Budget highlights

During the question and answer segment he addressed the issue of diversification and noted that for far too long we have depended almost solely on the energy sector. Given that both price and production have been suppressed for some time now, it is imperative that we stimulate growth and innovation in our economy.

The TT Chamber recognised the well-known risks associated with our dependence on our hydrocarbon resources, while acknowledging the importance of managing those resources to enhance our economic well-being in the short and medium term.

At the same time, the Chamber is aware that we use these very resources to assist in the process of reducing our dependence in the long-term.

This is not in any way contradictory. On the one hand, some may misinterpret the emphasis on reducing the dependence, as a call to pay less attention to the sector. However, there is strong potential within the energy sector for not only funding such transformation, but also for leveraging strategic opportunities for diversification and development within the sector itself.

It was evident from the Budget presentation that the Minister of Finance understood this delicate balance and the TT Chamber was heartened to observe his recognition of the importance of consulting with stakeholders on the implications of government actions on the energy sector, particularly as it impacts production.

With regard to service delivery, more money simply does not mean more value. Successive administrations have yet to prove themselves institutionally capable of effectively providing value for money spent. In the current climate, increasing the allocation to one ministry in the annual budget does not lead to a proportionate increase in value to citizens. This has been proven to be true time and again in the case of national security, health and local government, to name but a few sectors.

Regarding the new 30% tax on individuals and companies, it appears that the easier option was to increase taxes on those already compliant, and at the same time, call upon the business community to invest, expand and become more innovative. It should be noted that investments and the like require capital, and this new tax regime may well restrict the availability of such capital.

The TT Chamber recognises the need to share the burden of adjustment across to those who have the capacity to carry that burden. We appreciate the Finance Minister’s reasoning that this tax will apply to persons earning in excess of one million dollars per annum. However, we also believe that the tax on corporations will result ultimately in impacting a much broader pool of entities, and this could restrict capital investment.

Is it that the private sector is far too risk-averse, as the Honourable Minister wondered at the Post- Budget meeting? Or is it that we would like Government to share measurable targets and timeframes for delivering on all that it proposes to deliver upon? In the coming weeks there will be much discourse and debate on the proposed fiscal package for 2017. Following on the heels of our post-budget analysis meeting, the TT Chamber will continue to closely monitor the outcomes, as we seek to represent the interest of our membership in the best way possible.