Port-of-Spain – There were no real surprises in the budget for the fiscal year 2019, along with no “goodies”.
However, while titling it ‘A Genuine Economic Turnaround’, Finance Minister Colm Imbert on Monday sent signals Trinidad and Tobago was on the path to a sustained shift from economic stagnation to growth. However, while he reached out with the possibility of good news with one hand, he took with the other, raising the price of super gasoline by (TT) $1.
The fuel price adjustment was expected, since Imbert had indicated as much in the budget of 2018. This time around, Imbert attempted to temper the blow by maintaining a steady diesel fuel price in an attempt to “slow down the complete deregulation of fuel prices in order to ease the burden on taxpayers”.
The new price of super gasoline is now (TT) $4.97 per litre up from $3.97, and has the potential to save the government up to 50 percent in subsidy payments. If there was no adjustment to the fuel price, at current oil prices, the 2019 subsidy would be at least $1.5 billion. Imbert said the State had spent $29 billion in subsidies from 2002 to 2018.
The increase in fuel prices was the most disruptive element of what was an otherwise lacklustre budget speech. In the three hours it took to deliver, Imbert spent most of that time touting the achievements of his administration’s tenure, to an accompaniment of frequent barbs delivered against alleged mismanagement by the previous government. This was his fourth budget presentation, yet Imbert could not resist revisiting an economic overview of the now Opposition’s time in office.
This budget saw social safety nets expanded, including increased pension ceilings, increased food card limits, higher disability and public assistance grants, tax allowances for tertiary education, stamp duty waivers for first time home-owners, 24/7 rural health centres, and substantial increases in the fines for cruelty to children, littering, and starting bush fires.
Imbert’s second biggest announcement of the day was on Petrotrin. During a recap of the government’s decision to close the Pointe-a-Pierre refinery, he said the final cost for termination packages for permanent, temporary and casual employees would be $2.6 billion.
The breakdown would see $1.8 billion for all employees under the separation packages negotiated by nine collective agreements, $550 million in backpay and $203 million in vacation pay for all employees, and $30 million in ex-gratia to all contingent employees.
However, Imbert cautioned the country was “not yet out of the woods”, noting: “We are ever mindful of the impact of the volatility in energy prices with the level and direction of change difficult to predict.”
He noted Trinidad and Tobago was poised for economic growth in 2018 of 1.9 percent.
“Revenue for 2018 was $42.7 billion, while expenditure was $48.9 billion, leaving a $6.2 billion deficit. Public sector debt was a “manageable” 60.9 percent, with external reserves totalling (US) $13.7 billion as at September 25 – more than enough to cover the country’s (US) $3.7 billion external debt.