‘A vai-que-vai Budget’

“It’s a vai-que-vai budget (all over the place). They had no plan.” She was also concerned about a quarter bite taken from the allocations for the Ministry’s of Education (26 percent) and National Security/Police Service (24 percent) respectively, as she wondered which specific budgetary line-items would be thus cut. Flanked by Opposition MPs in the parliamentary chamber, Persad-Bissessar gave her offthe- cuff reaction to the Budget.

She asked aloud what would be the impact of a $17 billion cut in spending.

Persad-Bissessar said Finance Minister, Colm Imbert, had not given full details of his expected revenue streams. “We are going into a debt trap. The debt to GDP ratio is already over 60 percent and if we go further the country will be bankrupt.” She asked when did Imbert discover that the use of old rates of Land and Building Tax by a proposed TT Revenue Authority would be unconstitutional, instead of using new valuations based on the idea of a Property Tax. She said the Opposition had warned him of this previously. “How much revenue to collect from the Property Tax? Not $16 billion,” she scoffed, referring to a fiscal gap Imbert wants alleviated by borrowings and dipping into the Heritage and Stabilisation Fund.

Persad-Bissessar expressed surprise that Imbert had reiterated that the GATE subsidy will not be available to persons over age 50 years old, as she asserted that such a debarment is unconstitutional and will be fought in the law-courts. Asked if Imbert can both deter persons from the consumption of alcohol and tobacco and at the same time raise an extra $60 million in revenues by way of a 30 percent and 15 percent hike in duties, she accused him of “a level of hypocrisy”.

She said these items have an inelastic demand, where price-hikes in sin taxes don’t dampen consumption, adding, “Why didn’t he just say we need the money?”.

She also wanted to know if the Government has suddenly discovered that health problems can arise from alcohol and tobacco? Persad-Bissessar argued that Imbert’s proposed one-off sale of State assets such as shareholdings in Phoenix Park and FCB are not sustainable sources of revenue.

She was also concerned that the Government’s bond-issues are too generous, giving rates of 4.5 percent, compared to rates of one percent in bond-issues from other countries.

Alleging that Imbert had once said the country will be in trouble if its annual spending every fell below $55 billion, she said the Budget puts it at $45 billion. She said the Budget gave no help to society’s disadvantaged. “I’ve seen nothing for the helping the poor, the vulnerable and the ordinary man.” Referring to a electricity subsidy to some poor households, she asked if the Government is planning to raise electricity rates for the rest of the citizenry? Regarding FATCA, she said that despite the Government’s warning of a September 30 deadline, they had got an extension from the United States, proving that the sky was not falling.

Asked about a new 30 percent tax on incremental earning over $1 million for persons and companies.

“It sounds okay on paper but we have to see how it works in reality. Asked if it disincentivises companies, she said she’d first take a closer look at the proposals.

“The number one priority in the country is crime fighting. The Budget has been cut by 24 percent for crime-fighting. I am seriously concerned. Apart from saying ‘we’ll resource the National Security agencies’, there’s nothing really on how the Government intends to fight crime.” Asked if the diesel hike was inflationary, she replied, “Of course. (Higher) transport costs will mean increased costs of other items. It is a multiplier effect.”