look at the budget and say praise the lord,” says Rhonda Maingot of the
Living Water Community. Michael Arneaud from the Chamber has pronounced it
“the most creative budget we’ve ever seen.” Errol McLeod is
“encouraged” on behalf of the Trade Union Movement, as is British Gas,
a major investor. For the first time in many years, a budget has been
passed which has had the thumbs up by a broad section of the population.
Finance Minister Brian Kuei Tung has managed to maintain the confidence of
business and investors and give the man in the street hope. Yes, he can
there are concerns. Frank Rampersad is worried about a possible rise in
inflation and pressure on the exchange rate over tax cuts. He feels a more
comprehensive social programme should have been put in place. McLeod
agrees, saying the Budget focused on economic growth rather than
development. Ken Valley finds the Finance Minister’s projections of 4.5%
growth in 1996 “unrealistic.” But Minister Brian Kuei Tung has his
back covered, by not giving too much detail, he has given his government
flexibility to manoeuvre. The budget debate begins tomorrow.
Arneaud, President, Trinidad & Tobago Chamber of Industry and
found it to be the most creative budget we’ve ever seen - The Chamber is
very appreciative of the fact that he was able to pull together a
comprehensive review in such a limited time. He was not only technically
sound, but communicated what he had to say clearly. We thought his
approach very positive and delivery excellent - a well balanced budget.
Despite the fact that the Minister was able to give a little bit here and
there he was able to raise revenue by over a billion dollars over last
year. I’m hoping he will be able to achieve surplus, but life is not
cast in concrete - we have to wait and see.
Rampersad, Economist and former Permanaent Secretary in the Ministry of
macro economic framework is healthy. I agree with his assessment of the
oil situation. It is credible. He also made the right noises in the area
of generating a fiscal surplus of 300 million dollars. He hasn’t told us
his foreign economic policy. Government has to take a more positive role
in transforming the economy. I do not see how he arrived at the growth
rate of 4.5 percent (which traditionally causes an increase in inflation)
and even if he does, the 11% increase in revenue seems unrealistically
high. I don’t want to be too critical because I want to give him a
chance to see what he will do. He’ll have to come back in June or July
and review the budget.
Valley, Opposition Parliamentarian:
am pleased with the tax concessions. I am, however, concerned that the
Minister is basing his budget on a growth of 4.5 % in 1996. (Growth for
the last two years has been about 3.5%, the highest figures for the last
ten years.) I am unclear as to his position on unassembled cars. The road
worthiness of those vehicles are questionable. What happens for instance
to a stolen vehicle. Can it be registered for $20-30,000?
Haynes, Financial Administrative Manager, British Gas:
are encouraged. The 1996 budget has addressed the importance of exchange
rate stability and controlled inflation for the business environment. It
indicated that the government is keen to attract and maintain
international investors. On the energy front, British Gas will be
monitoring very closely any changes to the institutional arrangements of
energy related organizations, particularly the Ministry of Energy and the
National Gas Company.
Mc Leod, President General, Oilfield Workers Trade Union:
are encouraged. I cannot say it is a sweetheart or an election budget
because workers reactions are mixed, some are happy, others not. The
Minister of Finance seemed to want to address all demands and concerns
raised by the various sectors and I think in doing that he may have
omitted to fully establish the philosophical background against which his
budget was formulated. The question of generating economic development as
opposed to economic growth has not been very clearly defined. There are a
number of policy issues which need to be addressed so we have a clear idea
of the direction in which the country is heading for sectors, such as
agriculture and energy around which so much revolves. I suppose the debate
might help to address that.
started off by identifying real issues of societies, poverty, unemployment
and income disparity but did not follow through with this in the budget.
He talked about the social situation without the net for vulnerable,
single parents and old age pensioners. In crime he has addressed prison,
police and judicial reform but should have focused on a social programme
which will prevent people from committing crimes in the first place.
think zero rating several basic foods is most welcome, as is raising
non-taxable income from $16,000 to $20,000. It will assist people on the
lower rungs of the economic ladder. The allocation to social programmes
for those considered below the poverty line is positive. But they must
define clearly what programmes they are taking about, how it will be
funded and the general parameters under which the programmes are going to
be applied. On the $90 million allocation to public servants, some people
will always put unemployed people against those who have jobs. They are
invited to consider that public servants have not had wage and salary
adjustments for about 10 years now and they have had to meet price
increases, a number of them have lost their houses because they could not
continue to service their mortgages.
Maingot, Living Waters Community:
look at the budget and I say “Praise the Lord.” I’m sure the poor
will feel a little lighter today. The $300 million allocation shows a lot
of political will to assist the poor of the country which is what we’ve
been hoping for many years. The removal of VAT goes straight to the poor.
That doesn’t need to go through an organisation. They can get relief
straight away. For the last 10 years, governments have had a feeding
programme for those who have nothing. I hope this will continue. The other
social programmes need to be formulated and will take longer to put in
think the Minister talked the talk without walking the walk. When we
analysed the budget, there was the question of poverty, unemployment, and
crime - one does not see policy coming through. The PNM concentrated on
enlarging the cake and we felt we were able to concentrate on social
programs. There was the concept of the social net of $1.1 billion which we
put in place afler two years of economic growth.
is not clear on how employment will be generated. The real problem in this
country are people who have to scrunt for a ten days. He has to find a way
of converting them into entrepreneurs. Is he going to expand or transform
URP? Although the manufacturing sector generated jobs in the 60’s and
70’s, in 1996 the future lies in the service sector. Apart from land
distribution, I am not too clear on his agricultural policies. His macro
economic frame is good and the budget was very positive to investors. But
I don’t see where jobs are coming from in the short term.
investment does generate jobs because of the sustained demand for labour
for producing and developing hydrocarbons. Exploration jobs are more
cut a lot of taxes. Reducing the corporate tax from 38% to 35% will only
increase his revenue in the long run. We have been saying, “Don’t kill
us with tax rates. Drop the tax rate and you will collect more dollars.”
A low tax rate stimulates the economy, helps business to grow, creates
employment and more people pay taxes. It works.
am not in favour of tax cuts. It increases income inequality and does not
promote investment. I am worried about the balance of payments effects on
the budget. He has reduced taxes on imported goods which will open a flood
of imports which don’t match exports. I looked at figures of VAT
collection and it has not changed for years even though the economy grew.
He can’t expect revenue on that score. He got more money on company
taxes in 1995 because the price of methanol went up last year but now
it’s down again.
have a different outlook to people who hang their hats on theory. He was
wise to reduce the two top rates, which puts more dollars in the hands of
consumers, allows them options to save invest or spend and contribute to
VAT. It goes in the economy and things turn around. The rate of inflation
held down to single digit (5%) because of a responsible and educated
public. We are doing better than any country in the Caribbean and most in
the world purely by good communications by powers that be and a
responsible public. You must be living in the past if you think people
will just run out the door and spend as soon as they have extra money.
Facts in front of me don't say that. But he should have introduced some
relief for life insurance premiums to encourage the public to save,
especially since insurance policies are a way for poor people to leave
money for children.
$90 million allocated to deal with debt owed to public servants is
encouraging although not satisfactory. Nothing was said about paying
public secretor employees their correct salaries which will prevent a
further accumulation of debt owed to them. I think the government has sent
signals that it is prepared to enter into meaningful dialogue with the PSA
aimed at settling the issue once and for all. I hope all parties will
approach the matter with maturity.