BUDGET STATEMENT 2008/2009 by Finance Minister Karen Nunez Tesheira

the recommendation of the Trinidad and Tobago Olympic Committee. In addition, Policy Guidelines for the Grant of Financial Assistance to High Performance Athletes have been adopted and these Guidelines will detail conditions under which elite athletes may be supported in their preparation for and participation at various international competitions.

Youth

Mr. Speaker, the Government is determined that young people should become fully involved in planning and shaping their future. Successful youth mainstreaming in national policy planning will provide opportunities for our youth to participate and contribute their vision, on behalf of their peers, from the programme and project design stage to the implementation and evaluation stages.

The National Youth Policy advocates for young people to be empowered to make informed choices in life. The concept of youth empowerment involves two main pivots -a major facilitating role by the Government, as well as a role for young people themselves. Empowering young people requires that Government and other main partners create and support enabling conditions under which they can act on their own behalf, and on their own terms, rather than at the behest of others.

Mr. Speaker, in order to ensure the smooth and successful implementation of this policy, Government will target specific Ministries to be the focal points for mainstreaming of youth issues in line with the National Youth Policy. Young people will have the opportunity to participate in the design, planning, execution and evaluation of these Youth Programmes. A formal mandate will be drafted, subsequent to stakeholder workshops, to ensure that the youth are involved in the development of public policies and future programmes which directly impact their lives.

In the new fiscal year, it is envisaged that the National Youth Council (NYCTT) will be the driving force to catapult young people to the forefront of the governance process through nationally coordinated empowerment activities, and the proper representation of youth in the policy formulation process and on policy implementation bodies. The National Youth Council (NYCTT) will play a major role in implementing the projects outlined under the Strategic Implementation Plan of the National Youth Policy.

THE BUDGET ARITHMETIC

Review of Fiscal Operations

in Fiscal Year 2008

Mr. Speaker, I would now like to give this Honourable House a brief review of the Central Government operations during the 2008 fiscal year.

Mr. Speaker the last Budget was based on an assumed oil price of US$50 per barrel. As it turned out the weighted average oil price received during this fiscal year was US$93.15 per barrel. It is this price differential which has resulted in a level of energy tax collections, which is approximately $8 billion higher than budgeted.

Mr. Speaker, non-energy tax collections have also exceeded budget projections by $4.2 billion. The increase reflected the buoyancy of the non-energy sector, the rise in consumer imports which have boosted Value Added Tax (VAT), by approximately $ 1 billion more than projected, the success of the recent tax amnesty which yielded approximately $553 million in additional revenue, and continued improvement in tax administration. Mr. Speaker, over the past few years, we have been able to appreciate how much tax collections could be enhanced in response to changes in tax administration. This augurs well for the introduction of Trinidad and Tobago Revenue Authority.

On the expenditure side, Mr. Speaker, excluding amortization and transfers to the two main statutory funds, total central government expenditure amounted to $42.3 billion. This compared with the original budget figure of $40.3 billion, plus the supplementary appropriation, approved in May and September of $3.5 billion and $3.9 billion respectively.

Mr. Speaker these figures yield an overall surplus of $7.9Billion. Of this $4.72 billion has been transferred to the Heritage and Stabilisation Fund and $2.33 billion in net transfers to the Infrastructure Development Fund, leaving a net surplus of $39 million.

Mr. Speaker, permit me to explain to this Honourable House, the main areas where this $42.3 billion of government expenditure was allocated. With respect to current expenditure:

• Approximately $7.1 billion or 17.7 percent represented personnel emoluments;

• Pensions and transfers to individuals, amounted to $4.7 billion

• Subsidies amounted to $2.4 billion, of which $2.2 billion represented the fuel subsidy,

• Expenditure on Other Goods and Service amounted to $5.0 billion,

• Interest Payments were $2.8 billion,

• Transfers to Education Institutions were $1.4 billion, and

• Transfers to State Enterprises, Statutory Bodies and Local Government Bodies amounted to $7.0billion.

Capital expenditure amounted to $10 billion of which $4.5 billion was disbursed under the Public Sector Investment Programme and $5.5 billion under the Infrastructural Development Fund.

Fiscal Operations for 2009

Mr. Speaker, let me turn now to the Budget for 2009.

The Budget this year is calibrated on an assumed oil price of US$70 per barrel, a gas price of U$4.00 per mmbtu and a projected GDP growth of 5.6 percent. Based on these assumptions, total revenue is forecast at $49,465.2 million, comprising energy sector revenue of $19,924.6 million and non-energy revenue of $29,540.6 million.

Total Expenditure to be appropriated from the Consolidated Fund is $44,206.3 million of which $5,100 million will be transferred to the Infrastructure Development Fund. In addition, we estimate $6,750.8 million as direct charges on the Consolidated Fund, and $496 million from the Unemployment Fund and the Green Fund.

Mr. Speaker, the allocation of resources in this year's budget reflect some of the sectoral priorities that I have outlined.

Of the total expenditure:

* Education and Training will receive $ 7,121.6 million

* Infrastructure: $ 6,594.4 million including Works and Transport and Public Utilities

* Health: $ 4,343.0 million

* National Security $ 4,731.4 million

* Agriculture: $ 2,175.3 million

* Housing: $ 1,627.2 million

To summarize Mr. Speaker:

* Total Revenue is estimated to be $49,465.2 million

* Total Expenditure net of Capital Repayments and Sinking Funds $49,445.7 million

* For a surplus of $19.5 million

Mr. Speaker, I turn now to the specific fiscal measures underpinning this year's budget.

FISCAL MEASURES

Mr. Speaker, over the past several years the growth in our vehicle fleet has been astronomical. The series which once took one year to be completed now takes an average of three to four months. The data shows that from January 1, 2008 to the present, over 30,000 motor vehicles have been registered in Trinidad Tobago. The traffic congestion that our citizens now face on a daily basis throughout the country is having a serious negative effect on productivity, and the stress is leading to road rage and decline in the quality of life.

Mr. Speaker the Government has been allocating significant resources to improve our public transportation, which we believe is now reliable and efficient. Against this background Mr. Speaker we propose to increase the Motor Vehicle Tax (MVT) on the importation of Private Motor Vehicles in the following order:

This measure will require amendments to the Motor Vehicles and Road Traffic Act and will take effect from September 23, 2008 and will result in increased revenue collections of $525million.

CNG Conversion

Mr. Speaker the Government is in the process of expanding the distribution of Compressed National Gas (CNG) as we move to a cheaper, economically efficient and environmental friendly fuel system. As a consequence, we propose to remove the Customs Duty and Value added Tax on the Conversion Kits for modifying from Gas to CNG Kits. Mr. Speaker, further to this measure the Government proposes to convert all public service vehicles to CNG usage. The Government will also put measures in place to increase the number of service stations and geographic distribution of these stations offering CNG. This will be achieved over the next two years and begin a progressive move to reduce the fuel subside which now amounts to $2.4 billion.

Increase in the price

of Premium Gasoline

Mr. Speaker, the Government proposes to increase the price of premium gasoline from $3.00 per litre to $4.00 per litre. This measure will affect the high end of the market and will take immediate effect. The price for other grades of fuel will be retained. We envisage that there would be no increase in the cost of transportation charged by maxi taxis, buses, the majority of taxis and other transport vehicles that use diesel and super unleaded fuel for which the prices have been maintained.

Mr. Speaker, the savings from this measure is estimated at $200m.

Free Ferry Pass

Mr. Speaker, the Government recognizes the needs of our retired citizens faced by the increased cost of transportation and as a result, we propose to introduce a free "Ferry Pass" to persons 65 years and over for travel between Trinidad and Tobago. This measure will take effect from October 1, 2008 and is estimated to cost