$34B Budget addressing basic needs
Three hundred thousand (300,000) people — more than half of the workforce of Trinidad and Tobago, or more specifically all those persons who make $5,000 a month and less, will not be paying income tax from January 1, 2006. This tremendous benefit, announced in the Prime Minister’s $34 billion Budget, would embrace the lower and to some extent middle levels of both the public and private sector workforce. The three-hour long 2006 Budget presentation was delivered by the Prime Minister in his capacity as Finance Minister in the House of Representatives yesterday. The PM’s bag of treats seemed specially made for the middle income earner. But for those at the higher end — the upper middle and higher income earners (who make more than $60,000 a year), Manning announced a five percent reduction in the marginal tax rate. They will now pay a flat rate of 25 per cent (instead of the previous two tiered system of 25 per cent and 30 per cent). And in what appears to be a more egalitarian tax structure, corporation tax has also been reduced from 30 per cent to 25 per cent "to keep it in line with the personal income tax rate." And for the very poor, the Prime Minister has introduced the Smart Card to cushion the effect of high food prices. The Smart Card will allow for the purchase of specific food items. Families of three or less would receive $300; families of four to five persons $400 and families of six or more $500. Manning did not state what the income qualification for getting a Smart card would be, but he did state that the Smart Card system would target about 60,000 families and that it would replace the Food Hamper Programme. Manning also noted that Government would reduce or remove duty on selected imports, and use Namdevco to buy basic and agricultural foods in bulk as a means of facilitating a reduction of food prices. Manning also threw a major gift to all Trinidad and Tobago students at public tertiary institutions such as UWI, COSTAATT and the University of Trinidad and Tobago — no more fees. Making sure he had something for everyone, Manning also announced that there would be no age restrictions for the receipt of mortgages. Previously, older persons seeking an NHA mortgage had to pay a premium to ensure that the mortgage ended when they turned 60. The proposal, which exists in developed countries like the US, whereby older persons get the same long repayment terms as their younger peers, will be implemented. This would be facilitated by allowing mortgages to be transferred. Manning said that the much maligned URP would be scaled down once unemployment is reduced. Manning stated that with the increase in the personal allowance to $60,000 per annum, several tax allowances and deductions will be eliminated. These include the personal allowance of $40,000 per annum for individuals 60 years and over; the child allowance of $1,200; mortgage interest deduction; tax-free withdrawal from pension funds, the deferred annuity plans for the purchase of a first house; $10,000 deduction for credit unions and co-operatives, and the 25 per cent investment deduction in respect of equity investments in hotels. However, the topic which the Prime Minister promised to talk about at length — crime — was condensed into an announcement that Scotland Yard and FBI would establish units in this country to assist the Special Anti-crime Unit of Trinidad and Tobago. Once again, the lion’s share of the Budget allocation went to education, spanning the Ministries of Education and Science and Technology, while expenditure on National Security followed closely. The expenditure programme in the Budget is based on an oil price of US$35 per barrel. The revenue projections in the Budget are predicated on an oil price of US$45 per barrel. While the Budget basically stuck to the Government’s economic policy framework, the Prime Minister could not resist administering some political "bois" towards the conclusion. "We have spent some of the money on the people. We have invested for the people. We have saved some for the people, but we didn’t tief any money," he said, looking across at Panday, who by then was wearing a sheepish smile. Opposition Leader Basdeo Panday will respond to the Budget on Monday morning at 10. Business community: Govt not strong enough on crime In delivering the Budget in Parliament yesterday, the Prime Minister announced that Scotland Yard and the Federal Bureau of Investigations (FBI) would be working with the Special Anti-crime Unit of TT (SAUTT) to provide technology and training for local law enforcement agencies and the FBI would be assisting in the restructuring of the Police Service into an effective crime-fighting organisation. Manning expressed optimism that the initiative would have "a significant impact" on reducing crime in TT. The Prime Minister also spoke about ongoing security initiatives such as the Israeli coastal radar system (which is almost at full operational status), acquisition of new vessels for the Coast Guard, noting that those initiatives were significantly well advanced at this time. TT Chamber of Industry and Commerce president Christian Mouttet said he was very disappointed that the Prime Minister did not outline any immediate plans to arrest the crime situation in TT. He said the talk of the FBI and Scotland Yard seemed to be more medium-term than short-term initiatives. Mouttet said he wished that Manning would have expressed the same level of passion about reducing violent crime as he did about curbing gambling in TT. However, he added that more analysis was needed on the national security initiatives in the Budget. However, Mouttet was pleased about the new energy taxes, greater personal allowances, poverty reduction and measures to strengthen food security. San Juan Business Association president Gail Merhair said while she welcomed external agencies being brought in to help the police fight crime, she wondered if this would cause a duplication of efforts. Merhair welcomed all of the other fiscal measures in the Budget, but noted that citizens would not be able to enjoy those benefits to the fullest unless crime was brought under control. She added that the business community will continue to dialogue with the relevant authorities on the crime issue. TTMA president Paul Quesnel said he was dismayed that Government did not send a strong signal about how it intended to deal with crime, noting that the Prime Minister did not accept his responsibility towards doing all he could to bring crime under control in TT. However, Quesnel also welcomed initiatives in the Budget such as the tax reliefs, assistance for small and medium businesses and training components for CEPEP. However, like Merhair and Mouttet, Quesnel said citizens needed to be safe in order to benefit from the measures outlined in the Budget. Dookeran: Budget, an ‘economic bubble’ "An elevated rail from Arima to Diego Martin? Please! Be real!" she said. Dookeran said Government gave no comfort to the people on the issue of crime, which was the primary function of the State. "It was a big letdown in the light of what was expected," he said. He said he also had problems with the philosophical idea of "State-sponsored family development." He said it was predominance of State-sponsored activities which had led the country into the crisis of the ’80s. Dookeran said there would be extreme overheating of the economy which would lead to major imbalances. He said the Budget placed demands on the administrative system which, given Government’s track record, could not be fulfilled. Persad-Bissessar said the Budget was "so very long and boring." She said she would have liked to see a decrease of the VAT on food items rather than the Smart Card in which the beneficiaries would be hand-picked. THA’s Minority Leader, Ashworth Jack, said he was disappointed with what the Budget offered for Tobago. He said Government seemed to be taking back responsibility from Tobago. "It is a really sad day for Tobago. There wasn’t anything announced really for Tobago. In the 210 seconds that the Prime Minister spoke about Tobago, all he said was that we had done well in the tourism sector and I will reward you with less than you should get." Free tertiary education next year FREE tertiary education will be available from January 1, 2006, at all public tertiary education institutions; and four new A’ Level colleges, four secondary schools, 20 new primary schools and 50 Early Childhood Care and Education Centres will be constructed in this fiscal year. These were among the major announcements for the education sector made in yesterday’s Budget by Prime Minister and Finance Minister Patrick Manning. A total of $5007.7 million was allocated for education and training. Manning also announced that the Education Facilities Company Ltd (EFCL), which is yet to start work, has been given the mandate to address 103 projects in the short-term. Manning said in the education sector Government was looking to "increase access, provide enhanced quality and improved equity and equality of opportunity." The PM said the education programme was built on a modern comprehensive curriculum at all levels, enhanced and innovative teaching and improved teacher education and training. At the tertiary level, Manning said with a "demand for well-trained tertiary level graduates," the country was well on the way to achieving its goal of a 60 percent participation rate at the tertiary level by 2015. He happily announced that with the country’s revenue situation having improved considerably, the 2005 Budget promise to provide free tertiary education by 2008 was revised, and, as at January 1, next year, "all nationals of TT enrolled at public tertiary institutions, namely UWI, University of Trinidad and Tobago (UTT), College of Science Technology Applied Arts of TT (COSTAATT) and other institutions where the Government sponsors students, will be eligible for free tuition — that is free public tertiary education." Manning said the UTT’s initial enrolment of 1,600 in diploma and degree programmes was expected to increase to 3,100 in this academic year, based on several alliances established over the last year. He also announced that work had begun on the construction of the UTT campuses, including the main campus at Wallerfield, which will be completed by September 2008. Manning said the enrolment at COSTAATT in 2004/2005 was 4,763 students. Referring to pre-school, Manning said with a goal to achieve universal Early Childhood Care Education by 2010, when there will be 30,000 three and four year-olds, there is need for 600 childhood centres. To that end, he said Government proposed to build 50 centres during the 2005/2006 fiscal year. In terms of primary education, Manning said 150 schools will be built to replace those schools which are 50 years old. However, in this fiscal year, 20 schools will be built to the benefit of 10,000 students. At the secondary level, Manning said de-shifting and conversion of junior and senior secondary comprehensive schools to five and seven year institutions will continue. He said two-thirds of the secondary students currently attend five and seven year schools. Manning said when the de-shifting process is completed 15,000 students will benefit from full day schooling. Additionally, four new secondary schools will be built in Malabar, Mt Hope, Barataria and Curepe. Responding to the shortage of A’ Level places, Manning said four new A’ Level colleges will be built, and where necessary, places will be purchased at private institutions. He said Government intended to upgrade and expand facilities at a number of existing Government and assisted secondary schools, including Polytechnic Sixth Form and Corinth Sixth Form Schools. He said 21,130 students are expected to benefit from sixth form education. He also announced that in this fiscal year, foundation technologies and technology programmes will be introduced. The former is to cater for secondary school graduates who may wish to enter the labour market. In terms of training, Manning said technology centres were being constructed in Chaguanas and Point Fortin, and the upgrade of the St Bede’s Technology Centre in St Augustine was underway. He said plans were in place to open new MIC centres in Mayaro, Pleasantville and Diego Martin, and to expand existing facilities at Ste Madeleine and Macoya.
THE BUSINESS community yesterday expressed disappointment that Prime Minister Patrick Manning did not express any comprehensive short-term measures to deal with crime in Trinidad and Tobago in the 2005/2006 Budget.
UNC Political Leader designate Winston Dookeran described the 2006 Budget as an "economic bubble" which will evaporate, while his colleague Kamla Persad-Bissessar likened it to a pelau in which you "pull pieces from all over and just throw it in" in the hope that it turns out right. She also stated that the Budget was "delusional" — "too many grand plans that will never materialise."
By CHARLEEN THOMAS
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"$34B Budget addressing basic needs"