses are inaccessible, and this directly affects the ability of these businesses to invest in stock, pay staff, and meet debt obligations to financial institutions; it affects the businesses credit rating and viability.

This multi-billion dollar outstanding and overdue VAT rebate is tantamount to the Government forcing struggling businesses (already burdened by crime, lack of access to forex, and a plethora of taxes) to provide tax-free loans to the Government.

The finance minister is sending mixed signals to the commercial sector.

He continues to punish legitimate businesses abiding by the law, dutifully paying their taxes, and submitting their VAT returns on time in favour of those who break the law and evade the VAT.

Click here to read more.