2018 BUDGET PRESENTED BY AHAMAD JEFFREY KHAN, FUTURE MINISTER OF FINANCE OCTOBER 4, 2017.
FOR THE GOVERNMENT OF THE REPUBLIC OF TRINIDAD AND TOBAGO
P. ITEM (P refers to the page on which you will find each item).
3. GLOBAL CONTEXT
4. STATE OF THE LOCAL ECONOMY
8. MEDIUM-TERM OUTLOOK
9. SECTORAL POLICIES
10. MANUFACTURING AND SPECIAL ECONOMIC ZONES.
13. SMALL AND MEDIUM SIZED BUSINESS.
14. INFORMATION AND COMMUNICATION TECHNOLOGY.
15. CRIME AND NATIONAL SECURITY.
16. SOCIAL SECTOR POLICIES.
16. HEALTH AND HEALTHCARE.
17. ARTS AND CULTURE.
17. SOCIAL SAFETY NET.
18. PEOPLE WITH DISABILITIES.
18. REVENUE AUTHORITY AND PROPERTY TAXES.
18. STATISTICAL INSTITUTE.
19. GENERAL ACCOUNTING OFFICE.
20. ECONOMIC AND FINANCIAL MANAGEMENT.
20. PUBLIC SECTOR INVESTMENT PROGRAMS.
21. PUBLIC - PRIVATE - PARTNERSHIPS.
22. FOREIGN EXCHANGE MARKET.
24. ESTIMATES OF REVENUE AND EXPENDITURE.
25. BUDGET ALLOCATIONS.
26. PERSONAL DEDUCTIONS FROM ANNUAL EMOLUMENT INCOME.
27 BUSINESS FUND LEVY.
27. GREEN FUND LEVY.
27. VALUE ADDED TAXES.
27. THE TRINIDAD AND TOBAGO REVENUE AUTHORITY.
27. PROPERTY TAX.
28. FUEL SUBSIDY.
28. NIS AND OLD AGE PENSION.
29. PUBLIC SERVICES.
29. ON THE JOB TRAINING PROGRAM.
29. INFRASTRUCTURE INCENTIVES.
30. JUDICIAL SERVICES.
31. PUBLIC PRIVATE PARTNERSHIPS.
People of Trinidad and Tobago, while I am not your Current Minister of Finance, I feel inclined to offer the 2018 Budget presentation on behalf of The Organization of Independent Candidates.
There are many entities who have been on social media and otherwise indicating that they can offer a change however they act towards peoples emotions without any concrete methodology of how they will accomplish this. I offer this Budget to the Citizens of Trinidad and Tobago so they can be the judge of the best person or party to run Trinidad and Tobago.
This is a prerequisite of what we can offer the country and our expertise. In preparing this document I have consulted experts in the various fields who have developed and implemented varying economic platforms and policies for Governments and Corporations yielding phenomenal results. I encourage citizens to read the following with an open mind and make your own determination if a government of The Organization of Independent Candidates would be the government you want. The politics of deception, betrayal, greed, arrogance, waste and mismanagement have continued in the PNM from the UNC and their predecessors. The citizens of Trinidad and Tobago must whole heartedly reject officially-sanctioned corruption, the squandering of public funds, discrimination, immorality, deception, inequality, broken promises, nepotism, inadequate water and road works as well as cronyism. We offer strong moral character, values of honesty and officers of the government who are truly there to serve the citizens not serve themselves. While many believe the Kamla Persad Bissessar Administration was running the country effectively, it is note worthy that they were running a deficit every year and spending by drawing on the countries overdraft, etc. Close examination would show that it is liken to living a life of luxury on credit cards, eventually you have to pay for it. Unfortunately it is the PNM that is now trying to pay for it and their lack of expertise has only left them running around like a chicken with its head cut off.
As leader of The Organization Of Independent Candidates, and the one who will be charged with managing the nation’s finances I have fashioned this budget with the motto of “The Foundation of a Prosperous Future”.
As Colm Imbert stated in his 2016 Budget “The majority of the population is exhausted with the politics of “mamaguy”. This country has long been integrated into the international economic and financial system. We are not isolated from events taking place in the rest of the world and those events today have a direct impact on Trinidad and Tobago. The 2018 Budget is being presented to put Trinidad and Tobago on a sound standing and make it the envy of the Caribbean being a place people will strive to migrate to rather than migrate away from.
This Budget was done with a view to devising appropriate solutions to confront our immediate and developmental challenges. This solution with the right people at the helm is an easy task. If anyone would refer the the economy of China with approximately 1.5 billion people, managing the economy of Trinidad and Tobago and having a balanced budget is an easy task, for this is similar to a small village in China with easy oversight however, the one primary impediment that every past administration has been burdened with is CORRUPTION. We have identified a range of solutions for addressing these challenges.
STATE OF THE LOCAL ECONOMY.
Having reviewed all of the information available in relation to the performance of PNM and past UNC it is obvious that these administrations were unaware and unable to formulate a proper plan to stimulate the economy or even improve the lives of citizens. Every measure we will offer will not only raise the standard of living of the citizens but alleviate crime and grow the economy. The fundamental Problems facing the Trinidad and Tobago Economy are:
• Bills which Government couldn’t discharge. • Chronic minimal economic growth.
• Slight downward trend for past decade despite few growth spurts. • Rate of growth of four and a half per cent in 2007 reached under three per cent in 2013, declining steadily since.
• 2016 growth figure almost negative three per cent. • 2018 revenue situation very challenging.
• Value of import/export reserves dropped from $11b (2015) to $8.6b (2017).
• T&T currently has 9 months of import cover, described as “reasonable”.
• Transfers and subsidies from $17.7 b (2007) to $27.8 b (2016) • Personnel expenditure rose from $6.2b (2007) to $9.6 b (2016), minus contract expenditure.
• Productivity waned by over 7 per cent from 2015 - 2016
Total energy exports are estimated at less than US$5.5 billion in 2016,
As a result, the fiscal deficit ballooned to $9.0 billion, or roughly more than 5 percent of GDP; compared to the budgeted deficit of $4.3 billion or 2.7 percent of GDP.
But even this preliminary fiscal outturn may be underestimating the real deterioration of the central government finances, for two main reasons: Firstly, these estimates are on a cash basis, which means that they do not include certain sizable commitments made in the fiscal year 2016 which now need to form part of the 2018 budget. Information is available on some of these outstanding arrears, such as the unpaid balance of some public sector wage settlements and payments arrears accumulated by some state agencies, such as the Housing Development Corporation (HDC), the Urban Development Corporation of Trinidad and Tobago (UDeCOTT), the National Infrastructure Development Company (NIDCO), Education Facilities Company Limited (EFCL) and the Estate Management and Business Development Company (EMBD).
It should be noted that the Ministry of Finance is still gathering comprehensive data on outstanding arrears due to contractors and other suppliers of goods and services. Further, despite our best efforts to conserve and maintain expenditure in 2017 at the revised 2016 level, the administration has encumbered with salaries in arrears based on the conclusion of collective agreements with a number of trade unions.
I will touch on some of the main highlights of the fiscal year 2017 outturn. Of primary importance is the fact that revenue collections from the oil companies in fiscal year 2017 amounted to $472 million, Much less than the budgeted estimate, reflecting both price and volume setbacks. I wish to underscore this is the lowest level of revenue collected from the energy sector since fiscal year 2011; Points to consider are
There was a shortfall on income taxes and VAT collections combined, reflecting the stagnation in the non-energy sector; VAT levels from $5 billion (2007) to “flat” now.
On the expenditure side, current expenditure was lower than projected, primarily because of the significant reduction in the petroleum subsidy due to the decline in oil prices. However, the public sector wage bill exceeded budget estimates because of part-payment of the back-pay from the wage settlements with civil servants; Energy sector revenues, taxes, royalties dropped from $15.7b (2010) to $2.1b (2017), an 89 per cent plus fall in main revenue sources.
Foreign exchange sales to the public since January totaled US $3.7b but forex inflows were US $2.55b. Biggest Forex users: retail and distribution sectors, credit card transactions, manufacturing, financial services sectors.
Tax revenues: $40b (2008) to $15b (2017). Taxes from oil companies: $25b (2008) to $472 million (2017) .
The evolution of public finances over the past few years has seriously undermined our once comfortable net public sector debt position. Current account went from surplus (2007) to deficits (up to 2016). At the end of 2010, our net public sector debt stood at 32.2 percent of GDP. By the end of fiscal year 2014 this ratio had risen to 40.2 percent of GDP. With the explosion in government borrowing combined with a decline in nominal GDP, the net public sector debt to GDP ratio has surged to 46.3 percent of GDP in September 2015; and
Within our public debt profile, external public sector debt increased from 8.0 percent of GDP in 2010 to 9.2 percent of GDP in 2015. After spending by the UNC of over $300.0 billion in five years and three months and 100 billion by the PNM, can the average citizen conclude:
that they are living comfortably and at ease free of the fear of criminal activity?
that the health care institutions are operating optimally?
that the public transit system is effective and efficient?
The Roads are adequate and without traffic gridlock?
that electricity, water supply, internet and other utilities are affordable and reliable?
that the schooling system is safe, with an environment cultured for learning?
that foodstuff are readily available and easily accessible at fair prices?
that there are facilities for the disabled, abused, single mothers and victims of violence?
The level of expenditure was financed by a mix of mechanisms – all of which are unsustainable. Now is the time for Colm Imbert to take decisive action and use real proven methods to arrest the slide Trinidad and Tobago is experiencing. Colm Imbert has been “playing for time, hoping for an increase in energy prices and gas output. During these trying times where they is no horizon in sight to determine that oil and gas prices will rise again the period of this adjustment process is long, this could take at least ten years. Trinidad and Tobago is now in survival mode, so we need to determine what is critical for our survival, what are our priorities, and those are the things that the government has not begun to addressed.
The government’s revenue projections presented at mid-term review has been too optimistic. One need only look at past examples to see the pattern. Last fiscal year the state generated $44.01 billion in revenue and, for the current year, it has projected a total of $48.00 billion. The problem is that, if this fiscal year’s tax collection pattern is similar to last year’s, with the period from October to March representing 45 per cent of the revenue, T&T may be heading to a considerable shortfall.
For the corresponding period October 2016 to March 2017 the State only collected $16 billion in fiscal revenues and, if one were to again assume that this will stand for 45 per cent of all Government revenue to be collected for fiscal year 2016/17, then this interprets that for this fiscal year the State would realize a mere $36.8 billion in revenues, that would leave the government over $10 billion short of its forecast.
The problems for Government do not stop there.
They have consistently depended on crude oil and have always budgeted a higher average crude oil price (over the 2010 to 2017 period),
They have increased dividends from State Enterprises, including significant amounts from the National Gas Company;
Offered tax amnesties where it has not been prudent to do so;
Squandered proceeds from the sale of assets in expenses rather than investments;
They have consistently borrowed from the international and domestic markets which increased our public sector debt; and have used the built-up balances in the Treasury and also the full annual overdraft facility of approximately $9.0 billion in the Central Bank.
At the start of the current fiscal year, the balance of the country’s Consolidated Fund, Government’s main bank account, was $29.5 billion in the red, at least an improvement on the previous year’s $33 billion gap. In his mid-year budget review on May 10, Colm Imbert said the reality currently facing the country is “how to run an economy accustomed to $57 billion in expenditure on $37 billion in tax revenue”.
The challenge for The Government is that even if expenditure is cut by five per cent, the “budget deficit would still be large”. The solution here is to raise revenues through innovative means and to ensure that there is an efficient and effective tax regime.
“Such a large fiscal deficit, is viewed as weak governance and when considered against the backdrop of the International Monetary Fund’s estimate for the TT economy of 5.1 per cent contraction for 2016, would lower the confidence that business people have in the economy and stifle the investment process, Investment is the key to the economic growth and The Government has made no headway or efforts to encourage investment.
Notwithstanding billions of dollars in borrowings, tax amnesties, extraordinary dividends, sale of assets, and high oil and gas prices, cash balances at the Treasury moved from a positive $6.5 billion on May 24, 2010 we were in credit then, to a negative of $8.5 billion in the middle of September 2015, a reversal of $15.0 billion. Under the PNM the fall has continued and the negative has increased further.
Generating sustainable non-energy revenue in a predominantly oil and gas economy is a necessary requirement for ensuring that public services and development expenditure are met in a competitive environment.
Our GDP growth no more than 1.0 - 1.4 percent per year has continued under the PNM and will no doubt continue with their measures but under The Organization Of Independent Candidates it is expected to from to between 3% to 5% over the next year. Our projections are based on our initiatives and the measures we will implement and put in place.
These factors will give the government the capacity to drive the non-energy sector which will include the private sector’s willingness to expand investment and production for export markets. The Organization of Independent Candidates is committed to taking measures to reverse the decline in oil and gas production and to boost exploration activity.
With low oil prices, it is expected that corporation tax payments from the oil companies in 2017 will be nominal, compared with a few years ago, when income from this sector exceeded $18.0 billion. Accordingly, it needs emphasizing that in the absence of a well-thought out adjustment strategy, the fiscal projections will definitely show continued and sizable deficits over the next three to five years, a substantial reduction in our official foreign reserves and a rise beyond 60.0 percent of GDP in our net public sector debt. Some things Trinidad and Tobago may want in 2018 must be postponed. Trinidad and Tobago should remain open to any/all suggestions to boost revenue levels with a policy on forex priority for firms or industries generating reasonable amounts of forex.
This will be an untenable situation, which we must avoid at all costs, through prudent fiscal management. There is no denying the need for fiscal stabilization in order to facilitate faster economic growth over the medium term. Immediate measures would include removing the red tape businesses face in setting up and getting approvals. The Government would move to immediately implement a “One Stop Shop” where companies can quickly and effectively get all the necessary paperwork done and approvals completed in a timely manner thereby making Trinidad and Tobago attractive to foreign investors, In addition International Companies wanting to bring their expertise to Trinidad and Tobago must be able to easily get work permits for their workers.
Over the next six months, we would hold a series of consultations with all main stakeholders and with the country at large on the state of the economy and on the financial challenges and opportunities we face, as a country. Coming out of these consultations, we shall make appropriate budgetary adjustments, if required, at the time of the normal mid-year Review, which is carded for the end of March 2018.
The energy sector has always been the main driver of economic growth in Trinidad and Tobago contributing on the average approximately 40.0 percent of GDP. This is one of the factors of the economy that must be addressed and changed. Since 2008 when its contribution to GDP achieved a high of 50.8 percent, the sector’s contribution to growth has been on the decline, reaching a low of 37.2 percent in 2014. This decline can be attributed to a number of factors such as the reduction in the production of oil and gas and lower energy prices. In addition policies of this and past administrations have made development of new sources by the energy companies unattractive, and Organization of Independent Candidates administration will offer incentives such as tax breaks and duty free concessions as well as a better and easier method of obtaining and exploring exploration blocks available. Oil exploration is an expensive and resource intensive process and countries around the world offer many incentives to attract companies and Trinidad and Tobago must match or exceed these incentives to be competitive on the world market. As one of several hydrocarbon resource-rich countries vying for capital investment we are mindful of the significant developments taking place in the production of unconventional energy resources such as shale oil and gas production in many parts of the world, including in one of our markets: the United States of America. Having these big energy companies come to our shore not only increases revenues through royalties but creates local high paying jobs for the citizens.
We intend to commence discussions with all stakeholders on the adoption of appropriate strategies and incentives that would result in new production in these fields. We will also move forward with a comprehensive review of existing arrangements along the natural gas value chain and where necessary implement appropriate measures on key aspects of the oil and gas sector. Because of mis management and poor administration at The Natural Gas Company we now have 4 of the 5 trains at the Pt. Lisas Industrial Estate non operational. This represents a significant reduction in the foreign exchange earned by Trinidad and Tobago.
The Organization of Independent Candidates will streamline the National gas Company and the Energy Companies to ensure the supply of Natural Gas into The Pt. Lisas' Industrial Estate thereby restarting the petrochemical industry and revitalizing the foreign exchange streams and also creating jobs. The stark reality is that oil and gas production has been on a steady decline since 2010. Specifically, oil and condensate production has fallen from 100,000 barrels a day in 2010 to 80,000 barrels a day in 2015, a decrease of 20.0 percent. The August 2015 production low of 75,238 barrels is of particular concern. Natural rates of decline and the absence of new discoveries are impacting on the major economic growth driver and our revenues. We must, therefore, take decisive action in our energy sector, to reverse the stagnation and decline of the last decade.
We will re-examine the current levels of Supplementary Petroleum Tax (SPT), to create better incentives for production from small and medium–sized fields, which we are carefully considering, with the assistance of energy experts. Renewable energy is also high on the agenda of The Organization of Independent Candidates and we will strive to offer incentives to companies involved in green energy and also offer incentives to consumers who “go green”. This will stimulate business in this sector and also be environmentally friendly while being good for the consumer. In particular, the practical use of solar and wind energy within the domestic and commercial sectors is easily implementable while inexpensive for the government while it will yell much needed revenue from start ups since the market is an open one.
Our target is that by the year 2020, at least 15.0 percent of the energy generated in this country should be from the renewable sources. Through grants and loans to taxi drivers and other stakeholders we will stimulate the move to Compressed Natural Gas in light of its environmental benefits and the positive impact on reducing the subsidy on transportation fuels. The past problems have always been the cost of the transformation kit and the availability of refueling stations. We will offer incentives to stations who begin offering refueling stations as well as charging for electric cars. We will also offer incentives to mall owners and large wholesalers and retailers who offer charging stations for electric vehicles.
MANUFACTURING AND SPECIAL ECONOMIC ZONES.
In Trinidad and Tobago with a natural resource sector, the manufacturing sector has stagnated. The sector is now accounting for less than 10.0 percent of GDP. Trinidad and Tobago produces world class products which are comparable to any international products available internationally. We will implement a policy to protect local manufacturers who wish to endeavor on specific products by implementing higher duties on similarly imported products as well as offer incentives such as tax breaks and removal of import duties on equipment and vehicles needed for start ups. We will accord high prominence to this sector and work with the stakeholders in getting their products to market at the shortest time in our efforts to strengthen and diversify the economic base of the economy.
We will make exportation of locally manufactured products to other Caribbean Countries easy and efficient and in collaboration with our manufacturers and exporters, we will intensify efforts to penetrate new markets, in particular, in South and Central America. A special department will be set up for trade facilitation and to negotiate market access agreements as well as investment treaties which will facilitate this new export thrust into all extra regional markets. We will through local partnerships complete and fully operationalize the Tamana Intech Park and the Piarco Aero Park. Trinidad and Tobago has only 1.5 million people and markets such as the USA, China and ASIA have hundreds of millions of people.
Through our consulates and Embassies we will set up networks and supply chains to get Trinidad and Tobago products recognized and sold worldwide. Through public-private-partnerships we will upgrade all existing industrial estates and create new ones, thereby generating new growth areas with high-quality jobs. These Special Economic Zones will become effective instruments for industrial production, economic growth, export promotion and employment creation. Worker ethic has been identified in the Ease of Doing Business index as the number one business obstacle in Trinidad and Tobago,
Also, Trinidad and Tobago’s real effective exchange rate in 2016 was 79 per cent more overvalued than in 2000. Presently even with the floating exchange rate and foreign exchange being sarce, the real rate being paid can be anywhere form 7.50 to 8.00 for 1 USD. The economy’s ranking on the Ease of Doing Business index and Global Competitiveness Index has been sliding, labour productivity has been falling, debt rising, the current account balance worsening and the shares of employment in manufacturing, agriculture and tourism falling.
One of our keys to consider is how to get people to work harder in an environment of rising prices, limited wage increases and falling government budgetary outlays. This is a critical question at the heart of T&T’s economic progress for the next ten years. This is a very trying period. Growth in the next 10 years would be moderate, at best under the present PNM and unless a competent Administration is put in place with real experiences and knowledgeable financial experts at the helm there will be no change in the coming years.
There are countless businesses and individuals abroad who would be willing to come to Trinidad and Tobago to conduct business if the right climate exists and it is the Governments job to create this climate. Our embassies and consulates have too often been managed by friends or family who have little or no experience in attracting business intellect and capital to our shores. Most of these people have no knowledge in how to strengthened or promote our economic and commercial interests.We need to promote the local private sector and state enterprises in the marketing of their products and services. Investors expect that doing business is easily facilitated with regulations and laws being enforced in a predictable manner. In this environment with cost and uncertainty reduced, the quality of the business environment will be improved and private investment facilitated. Our Embassy’s and Consulate’s need people who understand how to market “Brand Trinidad and Tobago”.
Food security has been an elusive policy objective since we in Trinidad and Tobago assumed management of our economy in 1962. Primarily because Farmers and Agriculture has been looked down upon as work of the minimal while in developed countries this could not be further from the truth. Agriculture is a billion dollar a year business with farmers being some of the wealthiest in their respective countries. Agro-processing, agricultural co-operatives and the such are important factors to in crude in the new push for Agriculture.
Land must be made readily available with incentives offered to those interested in Agriculture such as tax concessions and relaxing of import duties for equipment and supplies. Farmers can collaborate and share use of big companies’ equipment and with the Global logistics and shipping industry as well as partnering with foreign sector giants, Agriculture can be made a major earner of foreign exchange as well as create employment and down stream industries just as in other Caribbean Countries. In some Countries Agriculture is the back bone of the economy and in Trinidad with fertile land and easy facilities for irrigation, this has been neglected.
With specialists among us we can implement projects which will grow bigger and better crops in shorter times and better yields. In conjunction with this there will be a push for local and foreign companies to be listed on TT Stock Exchange and foreign investors to trade. In recent years, agricultural production has been averaging just about 0.5 percent of GDP. Compare this to energy at 40 percent of GDP. We must do all that we can to expand agricultural production to reduce our reliance on imported food products. Food production must be made affordable and competitive. We must reverse the decline in agricultural production and create a strong, modern, prosperous and competitive agriculture sector. For too long Administration after Administration have talked about improving and building the agriculture sector but have done everything in reverse.
Security of land tenure will be accorded high priority and such lands will be delivered with access roads, drainage and irrigation systems. The Agricultural Development Bank will be adequately resourced to allow farmers readily-accessible credit.
Tourism has for over 50 years been non existent in Trinidad and Tobago. Because of the dependence of Oil and Gas, tourism has not been nurtured and has been dying a slow death.
Tourism can unleash vast opportunities which will play a critical role in driving economic diversification in the country. We will begin our thrust to drive the tourism sector through various, design, finance and build initiatives for the four coasts of Trinidad and Tobago. Through the stakeholders we will drive a tourism boom which will create employment as well as earn foreign exchange.
Our Tourism Growth Strategy will be led by leading management entities with a track record of developing tourism destinations across the world. To grow tourism we will make our immigration and customs process tourist friendly and quick. We will also be making Tobago a major import destination where products can be imported directly by container thereby ensuring hotels and other tourist related businesses receive product regularly and at a fair price. What something cost in Trinidad, it will also cost in Tobago.
We will create an enabling investment climate and commit to better infrastructure, improved signage, cleaner streets, communities and beaches, safer towns and villages, quality service and more value for money. Tourism has never been marketed as an income growth and foreign exchange earner for Trinidad and Tobago. Tourism has been left to fizzle on its own steam. We will market brand “Trinidad and Tobago” globally offering tourists the type of packages they want and with tourist sights such as the Pitch Lake, The Caroni Bird Sanctuary, Toco, Columbus Bay, Manzanilla and Maracas, The Nylon Pool and Buccoo Reef, Trinidad and Tobago has much more to offer than many other destinations.
Packaged and marketed properly Trinidad and Tobago can be a significant tourist destination with real earnings from Foreign Exchange. We will implement survey cards which will be given to tourists arriving and leaving who can rate the services and offer comments for betterment of our service to ensure first class service.
We are committed to the development of sport and youth. Sporting facilities across the country are ill maintained and sporting institutions lack staff and equipment. We will encourage private partnership in Sport Growth through tax breaks and incentives for businesses who play an integral part in developing sports in Trinidad and Tobago. This leads to personal and collective responsibility, especially for our young people.
We will put in place plans and programs as well as incentives to encourage as many citizens as possible to become involved in sport and in recreational activity. We will aim to be a world-class sporting nation. One of the keys of growing this talent is in keeping our youth on our shores. Too often the youth are migrating to other countries seeking betterment because of a lack of opportunities in Trinidad and Tobago. The ones left are the ones who can not go abroad and hence our pool of talent is slowly depleted.
We will establish a Sports Institute of Trinidad and Tobago mandated to modernize the sports industry with the ultimate objective of developing and promoting sports tourism. We will upgrade our existing facilities and make full use of our new infrastructure in cycling, tennis and swimming. We will make available sporting equipment through donations from corporate sponsors who in turn would get advertising rights at various venues.
SMALL AND MEDIUMSIZED BUSINESSES.
Our intention is to Assist small and medium sized businesses to acquire source funding from local or foreign private investors or governments. Small and medium-sized businesses have been generating a significant proportion of the employment creation in Trinidad and Tobago. We will look at T&T’s Labour Force Participation Rate, compromising economic output, needs improvement. Skills training for entrepreneurs on technical aspects of business as well as marketing strategies, product development, human resources, employee productivity and corporate governance would be a primary focus for building small and medium sized businesses.
We will consider removing surplus CEPEP labour and reallocating these to agriculture or other sectors. The state’s annual wage and salaries bill for this fiscal year was set at $10.6 billion, an increase of around $1 billion on the previous year’s. We would manage these increases in the wage bill moving forward by stimulating small and medium sized businesses. Businesses would partner with the Government to take over non essential services and the employees would be moved off of of the Governments Payroll onto private. As it stands now, the Government already needs to find additional resources on a monthly basis to meet this bill.
Prime Minister Dr Keith Rowley said there are 89,000 public servants on the central government’s payroll, including 39,000 civil servants, 13,000 member of the protective service and 16,000 teachers. The figure excludes local government and state-owned enterprises. Even so, it has been going up. In 2016, the central government employed some 76,000 workers while, in 2001, they totaled only 50,000. This is a significant increase which is not warranted and not substantiated however, no doubt motivated by the state padding in the labour market via the make work programs, employment in the period 1999 to 2016 in central and local government increased a whopping 64.6 per cent.
This will be rectified not through lay offs but through reallocation or hiring in the private sector. The state is now over-staffed, something which no administration is willing to admit and even if the state were to shed some workforce, total output in the central and local government sub-sector of the economy will not fall and indeed its average productivity will rise. The private sector will absorb the labour force shed by the state through our incentives such as reducing import propensity to below 50 per cent.
Our youth have been actively involved in the growth of small and medium sized business. They are empowered as they build small and medium-sized businesses increasingly utilizing information and communication technology; however, adequate financing, a pre-requisite for success is not easily available at the domestic financial institutions. We will strengthen and resource appropriately all state institutions which play roles in funding, training and developing markets for the small and medium enterprise sector. State institutions, such as National Enterprise Development Company Limited (NEDCO) will be resourced adequately to promote an entrepreneurial culture among the youth of our nation who have been traditionally denied access to funding. Business Leaders will be encouraged to offer scholarships to small businesses to help they as start ups and also in the growth of media sized businesses.
We will offer incentives for small business growth in IT technology and also offer loans at low interest rates for the establishment and growth of the sector. In 2008, a previous PNM administration had begun the process to establish a Trinidad and Tobago International Financial Centre as an integral part of its diversification strategy. The underlying rationale was that, given Trinidad and Tobago’s geographical location and its considerable strengths, the creation of an international financial centre linking North and South America was a desirable undertaking. The primary reason that this failed was due to the ever increasing crime situation and the hurdles of red tape which companies faced in doing business in Trinidad and Tobago. We will reverse this and encourage financial growth in Trinidad and Tobago.
Given our location outside the hurricane belt, we are well placed to establish a viable and robust maritime economy. This has never been developed nor maintained. We will partner with leaders in the Maritime Business to establish a world class facility offering docking and repairing of vessels both for personal and commercial use. These ventures will be financed by NGO’s and will not cost the Central Government but will generate revenue through fees and taxes collected.
The Chaguaramas cove is ill accessible by road and once there, it is obvious it is not maintained with the volume of garbage and debris present. Through our self help groups and the new and innovative recycling programs we will quickly and efficiently clean the entire area with a “money for recycled” project which we will roll out. We will encourage and initiate and keep operational a revitalization of this area and ensure that the climate is conducive for both tourism and Maritime docking. Government for too long have neglected its fleet and our initial step will be a Maritime Maintenance Facility to meet the maintenance requirements for the existing fleet of government-owned naval and maritime assets. Consecutive Administrations have ordered, cancelled and reordered vessels when there were adequate vessels for use in Trinidad and Tobago only requiring proper maintenance. Such a maintenance facility will catalyze the development of a ship-repair and ship-building industry beginning in the North-West peninsula. Many businesses have expressed interest in ship related industries however the climate has never been friendly for this. CL Marine, a subsidiary of CL Financial Limited, possesses the capacity to dry dock large vessels in excess of 200 tonnes, this will be revitalized to ensure that efficient processes can be provided and this would earn significant foreign exchange and provide jobs. Previous administrations have been kicking the CL Financial issue around like there preverbal football and we will finalize and close this matter once and for all. We will utilize a Public-Private Partnership to make the necessary investments to create a ship-building and ship-repair industry with the potential to generate high-skilled quality jobs.
INFORMATION AND COMMUNICATION TECHNOLOGY.
Trinidad and Tobago has lagged behind the rest of the world in this area and this is primarily due to the lack of vision of previous administrations who have always had to play catch up. Because of a lack of qualified individuals at the helm in this area they have never made the necessary investments which they could repay today. India has made investments in these areas and is now poised to be number 1 in IT worldwide taking over Silicone Valley in the USA.
Trinidad and Tobago has people with high intellect in IT and have had to migrate overseas because of the lack of facilities in Trinidad and Tobago. This area is of utmost importance to be have a first-world information technology network since this will need to be a critical part of the Trinidad and Tobago International Financial Centre. High speed Fibre Optic technology and facilities to facilitate electric cars and LiFi capabilities with free internet connectivity across the islands is now a far fetched idea. Opening up the market to competitors for internet, wired and wireless and telecommunication will bring Trinidad and Tobago into the first world status.
This will represent a central pillar for driving economic and social development. We cannot improve our productive capacity and create a vibrant and competitive economy without a nationwide network - the centerpiece for creating a knowledge-based and innovative society. Companies such as Google who are already offering internet services across Africa to remote areas through cloud internet, similar to GPS would easily make connectivity across Trinidad and Tobago a reality. All schools will be internet connected with specific IP blockage to limit the undesirable web sites infiltrating school premises. Internet speeds in Trinidad and Tobago lag behind offering only speeds in Mega Bytes when in First World Countries they are offeed in Giga Bytes. Reduction in crime represents the foremost demand by our citizenry.
Violent crime and criminality have hampered our economic progress. Our institutions have been weakened. Our citizens have become disillusioned and our business sector has developed an unhealthy malaise with respect to new investments and confidence in the economy. Our foreign direct investment flows have been affected. A review of the systems, equipment and processes will be undertaken. Internet connectivity across all of these networks will allow the systems to work seamlessly as well as offer the public information at their fingertips. Gone should be the days of going to offices to line up for documentation or to pay bills. As a general principle, safe and secure borders are central for containing crime and violence brought about by our location as a major transshipment channel for illegal drugs and weapons.
CRIME AND NATIONAL SECURITY.
A major component in our architecture for combating crime is to attack the source. Rather than target the small criminal whose incarceration will have a minimal impact on the overall crime, we will look specifically at white collar crime and the importers, distributors and harborers of drugs. Through this method, the stem of guns and drugs will be arrested and the criminals who observe the impunity with with those in the upper echelon work will think twice about getting engaged in criminal activity.
We will rebuild the security architecture which will be adequate to the requirements of our country. A new and improved Police Force including and inculcating international specialist will supplement the existing Police Force. We will introduce legislation to amend the present procedures for the appointment of a Police Commissioner and his deputies. We will cut the Budget to The Ministry of National Security and will start ensuring that laws are implemented. Trinidad and Tobago has no shortage of laws, the problem is implementation. Too often on main thoroughfares, we see drivers parking recklessly or stopping unannounced. Through prudent management the revenue that will be derived from fines imposed will easily make up the shortfall of the budget.
We will also implement systems such as in the USA and UK where officers are rewarded for effective policing. Regional Corporations will develop partnerships with the Police Service through an inter-agency approach to combat crime. This mechanism will be anchored on community safety partnerships within the local government arena and in particular, Police Officers will be trained with expertise in conducting policing at the community level, establishing the trust and respect that is required for effective policing. They would adhere strictly to their motto “To Protect and Serve”.
We will provide an efficient and legitimate foundation for crime prevention, law enforcement and the reduction of repeat offenders. Prison management will be strengthened with focus on prison officer security, security management, health services and the rehabilitation of offenders. Crime suppression will stop at the head and we will not tolerate even the perception of wrong doing at the top, since perception becomes reality and affects the credibility of the government. Past Administrations have operated with impunity when wrong doing is observed or discovered and their statement is “if you have evidence bring it to the police”.
We intend to stop this behaviors and any perception of wrong doing will be dealt with swiftly and without favor. The Security services will be called upon to work with the highest integrity and any concern of impropriety can be brought directly to Ministry of National Security through a department especially to deal with such complaints.
We will obtain a GATE formula that explicitly factors in the demographic transition at work in the economy. The GATE program is an important program for many students wanting to enter the University stage of their education. Through our increase wage formula, well paying jobs will be available for those graduating University and through our GATE loan program they will be able to easily repay any funding advanced to them. Our intervention in early life through large scale investments in Early Childhood Care and Education Centers and through primary and secondary schools represent a first step in climbing the ladder of social mobility.
We will work with councillors to initiate community programs for sports and other youth development activities such as fairs and tournaments. Through these activities, youth will not be prone to crime and will not be idle and will feel the warmth of camaraderie and involvement as Human capital development has been at the heart of the preparation of our young people for the challenging world of science, technology and industry. The Government Assistance for Tuition Expenses Program (GATE) and the Higher Education Loan Program (HELP), have ensured that our disadvantaged, vulnerable and low-income groups were able to participate in this life-long learning experience. We will ensure these are implemented again and will partner with business who will offer scholarships, grants and loans to University Students who will they have a work to repay system creating a win win situation for the student and the business owner. We will preserve, maintain and expand where necessary, our free system of education at all levels. We will fully integrate sports, culture, language arts and physical education into the education system.
SOCIAL SECTOR POLICIES.
Enhancing citizens to cherish their communities and have personal responsibility as well as volunteerism in our society is an important aspect of Trinidad and Tobago. We will continue to offer Social Services such as The Old Age Pension and Food Cards to those in need and to also ensure that those who are most needy are not left out. We will create out reach programs which will go into communities to teach effective time and financial management and to help home businesses so they can get off of social assistance. Our Community programs will be funded through businesses in the community with various activities from the very young to the elderly in the community.
HEATH AND HEALTHCARE.
We will encourage private sector investment in targeted industries such as in the Health Care Sector. The delivery of healthcare to the national community represents a critical element in the building of a fair and inclusive society. Past administrations have neglected the local health facilities and hospitals while the same Minister of Health has a lucrative and fully operational facility. This shows that obviously they may have the capability to run a proper health care system but just choose not to put the same effort into the Government institutions. Our public health facilities, with deteriorating infrastructure, are not patient-friendly and with acute shortages of medical personnel the patient experience leaves much to be desired. Our goal is to establish universal health coverage for the national community. Our citizens will receive in Trinidad and Tobago, as other citizens in advanced countries, the best standards of care and accountability by medical professionals. The Children’s Life Fund will be Brough fully on stream from support from local partners and government oversight to ensure those in need have the funds available when needed.
Housing in Trinidad and Tobago has always been a country with a shortage of homes. The wait list has been years long with people having thousands of applicants ahead of them. Friends and family have been able to easily and quickly acquire government housing while the population laments in hopes off being able to own their own home. We intend to partner with local contractors to meet the mandate and to ensure everyone is able to get a home. We will expand and strengthen the programs which were established and which still exist. Through a fair and equitable policy every person will have an equal opportunity of owning their own home. With our accelerated building program we will quickly clear the back log and ensure every person wanting a home can have one. At the centre of our policy framework and in order to facilitate purchase of homes we will continue to subsidize mortgage loans at the low interest rates. The poor and indigent will be facilitated with targeted home repair and home improvement grants and conditional cash supports. Our major cities and towns, especially those in the East-West Corridor are decaying. We will restore those towns and cities and create new ones through targeted housing construction, in particular in the urban areas. Port of Spain, Arima and Point Fortin will be targeted as well as new growth areas such as Maracas, Wallerfield, La Brea, Princes Town, Rio Claro, Mayaro, Cedros and Chaguanas, among others.
ARTS AND CULTURE.
We intend to stimulate investment in avenues that don’t require significant Government expenditure but can increase revenue streams, exports and forex. Trinidad and Tobago with its cosmopolitan society has a vast diversity in the Arts and Culture. With the wealth of talent in Trinidad and Tobago, areas such a Carnival, The Steel Band and Cultural Activities and including the Arts will attract Foreign Exchange. CEPEP and URP expenditure will be reallocated to capital expenditure. The work force will be merged into programs for youth agriculture apprenticeship, cocoa rehabilitation, new tourism initiatives, agricultural development, cultural activities, culture and the arts. We will leverage our rich cultural, historical, religious and natural heritage for developing tourism with associated job creation activity. We will encourage all local cultures. We will create a national local enterprise with the support of the entire country which will identify the benefits: value creation, income and employment generation, goods and services production, innovation and creativity. Artistes, media operators, film-makers and other participants in the creative industries will access first-class facilities to showcase their talent with world-class standards. Arts, fashion design, culture and tourism will become major drivers of productivity and growth in our country.
SOCIAL SAFETY NET.
Our pursuit of a fair and inclusive society with social mobility and personal responsibility will be an objective of an OIC Administration. By international standards, we have had limited success with the programs and policies designed to protect the disadvantaged and the most vulnerable in the society. We rate very poorly in this area and an OIC government intends to ensure that the Social Safety Net is up to international standards. We will ensure that these programs remain effective and relevant. We will review our social sector programs in consultation with civil society to ensure that they are channeled to those who need them the most.
PEOPLE WITH DISABILITIES.
People with disabilities are consistently constrained from participating in and benefiting from our growing economy. For too long people with disabilities have been sidelines and accessibility has been lacking, simple day to day activities such as going to the bank or the grocery store can be a humongous task for someone with a disability. The OIC Government will mandate businesses and institutions to become user friendly for persons with disabilities. We will create a more inclusive society for persons with disabilities. They will enjoy equal opportunities through an empowered life with dignity. We will undertake substantive action to meet our obligations under the relevant conventions approved by the United Nations. We will mandate the various Ministries to give equal opportunity hiring to people with disabilities. In consultation with people with disabilities, we will immediately undertake a review of all projects and services directed to the community. As a person with a disability, one will qualify for certain tax deductions, income exclusions, and credits.
REVENUE AUTHORITY AND PROPERTY TAXES.
Income Tax in Trinidad and Tobago is and always has been an issue since there are many who can not account for their wealth or who live beyond their means yet they pay little or no taxes. Through a more modern and effective tax regime, the OIC will be able to recover billions in uncollected revenue. Revenue administrations must be effective and fair in the collection of taxes. They build trust between Government and the citizens. Those employed always pay their fair share of taxes yet wealth business people and corporations evade taxes through various loop holes or methods. We will close these loopholes and go after those who declare little or no income yet appear to be living beyond their means. Revenue administrations through which the tax collection activities of both the Customs and Excise and the Inland Revenue are merged and are well established in advanced, emerging and developing countries. We will ensure our system is modernized and operating in an effective manner. A Revenue Authority properly run would enhance tax administration and generate additional revenue and jobs estimated at 6.0 percent of GDP, or an additional $9.90 billion. In addition, an equitable, fair and transparent property tax regime will be implemented and collected by Local Government Agencies and used in communities so tax payers will see their tax dollars at work.
Proper statistics and data have not been at the fore front of any past administration primarily because there is so much inherent corruption in the system that many citizens and institutions do not disclose true number or any numbers at all. It cannot be disputed that our Central Statistical Office has been severely neglected for decades and even more so in the last five years. INSTITUTIONAL STRENGTHENING The international rating agencies and the multilateral lending institutions have all commented on the paucity of accurate statistical data in Trinidad and Tobago. In fact, Moody’s Investor Services cited poor statistical data as one of the reasons for the downgrade of our country’s credit rating under the previous Government. It goes without saying that it is virtually impossible to derive informed policy decisions without accurate statistical data. In recent years there has been a lot of skepticism on the authenticity of the statistics produced. This has led to a loss of confidence both domestically and internationally in the analyses and issuance of various social and economic data.
GENERAL ACCOUNTING OFFICE.
With constrained revenues accruing to the country over the medium-term, the expenditure must be focused to achieve maximum efficiency. In years gone by, administrations have consistently operated without regard for the General Accounting Office. Although improprieties have been found time and time again, little or nothing is done to rectify it. For this reason, we propose to ensure a General Accounting Office which will be an independent office of Parliament. This Office will maintain a continuous real-time assessment of actual budget performance identifying in the process, divergences which require public attention. A good starting point for the reform of state expenditure therefore would be to review the additional $13.4 billion on transfers and subsidies spent between 2007 and 2016, although the level of nominal GDP was basically the same in both years. Through this we will identify where pilferage or mismanagement occurred and look to recuperate those finds squandered through mismanagement. A line by line approach would have to be taken. Transfers and subsidies rose to approximately 51 per cent of government expenditure, accounting for the entire increase in government revenues during that time”.
This particular area has been one that has required reevaluation for decades however no administration has been willing to tackle this. Institutions such as PURE run under the Ministry of Works have been hemorrhaging funds in projects which have excessive cost over runs and projects which give little value for money.
All the while contractors and those running this department have been seen to be acquiring unexplained wealth. We intend to take a serious look at this department and overall. All the procurement procedures presently in place which allows for widespread corruption. Allegations of corruption, theft, waste and squander of public funds in the award of public sector contracts reached a crescendo in Trinidad and Tobago in 2015 however has been functioning freely through each and every administration.
Unaccounted wealth of Ministers, over priced payments to contractors and the such have been allowed to go unabated administration after administration. This contributed in no small way to the downfall of most of the previous Governments. Previous administrations talk loudly about procurement; but true to form, all end their tenure without putting new and modern systems of procurement into place.
This OIC Administration will cut out this cancer of corruption and waste as we will fulfill our commitment to the people of Trinidad and Tobago to implement a modern, transparent and fair public procurement system in 2018. The tendering process has allowed contractors to manipulate the bidding and qualification by incentives returned back to those in high office or Administrators in the County Councils or Regional Corporations. The process of identifying these are simple since it would only warrant looking at their life style of them and their families.
Procurement processes must be fair and transparent and return value for money. Too often contractors are able to manipulate the system through variation in the contracts and over runs approved by the government offices particularly placed to scrutinize these cost over runs. In addition we will look closely at contractors who perform work for the government but who evade paying government taxes in the form of NIS and PAYE even thought these are with held from workers salaries. Over the years these have amounted too billions of dollars which remain unpaid and uncollected because of government neglect and lack of concern.
ECONOMIC AND FINANCIAL MANAGEMENT.
In our quest to prudent Management we will survey the top 20 most successful non-energy firms. We will profile how they overcame exporting obstacles and implement their successes, We will examine exports’ structure to locate popular-demand goods and assess sectors for which demand for imports by the trade partner is rising but T&T exports to that market is falling and compare ease of doing business in T&T to C.A.R.I.C.O.M. partners and implement a team to move T&T to top spot within C.A.R.I.C.O.M. in a year.
We will look at past and present instances that do not necessarily make good business sense, instances such as the recent sale of TSTT and the sale of the Methanol Plants by the Panday Administration to bypass the tendering process to construct the Piarco Airport are but a few instances. Our policy makers must determine whether in the medium term the current account balance will improve and whether the focus should be on the overall balance or non-energy balance. As we move to restore morality and ethical behavior in public affairs, we will at the same time create the conditions for reviving growth and putting the economy on a sustainable and higher growth path. No Minister in an OIC Government will be an a Ministry that he does not hold qualifications to be in. Similarly on State Boards, those appointed will be qualified and bring value to the institution. To facilitate this process in a long-term framework we will re-task the Economic Development Board with key mandates:
to develop and maintain dialogue with Government, the private sector and the labour movement with a view to establishing long-term economic and social goals for the economy; and
to develop and maintain an economic and financial plan with alternative financial and investment scenarios in a long-term framework.
PUBLIC SECTOR INVESTMENT PROGRAM.
Our capital investment program for fiscal 2017 has been reduced to $7.0 billion or by 14.2 percent from fiscal 2016 in the exercise of our commitment to fiscal prudence. We have re-prioritized, refocused and, where necessary, consolidated public investment expenditures towards those areas and activities which will begin to reverse the conditions of economic stagnation experienced over the past five years. Governments of the past have used funds for capital expenses which brings no revenues back to the government. We will use funds wisely towards investments and ensure that through these investments we will have a positive cash flow stream and then use these streams for capital expenditure.
Prudent financial management dictates this is the best method to build an economy. Past Administrations have been trying to run an economy likened to living off of credit cards, all it does is dig a bigger and bigger hole and eventually it has to be repaid. We will build on the intrinsic strengths of the economy; we will create the most value in terms of benefits for the population; we will lay a solid foundation for achieving economic and social transformation. Administrations of the past have made no real investments into the public sector and as a result have depended year upon year on oil revenues which have been dwindling, by diversifying away from oil and gas will give Trinidad and Tobago a sounder and better base to grow the economy. In particular we will prioritize:
ongoing projects which are expected to be completed or significantly advanced in 2018; and
loan-funded projects and projects with contractual obligations.
PUBLI C -PRIVATE - PARTNERSHIPS.
One of the primary means to raise needed capital will be to offer on the open market a 50% share in real estate owned by the state in an S.P.V with a rent to own arrangement. This will be in the form of bonds and once offered will be quickly taken especially by financial institutions who presently have excess liquidity. This will raise 2 to 3 billion.
Public-Private-Partnerships have evolved in both advanced and developing countries as a robust approach for the delivery of infrastructure services and for catalyzing growth and development. Trinidad and Tobago is already utilizing public-private-partnerships to deliver public infrastructure services in some areas of the economy, including health, education and ICT however these are badly mis managed and not profitable, we will re-examine these and bring them up to profitable standards. Modern and strategically-planned transportation is essential for the future of Trinidad and Tobago. Traffic gridlock is one of the most serious problems in Trinidad and Tobago today, and among other things, in order to resolve this problem, we plan to prepare a strategic plan to better use the existing roadways and curb line cutters and illegal parking to create a free smooth flow of traffic.
One of the primary problems with the traffic problems in the cities is the poorly routed main traffic streams as well as localizing too many governmental offices where there is a lack of parking. Through prudent organization this will be solved. We believe that transit times in Trinidad and Tobago should be reasonable, comfortable and safe. In addition we will be looking at how
we will construct a new and modern fishing port at Moruga;
a modern Motor Vehicle Authority will facilitate effective and safe usage of the nation’s roadways and highways;
sea and air transport facilities, including the modernization of the Piarco International Airport and in collaboration with the Tobago House of Assembly,
the construction a new modern Airport Terminal at Crown Point in Tobago;
new fast ferries providing adequate levels of service between Trinidad and Tobago;
a new container Port Tobago to handle international cargo.
Our road network will open economic space in Trinidad and Tobago providing in the process much-needed connectivity among communities, in particular rural communities. We will set in motion the economic and social forces to build those communities. Policy formulation and direction will be unified under one Ministry to ensure that there is co-ordination of plans, programs and infrastructure within our rural communities.
We will revamp and institute better management principles for the Local Government framework. In this framework, regional and municipal corporations will be given appropriate autonomy through the amendment of the Municipal Corporation Act and will develop and implement their own regional plans. They will do so in a similar manner as the Tobago House of Assembly. We will give them the framework to set in motion a modernized and efficient system of revenue collection and distribution into the communities. These initiatives will be implemented within the framework of national policy. These bodies will have a dedicated source of funding, provided by the Government. We will partner with various stakeholders to promote environmental awareness throughout the nation, particularly among our young people, especially in rural communities. Businesses in local communities will be integrated and asked for their input in developing traffic management plans as well as growth avenues in these communities.
FOREIGN EXCHANGE MARKET.
The Foreign Exchange market in Trinidad and Tobago is in a chaotic situation. Our primary source of foreign exchange is gas and oil. The Balance of our exports are minimal and as a result we suffer from a lack of foreign exchange in the market.
There has been a chronic gas shortage for literally the last decade and this situation will not improve. As a result Natural Gas has has a downstream effect on plants in The Pt. Lisas Industrial Estate being starved for this raw material. As a result our Foreign Exchange earning capability has been severely hindered. Literally everything in Trinidad and Tobago is based on the US dollar except salaries, for this reason practically everything in Trinidad and Tobago is out of reach of the average citizen. In conjunction with our wage increase we are prepared to restate the TT to US exchange rate a 5.0 to one there by bringing the price of products down. With our wage adjustment and this exchange rate, the same products that people in The UK, The USA and Canada can afford will be affordable in Trinidad and Tobago.
People will be able to afford new cars, luxury vehicles will no longer be only for politicians or big businessmen. Just as in the first world countries where the factory worker can afford a BMW or AUDI so too in Trinidad and Tobago this will be possible. The only reason for a sliding foreign exchange being beneficial to the government is that it allows the public service salaries to be paid but the salary the public service receives is not enough to live on. When a new motor vehicle is imported costing $20,000 USD and taxes making it cost $60,000 USD how can a citizen earning $500 to $1,000 USD per month ever expect to afford this. This must change and the economy must be equitable and fair for all. Rebuilding confidence in the management of the foreign exchange market represents a central thrust as we revitalize our national economy.
The current situation is untenable and has contributed to great uncertainty and capital flight. Presently there exists a severe shortage of foreign exchange and the primary reason is simple, the country earns very little foreign exchange. Movement away from Gas and Oil will solve this problem as we move towards an export driven market of agriculture and manufactured goods. This coupled with a vibrant and thriving tourism economy will generate the foreign exchange to keep the rate fixed at 5.0 to 1 was well as allow the country to have a surplus of foreign exchange. As a Government, we will be committed to ensuring an adequate and efficient supply of foreign exchange to our manufacturers and importers and to the citizenry at large and we also intend to take the necessary steps to protect our exchange rate from external pressures. Through our concentration on locally produced and manufactured products we will also see our trade deficit decrease and also our need for foreign exchange decrease. The only products we may need to import would be products which are not manufactured or can not be manufactured in Trinidad and Tobago.
Of Primary importance is Constitutional Reform and this is one of the main pieces of legislation that we will bring to Parliament to have past. Administration before have always talked about this while in opposition however when in government have no motivation to enact it. The main reason is that they come into office with promises of greatness however once in office renew on practically all promises and loose favor with voters.
Obviously with Constitutional reform they would quickly and definitely be voted out. With the present first past the post system they are able to play musical chairs with each other being in government and out and back in again. A government of the OIC need not worry about this since we govern for the people and would win each time by landslide.
We intend to revisit the Insurance Bill and the Credit Union Bill which are vital to promoting good governance in the financial sector. We will also review other pieces of legislation, including the Securities Exchange Commission, the Financial Intelligence Unit and the Central Bank Act to align them with international best practice.
Tobago being abundant in Flora and Fauna has not been able to use the full potential it has for tourism and the OIC acknowledges this and intents to change it. Consistent with the provisions of the Tobago House of Assembly Act, the required budget documentation will be discussed with the Assembly in order to ensure Tobago receives the funding and the support for infrastructure as needed to ensure the island can develop its tourism base.
The Infrastructure development will be through Public _ Private Partnership to bring a state of the art cruise ship complex as well as five star hotels to the shore of Tobago. The development needs of Tobago will take into consideration the Tobago Comprehensive Development Plan, developed by the Assembly, which sets out a road map for the development of the island. Among other things, the Plan will ensure that: Trinidad and Tobago is put on a footing so that the tourism sector becomes an important driver in the engine of growth in the national economy.
This is an important factor in foreign exchange earnings for the Government. Strong and effective public private sector partnerships will be encouraged to deliver infrastructure and infrastructure services, we will particularly look at bringing in investors with a finance, design, build concept for rapid growth, with a view in particular of expanding the stock of hotel rooms in Tobago; with tourism and transportation being closely linked, we intend to modernize the A.N.R. Robinson International Airport overall for cargo and passenger services. The air and sea transport system will be upgraded, through licensing of third party air and sea transportation companies to ensure reliable and regular transit between the islands.
Our plans for economic diversification will be through the negotiations and procurement of anchor tenants at the Cove Eco-Industrial and Business Park; industrial activities at the Cove and other parts of Tobago will be supported by a new international cargo port; potential businesses willing to avail leases at the Cove Eco-Industrial and Business Park will be offered incentives for those with “green” energy and Zero Carbon footprint plans.
Housing in Tobago has been neglected administration after administration and through partnerships with local contractors specifically in pre-fabricated low cost housing we will accelerate and efficiently make housing affordable and available to all residents in Tobago.
Schools and Educational Facilities will be properly outfitted and educational infrastructure will be upgraded;
Over 2018-2021 we will work with private sector to push activity in export manufacturing, tourism, housing, maritime services, agriculture, financial services and creative industries in Tobago.
ESTIMATES OF REVENUE AND EXPENDITURE.
For fiscal year 2016 the budgetary allocation for the Tobago House of Assembly was $2.772 billion, of which $2.345 billion was for the recurrent expenditure, $404.0 million for capital expenditure and $23.0 million for the Unemployment Relief Program. This budgetary allocation of $2.772 billion was equivalent to 4.4 percent of the National Budget. This will be revised in 2017-2018 to the amount set out by the Dispute Resolution. We will work with The Tobago House of Assembly to ensure that their budget is properly allocated and used efficiently.
There is no doubt that the Trinidad and Tobago economy needs to embark on a program of economic adjustment so as to set the stage for sustained growth over the medium term however, this should not be at the expense of the citizens but burdening them with undue hardships. We will bring the government finances into balance by fiscal year 2018.
It must be emphasized that public expenditure rose considerably over the last eight years from $46.7 billion in 2010 to $62.0 billion for fiscal year 2015 and continuously higher in 2016 and 2017. The majority of this expenditure was accounted for by increased personnel expenditure, unsustainable transfers and subsidies and unbridled capital expenditure.
Every Administration have concentrated on expensive road works and un-wanted expenses mounting into the billions of dollars with the only benefits going to the wealthy and contractors who are awarded these contracts most times having excessive over runs through spurious variations in the contracts which again only go into the pockets of financiers and friends of the government.
In the interim, to ensure that the appropriate fiscal stimulus is maintained, the Government proposes to undertake the necessary adjustments to achieve at minimum a fiscal balance by fiscal year 2018. In so doing, we have sought to minimize the burden of adjustment across all sectors, in order to close the billion dollar gap between current revenue and expenditure in 2017.
In the coming fiscal year we plan to generate a surplus of $2.69 billion or 1.52 percent of GDP. To bring our accounts into balance, we will mobilize additional revenue equivalent to $23.1 billion or 13.8 percent of GDP. To achieve this we will:
Use resources to procure and effectively manage investments and growth conduits to supplement the income stream of the country. In July 2008 Oil was priced at $145 USD a barrel, gas at $13.00 USD per mmBTu. The expenditure was 53 Billion with a surplus of 3 Billion and a Balance of Trade of 56 Billion. In 2017 The Balance of Trade was only 5.7 Billion;
Ensure that there is a proper conduit for enhanced tax collection and compliance;
Increase wages thereby increasing contributions via PAYE systems and other collection mechanisms through because of economic growth.
Revise the Property Tax regime with a fairer and equitable formula;
These taxation measures are estimated to yield an additional $15.2 billion and reduce expenditure by $1.440.0 billion by commencing the Investment process. They will be supplemented by a sale of assets program and the receipt of extra-ordinary dividends projected to yield a further $15.9 billion, including:
Proceeds from the Initial Public Offer of Real estate held by The Government of Trinidad and Tobago, with through an SPV with a rent to own back to the government clause. Also included would be;
capital repayment from Trinidad Generation Unlimited; and
dividends from the National Gas Company.
We are projecting:
Total revenue : $38.02 billion, this is taking into account carried forward losses which the energy companies utilize against their balance sheet this making the revenue stated by the Finance Minister of 47.41 Billion unrealistic.
Oil revenue : $1.39 billion, we anticipate the oil companies will also carry forward losses and also use other methods to reduce revenue paid to the government.
Non-oil revenue : $36.63 billion
Total expenditure net of capital repayments and sinking fund contributions : $35.33 billion
Budget Surplus 2.69 billion.
We are balancing the need to ensure that the economy has sufficient stimulus for revival with the need for restoring discipline in the medium-term fiscal framework. This is a challenge in the context of the relatively low oil and gas prices as well as the current stagnation in our economic growth. I propose to set in motion the achievement of a sustainable fiscal balance.
We must move away from gas and oil as our foundation for growth and use realistic and prudent management concepts. Through tourism we will move employment into the service industry. The most important group of service industries consists of government and personal services such as education, health care, and banking.
Manufactured products like automobiles, airplanes, iron, and steel are becoming increasingly important, and much of them are exported, while Trinidad and Tobago may not be able to undertake large manufacturing, downstream industries to supply ancillary products is an open market. With the open world economy today, seldom is any large manufacturing undertaken without parts and services from countries across the world.
The strong manufacturing sector is an important contributor to increasing GDP - this is one of the most important factors that will allow Trinidad and Tobago to make significant economic gains in the coming years. Finally, agriculture should account for 5 to 10 percent of Trinidad and Tobago’s economic output. Crops such as Sugar Cane, Cacao, Bananas, and Citrus Fruits are easily cultivated and can grown the economy and earn foreign exchange
• National Security : $6.81 billion
• Education and Training : $5.763 billion
• Health : $3.088 billion
• Public Utilities : $1.234 billion
• Works and Transport : $1.915 billion
• Housing : $1.663 billion
• Rural Development and Local Government.: $1.563 billion
• Agriculture : $1.831 billion
PERSONAL DEDUCTIONS FROM ANNUAL EMOLUMENT INCOME.
I propose to provide relief to working families by increasing the personal income tax exemption limit to $80,000. All taxpayers earning $9,000 a month or less will now be exempt from tax and will not be required to file tax returns. This will put additional income into the pockets of these individuals by reducing personal tax revenue by $140.0 million. This measure will take effect on January 1, 2018. It is noteworthy that as of January 1st, 2018 we will introduce the wage equalization formula which will bring wages of the average working individual up to international standards.
This formula will see those at the bottom of the employment scale seeing a minimum wage of $36.56 cents per hour and those at the top of the scale seeing a 3% increase in wages. A present day worker earning $500 per week will see their wage increase to $1,600.00 per week.
A present day worker earning $1000.00 per week will see their wage increase to $2,600.00 per week while a present day worker earning $20,000.00 per week will see an increase in wage to $25,800.00 per week.
This will level the playing field and rebuild a middle and upper middle class while lifting most families out of poverty. The increases at the top are minimal while the increases at the bottom are more drastic.
This move alone will see earnings for the government in the form of PAYE contributions and NIS contributions increase by a fact of 3 fold and will contribute to the revenue earned without burdening the citizens.
BUSINESS FUND LEVY.
Business Fund Levy will be reverted to 0.2 percent per quarter, and will allow businesses to use capital to grow and expand, The previous increase from 0.2 percent to 0.6 percent per quarter yielded only $327.5 million which had minimal impact on the economy.
GREEN FUND LEVY.
The Green Fund Levy will be reverted back to 0.1 percent per quarter from 0.3 percent per quarter. The .3 percent Green Fund Levy in no way helped business to grow and contributed minimally to the economy while placing undue burden on the business community.
VALUE ADDED TAXES.
It is our intention to remove the VALUE ADDED TAX across the board since this has been a burden placed on the citizens since the NAR Administration in the late 80’s. This was meant as a temporary measure however was left in place administration after administration. In many instances businesses have been evading this tax by under pricing products or selling without VALUE ADDED TAX.
The removal of this tax will have.
Direct causality of reducing prices by 15% and with more efficient tax collection it will easily be collected though additional corporation taxes.
The VALUE ADDED TAX has increased prices for all citizens and have realized no real value for money. Through our prudent management of the governments finances we expect this removal to have a negligible impact on out economy. When we have projects budgeted at 200 million but costing 1.2 billion, Simply cutting out the waste and corruption will show that there is no need for this tax.
THE TRINIDAD AND TOBAGO REVENUE AUTHORITY.
The Trinidad and Tobago Revenue Authority will be streamlines and efficiently operated thereby ensuring all tax evaders and those owing back taxes will be dealt with swiftly and with a result oriented mandate. For too long friends and financiers of previous administrations have not paid their fair share of taxes and not being held accountable. Through our FIU Inspectors, business and private dwelling homes will be examined and owners tax returns examined to determine source of wealth. In instances where source of wealth can not be explained the revenue authority will state the potential income required to maintain a specific lifestyle and the burden will be on the tax payer to prove otherwise.
The Property Tax will be streamlined to be fairer and more equitable to those who can afford to pay the tax. It will be introduced in a phased scheme so that increases if any will be gradual and easily accepted by the tax paying public. We will take steps to amend certain legislative provisions, including the determination of rates, and implement the existing Property Tax Act 2009 with a view to having a fair and equitable property tax regime in place by January 1, 2018, using the old levels and old rates as a starting point.
The PNM administration has had a history of increasing fuel prices in every budget they present by consistently removing the fuel subsidy. The Crude Oil of Trinidad and Tobago belongs to the People of Trinidad and Tobago yet Trinidad and Tobago is one of the countries of the world with some of the highest fuel prices.
It is our intention to increase the fuel subsidy and bring the prices of Super Gasoline down to $1.25 per Liter and Diesel Fuel to $0.75 per liter.
Although the Government will see increased costs in the fuel subsidy, we will see significant increases in taxes as business grow and spending increases. The purpose of this budget is to make the standard of living better for all citizens and not to increase their stress through higher and less affordable prices.
We shall have tools in place for smuggling and black-market activities with hefty fines and jail terms for any individual or business found to be involved in these activities. All petroleum fuel products in Trinidad and Tobago are heavily subsidized. The price subsidy has been a deliberate policy of the Government since 1974, with the passing of the Petroleum Production Levy and Subsidy Act. The Act set up a mechanism for the collection of a production levy from producing companies and the payment of a subsidy to wholesaler (NP) to compensate for selling products to consumers at the fixed retail prices.
While Trinidad & Tobago has increased the controlled prices of transport fuels, there has not yet been any move to dismantle the price control mechanism and to allow the prices of transport fuels to be set by the market, rather than government decisions.
The OIC will change this policy and allow retailers to set their own prices With the concentration being on the current price increase, this point about moving to a fully liberalized system must be entered into the public discourse. With the petroleum production levy act in place the removal of the subsidy by The Minister of Finance may in fact be illegal since the government many not be allowed to collect the levy if there is no subsidy yet the government continues to collect the levy.
The subsidy on petroleum products such as gasoline and diesel has its basis in the Petroleum Production Subsidy and Levy Act of 1974 which aims, among other things, to shield the population from the vagaries of international oil prices. This policy came about following the quadrupling of oil prices from 1973 to 1974 on account of the Yom Kippur War and the consequent Arab oil embargo of Western countries.
NIS AND OLD AGE PENSIONS.
We will revisit the NIS and Old Age Pension matter as a priority and with the assistance of all stakeholders including the Trade Union Movement and the financial community, we will develop a fair, equitable, modern and sustainable pension system for the public sector. Pensioners and those drawing NIS will see significant increases to keep up with the cost of living. Our old and aged citizens have given their life working for their country and at their late years they should not be held to live in poverty.
The harsh reality of aging, though, is that most older people do not enjoy good health, nor do they have incomes that allow them to lead reasonably comfortable lives. I would hazard a guess that 50 per cent of persons older than 60 are stricken with ill health and depend only on pensions for survival. The more fortunate among them are retirees from the public services or private enterprise who enjoy work-related pensions of $5,000 a month or more, and National Insurance pensions, recently upgraded to $3,000 a month. In both instances they would have contributed to pension schemes all their working lives. A small percentage of retirees would have privately funded annuities to bolster their benefits. The OIC Government will bring the old age pension in line with inflation to ensure equity.
With the increases across the board Public Servants will see a marked increase in their take home income. With this we expect to have a public service where customer service is the priority and we will immediately implement survey tickets where members of the public can comment anonymously on the service they received. Public Servants will be evaluated on this with the intention of having a high standard of service and improving where their are deficits. In instances where the public is made to pay fixers or bribes to have anything done, they can report this anonymously and it will be dealt with efficiently and quickly.
Every citizen of the country deserves the same high standard of service. Government Officials will also no longer be given tax free concessions on new and imported vehicles and will be required to any taxes which are due and payable. This will be retroactive to 2008 when it was instituted. Many Ministers have purchased such vehicles for friends and families or have sold them for huge profits after leaving office. The first owner on the certified copy would be responsible for repaying the sums to the treasury with interest from the date of importation.
ON THE JOB TRAINING PROGRAM.
We will ensure that our young people entering the job market are appropriately compensated. To assist our youth, I propose to increase by 50 percent the stipends now paid under the On the Job Training (OJT) Program. This measure will cost an additional $75.0 million and will take effect on December 1, 2017. Our experienced training specialists will implement and institute all phases of creation and execution of a structured OJT program that is custom-tailored for Trinidad and Tobago. We will provide complete OJT program development services including job task analysis (JTA) and development of the OJT roadmap, lesson guides, job performance measures (JPMs), and the supporting job training reference materials. The OIC’s flexible and targeted approach allows The Government to collaborate with institutions to develop the program or outsource the entire effort to third parties.
We need to motivate the private sector to invest in the construction of public facilities, in particular car parks in urban areas, in order to generate employment and economic activity and to provide much needed public amenities. Through our programs and partnering with local companies we will increase the construction of housing, commercial and public facilities by private companies. The hinderance most companies have faced in the past are the Red Tape and EMA approvals which have been difficult and slow in being processed. We will remove these barriers for companies who wish to embark on such development and will offer either a rent to own guarantee by the government or an operate tax free for a specific term by the builder.
In either instance the government would be able to acquire the asset for minimal up front cost yet receive revenue from utilization or taxes derived from the projects.We will implement and Economic Development Transportation Fund which would be an incentive tool designed to alleviate transportation problems that adversely impact a specific company’s location or expansion decision. The award amount is based on the number of new and retained jobs and the eligible transportation project costs, up to $3 million. The award is made to the local government on behalf of a specific business for public transportation improvements.
Our objective for achieving food security and decreasing the reliability on imported food study will take a two fold approach. One would be to incentivize farmers and the second would be to protect local farmers by imposing duties on produce grown locally or manufactured locally. Farmers and Businesses would have access to grants for machinery and equipment and would be given special credit facilities for chemicals and seedlings.
We will exempt from all duties and taxes, inputs into the agricultural sector, including approved chemicals, pest control, approved vehicles, approved fishing vessels and equipment. These measures will take effect from January 1, 2018. Many new agricultural businesses will be able to avail generous research and development (R&D) incentive programs. Has your operation produced new or improved agriculture related products recently? Have you modified product formulations and/or growing processes to increase yields, reduce the reliance on chemicals, accelerate weight gain, or other improvements to the efficiency of your operation? If the answer is yes, then there is a strong chance that your agricultural company could benefit from an R&D Tax Credit that will be offered by the OIC administration.
The OIC will move to stimulate Urban Agriculture, Urban agriculture provides numerous benefits not only to those growing food, but also to the cities and counties in which it happens. City gardening and farming offers public benefits such as vibrant green spaces and recreation, education about fresh food and the effort it takes to produce it, ecological benefits for the city, sites that help build community, and a potential source of modest economic development.1
One of the primary complaints of the citizens if the length of time it takes a matter to come to trial or to be completed because of the back log and the process in itself. We will mandate our Minister of Justice to clear the back log of inconsequential cases and to ensure through consultation with the Law Association, processes are put in place to expire cases through the system. We will also implement online methods for payment traffic offenses and other fines there by unclogging the courts from these matters, We also intend to introduce Night Courts for minor offenses and traffic fines since this would be prudent use of facilities which are already available. We will also increase funding to the Director Of Public Prosecutions Office there by ensuring that capital crimes can be dealt with effectively and quickly with a resolution in the matter in the shortest time possible. Three key factors which we will look to have the judiciary implement to rapidly deal with cases which are in control of the judges would be
1. Have a docket control order or scheduling order, and stick to it as much as possible. If the court already sets a timeline for litigation and a certain date for trial, one must determine what is damaging the integrity of that order: Items such as too many continuances being granted and the order show a timeline based on current practices, or the best practices?
2. The Management of discovery. The process of information exchange between the parties can take up the bulk of a case's time in the court system, even when it is the least judicially supervised. Status hearings in court allow the judge to manage current obstacles to a completion of discovery, and anticipate any future ones.
3. Balance due process with conserving court resources. The court's most valuable resource is undoubtedly time. While every litigant fundamentally deserves the right to be heard, and the judge is required to fulfill that right, the use of the court's time must be factored in to a judge's management of all proceedings. A litigant is supposed to be guaranteed a fair and impartial judge, not a proceeding where the litigant controls the courtroom.
PUB LI C -PRIVATE PARTNERSHIPS.
It is our intention to form Public - Private Partnerships which would be a win win for both parties. Since the private sector may have the means and finances to undertake many projects which The Government may not be able to we believe these partnerships would not only be economical but also benefit the citizens of the country.
Projects such a Toll Hiway from North to South would ease the traffic woes for many commuters who want to use a pay as you go system. Traffic Enforcers would also be through a Public-Private Partnership where the government would earn revenue and income from proceeds collected without having to outlay significant amounts for administration and vehicles. Another partnership we will look at is building anew and modern airport in Couva where there is already a landing strip. The would be build, financed and run by a private consortium and the government would receive royalties and oversee the issues of National Security. Finally we will also partner with the Private Sector in setting up and having an efficient air and sea bridge between Trinidad and Tobago. This will be cost effective and profitable and offer a high standard of service to the citizens and the Government will receive royalties in the form or taxes and terminal fees. It is not worthy that these systems are easy to implement and because there is no corruption involved or any suspicion of corruption, they can quickly and easily be rolled it.
This 2017-2018 Budget represents a radical change in the way our national budgets are presented. In previous years Budgets have been very ambiguous, as they would expected to be since those laying it have no expertise in finance. The fiscal measures, revenue and manners of calculations as well as the process of formulating the Budget and its underlying assumptions, such as the basis for the estimated price of oil, were always shrouded in secrecy. The Budget Statements have always been written in a format that is difficult for the average person on the street to understand.
The estimates of revenue and expenditure usually erroneous in their base were presented without proper explanation. The true state of the economy has never been explained and all that was dictated was how well it appeared to be, the extent of borrowings, the real deficit between current revenue and expenditure, our actual cash balances, the extent of the overdraft at the Central Bank, and the fact that we were spending as a country far more than we earned, were kept hidden from the population. Contracts were given out to friends and family and were paid with high over runs yet these were never explained in the Budget. Ministers and friends became wealthy overnight but these are never brought to the fore front and never show to be the reason for the huge deficits and the state of the economy.
In this Budget, it is clear concise, and presented in a way the average person can understand. We have stated how money will be spent, we have introduced policies that will eliminate corruption and will save millions if not billions of dollars. We will move feverishly to recover moneys that have been pilfered or taxes that have been hidden or evaded. This is where much of our revenue will come from. It will not be from riding the backs of the poor man by increasing taxes and raising prices of gasoline and diesel. Winston Churchill, the wise man the he is said that trying to tax yourself our of debt is like trying to lift yourself up by standing in a bucket and pulling the handle. It does not work!
Unfortunately having had past Ministers of Finance who lack basic finance knowledge has continuously carried Trinidad and Tobago into the abyss.
C O N C L U S I O N.
We firmly believe that in order to pull ourselves out of the difficulties which the previous Administrations has put this country in through corruption and rampant squandering of public funds, there must be a Finance Minister who has a proven track record of sturdy and concrete finance knowledge and who has shown in the past he possesses the qualities to build and revitalize the Trinidad and Tobago Economy.
In addition he must be supported by a Prime Minister with the Management and International knowledge and expertise to steer Trinidad and Tobago in the 21st century.
Through our innovative solutions to the current financial situation and we will welcome all and any suggestions and recommendations to revive our economy and put us on a sustainable growth path.
We pledge to tighten revenue collection mechanisms, formulate new expenditure monitoring systems and new procurement systems to reduce expenditure further we will have action calls to reduce expenditure, but caution about dramatic cuts.
As a Government, in the spirit of restoring confidence and rebuilding trust, we pledge to continue to consult with the population at large and we will have fiscal regimes configured to support spawning of new businesses and getting existing businesses to adopt new modes and activity.
We will involve civil society and sectoral interest groups, on all matters of national interest, as we move forward. Our plan would include a development program with some government spending and mobilization of a significant amount of private capital. We will begin selecting sectors and continue this annually for projects aimed at generating foreign exchange and new output levels.
Our intended trough after three years would be 8% with new out put projected between 3 Billion in the first year to 6 billion in the third year. In addition we will work vigorously to decrease the annual murder rate and will negotiate with unions for additional training or retraining to continuously upgrade workers skills. We will also look at re-allocating more finances to capital expenditure as necessary.
I trust that having read the aforementioned budget, you as a citizen of Trinidad and Tobago, not as a PNM or UNC or otherwise can see the immense potential Trinidad and Tobago has and the considerable wealth that has been squandered and pilfered. From 1962 to today Trinidad and Tobago should have allowed citizens first world status rather than 3rd or 4th world as some say. There is still time to make Trinidad and Tobago the paradise it should be but at least it can be for our children and grand children.