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Former ministers support IMF recommendations
Three former government ministers agree with the International Monetary Fund (IMF) that there is need for increasing T&T’s revenue and decreasing debt.
In its August 4 statement after its Article IV consultation, the IMF team suggested that T&T should undertake a “medium-term, modestly front-loaded fiscal adjustment to re-balance the public finances and put debt on a sustainable path. Delaying fiscal adjustments would only make it harder to arrest rising debt levels and restore confidence down the road.”
The IMF team also suggested that there was need for an increase in capital investment in order to “set the stage” for a lasting recovery in economic growth and for economic diversification.
Former Planning minister Dr Bhoendradatt Tewarie said the strategy for increasing revenue should either be to generate more revenue or cut expenditure.
Tewarie delivered his remarks in an interview after a conference titled, “Breakthrough Strategy for a Sustainable Nation” which was held yesterday at the Arthur Lok Jack Graduate School of Business in Mt Hope.
“How you get revenue is important, because my understanding about revenue is that it is not going to come from the taxation measures that they have instituted. I don’t think they are going to meet their targets. I don’t think we are going to get the revenue we anticipated from the new oil and gas from Juniper and Angelin because there are going to be taxation breaks that the companies take that are not going to give us the revenue. We have a problem there.”
The second method for increasing revenue he said was to cut costs but, according to Tewarie, “cutting costs does not mean that you are cutting everything and you are putting everyone on the breadline. You have to judiciously look at what is your expenditure pattern. You have to make up your mind about what the country can afford.” he said.
Tewarie added that in looking at the expenditure pattern of the country, there must be a developmental agenda which the government must fund that would create jobs and opportunites and provide income for citizens.
Conrad Enill, former minister in the ministry of Finance said finding revenues is a long term issue that was talked about and involves in part the role of the T&T Revenue Authority.
Asked whether enough was being done to generate revenue, he said generating revenue was a function of T&T’s capacity to do so.
He stated that he did not believe that there was enough capacity to grow revenue currently.
Enill added that there was no need for austerity measures and all that was required was for T&T to “do more with what we have and be a little more strategic in what we do.”
Mariano Browne, former minister in the Ministry of Finance said 2008/2009 signified the end of T&T’s boom period.
“The point I made then, is that our revenue is $42 billion and therefore we had to manage our expenditure profile with $42 billion in mind.”
He added: “What has happened is that when prices went up, we got a little more revenue and we expanded our expenditure unsustainably from roughly $40 billion to $60 billion and in the process, we spent a little more in terms of social services which could not continue.”
“Here we are now, our revenue fell in 2015 to $41 billion, last year $37 billion, this year it is likely to be $35 billion or less. You can’t continue to borrow your way out of that. Quite frankly, neither the last administration or this administration has begun to address the problem so it isn’t a question of what we are doing. It is business as usual.”