Budget 2005/2006 Family time in TT

Enill said there have been many positive economic developments for TT since the 2004/2005 Budget was presented in Parliament on October 8, 2004. What has happened? "We recently had two upgrades by the rating agencies (Moodys and Standard and Poors). That means our country’s ability to negotiate financing on the international and local market based on country risk, is better than it was 12 months ago. Unemployment statistics indicate that there are less people without jobs than a year ago. Growth in the economy is doing well. Earnings are doing well. All in all the economy is doing well," he stated. Enill said based on the current global prices for crude oil, "we are getting more revenue for product." He also said the country continues to benefit from additional revenues in taxes paid by individuals and corporations. Indeed, Enill hinted that there has been increases above projections in the whole gamut of taxes."I feel our economy is doing extremely well," he added.

Enill said the upcoming Budget will be unlike any ever seen in TT’s history. "(Government) Ministries would have been preparing on the basis of the traditional template. What has occurred now is that the Prime Minister has placed the Government on a different focus. His focus has been the whole question of the family. It is his belief, that Government is basically elected to improve the circumstances of people and that the family is a unit that must be supported and strengthened. He asked all his ministers to relate what they do to improve the welfare of the family," he stated. "What he has basically asked is how does your ministry support the family. Whereas in the past it would have been done on the basis of expectations, we focusing now on tell me exactly how that is happening and let’s make sure we can do it." Enill said Government will be very clear in the Budget that whatever it does (health, education, water etc) is going to positively impact on the lives of all citizens.

Explaining that Government Ministries will submit their final Budget proposals to the Finance Ministry on August 26, Enill said there is now a rough template as to what the Budget could be. However just like the much-touted 2005 draft International Monetary Fund (IMF) Article IV Consultation document (which has since been proven not to contain a shred of evidence of Government squandermania), Enill said that was the first document and "where we end up could be significantly different from where we started." Stating that Budget Day is longer going to be September 5, Enill said a budget date will be announced in two weeks time.

On Manning’s hint that Budget 2005/2006 could surpass last year’s $27 billion budget, Enill said that figure would be determined at the end of the current exercise. Observing that Government has long been criticised for not paying attention to the non-energy sector of the economy, Enill said the population will see a paradigm shift in this regard. This will be especially visible in agriculture, tourism, financial services and traditional manufacturing. He said the beginning of Government’s exercise to deliver promised agricultural lands to former Caroni (1975) Ltd workers was the first stage in Government’s plan to shift from the sugar industry into a whole new era of agriculture in TT.

"Once that is out of the way, we are now focusing on stage two which is looking at agriculture in its totality," he said. This led right into the vexatious issue of rising food prices in TT which Enill said is unacceptable to the Government. He indicated that a special committee chaired by Legal Affairs Minister Christine Kangaloo has been mandated to bring proposals to Cabinet "to make food more affordable to most challenged (in the society)." "Part of that would involve encouraging people back into agriculture and how you manage agricultural assets that you have to supplement our food basket to ensure that food can be made affordable," Enill explained. He hinted that the issue of crop insurance has not been decided upon and the committee will report to Cabinet before the Budget is laid in Parliament.

In the meantime, tourism and financial services are booming in TT. In January, Manning hinted at the possibility of the Budget 2005/2006 having a tourism component especially for Tobago. Enill said traditional manufacturing "took some licks" due to some of the events in Grenada in 2004 but there has been no impact on the economy because of that. He supported Trade and Industry Minister Ken Valley’s assessment that foreign direct investment in TT remains "extremely healthy" at this time. He said TT remains a comparatively safe country and extremely competitive within the global arena. Enill explained that Government has carefully studied the experiences of other energy-producing nations and, notwithstanding criticisms about its intervention in the social sector, Government knows that "you cannot have political stability in a country where your revenues are high and half your population is poor." For 2005, Government has spent a total of $304,940,400 as the training component of social sector programmes such as Helping Youth Prepare for

Employment (HYPE) $19,000,000, On-the-Job-Training (OJT) $38,000,000, Dollar for Dollar (now GATE) $75,000,000, Civilian Conservation Corps- $30,000,000, Geriatric Adolesence Programme $7,500,000 and the Multi-Sector Skills Training Prog-ramme (MUST) — $47,568,000.

He reiterated Manning’s position that the Community Environmental Protection and Enhancement Programme (CEPEP) is an entrepreneurship programme with a significant training component in it. The Unemployment Relief Prog-ramme (URP), Enill continued, is simply an initiative to ensure that persons who are otherwise unemployable and their dependents "have the same chances as those in a society who can afford it." "To me, that is fundamentally different to simply making work for a group of people without extending it through its total situation," he added. Manning said Government had no intention of increasing salaries in URP and social sector programmes would be reduced over time as Government deems it necessary to do so.

National security, health, education, housing will again be some of the main priorities in the Budget. In the last two Budgets, Manning has repeatedly declared war against the criminals and left many wondering if the Government is merely grand charging on what is arguably the most serious issue in TT today. "We have put money resources into national security. Over the last year, we have put software type resources into national security," Enill said. He then disclosed that National Security Minister Martin Joseph has dispatched key police officers to different global jurisdictions "with a view to giving them the necessary management skills in order to make better decisions on the use of the resources." However Enill said the primary hurdle which Government faces in re-tooling the Police Service into an effective crime-fighting force is the establishment of an incentive-based appraisal system in the service "that rewards good performance and sanctions bad performance." "There is a need to change the way they (police) work. Crime can only be addressed if you have the management, using the assets to a particular result," the minister said.

Noting that debate on the Police Reform Bills is inevitable, Enill said his view is that actual management of the Police Service must lie in the hands of the Police Commissioner and not in the Police Service Commission (PSC). The PSC, Enill contends, should primarily deal with issues such as officers being by-passed for promotion and victimisation.

On Value Added Tax (VAT) and other forms of non-energy taxation, Enill said that review is underway and would be completed soon. Only then, he hinted would Government be in a position to determine what changes could be made to the non-energy tax structure. With the passage of legislation to reform the petroleum tax out of the way, Enill disclosed that similar legislation regarded the tax regime for natural gas should be finished before Budget Day. Asked whether this would be included in the Budget, he replied, "The thinking is to include it in the Budget but that could change. We have not determined that as yet. The way we are going through the process, we are trying to ensure that there is buying from the producers, there is buying from the stakeholders."

Are the energy companies worried about separate oil and gas taxes? Enill said this is not so. "We have said that the taxes we have changed have impacted the supplemental petroleum tax regime. Now, the supplemental tax regime has more to do with price than operations. When the price of oil is $13, taxes are zero. If $40 (is the oil price), taxes are a function of the increase you get between the cost and the additional. The piece of tax we have interfered with is not the normal operational taxation issue. We are saying that once the price of oil is higher than what we had planned, then the country should benefit in a way that reflects that higher price. Once price goes low, then the companies will benefit more than we do. So what we were trying to basically do is at this point in time, based on the prices, is ensure that we can get a little bit more off the top based on the price base," he explained.

Enill said Government continues to place money into the Heritage Stabilisation Fund which currently stand at $4 billion. Financial sector reform in TT is going "according to plan" and Enill said with the Securities and Exchange Commission establishing legislation for greater transparency and accountability in the market place, "the market is becoming more of a sophisticated market and the regulators are becoming more aggressive in making sure there is market behaviour to ensure that customers can get the benefit." Steps are also being taken to ensure that the nation’s banking, insurance and credit union sectors are all strong.

Enill said Budgets passed by all governments in TT are election Budgets. because they "determine whether the population believes you are working in their interest or otherwise." On the IMF and World Bank meetings in Washington DC in October, Enill said TT could ill afford not to attend these meetings because they keep Government abreast of global economic developments and thus help it to shape its fiscal strategies and policies.