Budget 2025 – Belated epiphany
High time to DIVEST ALL STATE ASSETS
2024, 10/01
Finally bowing to local and international pressure, Minister of Finance, Colm Imbert, announced that the Government would sell the 49 per cent State shareholding in insurance company, Clico, in the 2025 fiscal year, which begins today.
The sale of Clico is one of several special projects “to generate much-needed revenue and create new jobs, to divest assets that are better managed by the private sector, to encourage direct foreign investment and local investment, especially in the tourism sector.”
Among the special projects were the sale or lease of the defunct Petrotrin refinery, the sale or lease of the Magdalena Grand Beach and Golf Resort and a request for proposals to develop a yachting marina on lands being acquired from the adjacent Tobago Plantations Estate. Special projects include a five-star internationally branded resort hotel on the state-owned Buccoo Estate in Tobago of 398.42 acres, acquired from Clico for $174.80 million in 2017 as a result of Corporation Sole’s purchase of 100 per cent of the common stock of Occidental Investments Ltd and Oceanic Properties Ltd.
Buccoo Estate was part of its negotiation with the Sandals group to attract the Jamaican-owned resort company to build a Sandals resort and a Beaches hotel on the land. Sandals withdrew following environmental and other criticism of the venture.
Clico “is no longer considered to be of strategic importance to the Government and its divestment will earn several billion dollars in revenue for the Government, to see us through the financial difficulties of the next few years.”
In the 2025 Draft Estimates of Revenue, the sale of assets is projected to generate $4 billion, 7.4 per cent of the $54.2 billion the Government expects to generate in the 2025 fiscal year but does not specify what assets will be sold to raise the $4 billion.
In its financial year ended December 31, 2023, Clico declared profit after tax of $2.30 billion, an increase of 271 per cent compared with the profit of $621.42 million in 2022.
Most of the profit generated in 2023 came from the sale of its 56.53 per cent shareholding in its subsidiary, Methanol Holdings International Ltd (MHIL) on December 22, 2023. MHIL was sold to Consolidated Energy Ltd, a company owned by the Switzerland-based Proman group.
The 2023 audited, consolidated financials report the proceeds on the sale of the subsidiary, net of cash disposed and direct cost was $1,562,618. By this transaction Clico effectively relinquished control of MHIL and the group recognised a gain of $1,990,223 on the sale.
On September 30, 2019, the Central Bank announced that the local subsidiary of the Sagicor group had been chosen to acquire the traditional insurance portfolios of both Clico and British American (Trinidad). Clico’s total assets as at the end of December 2023 amounted to $12 billion, of which , $7.95 billion comprised Government bonds.
One of the equity assets that remains on Clico’s books is a 42 per cent stake in CL World Brands, a Scotland-based company that owns shares in Angostura Holdings Ltd. The rum and bitters company’s largest shareholder is Rumpro Company Ltd, which owns 44.97 per cent of Angostura. Corporation Sole owns 29.97 per cent of Angostura, through its ownership of 100 per cent of National Investment Fund Holding Company.
All state assets should NOW be divested to create a prosperous shareholding democracy and end the nightmare of the pseudo-FASCIST dynasty. Founded on a totalitarian movement, it is characterised by ultra-nationalist ideology, dictatorial leadership, centralised autocracy, repressive rule of elites, social hierarchy, extreme uniformity, authoritarian suppression of opposition, contempt for electoral democracy and political and cultural liberalism, relapse into barbarism and subordination of individual interests to benefit one race of the founders.
Key Budget 2024-2025 announcements
Highlights of the 2025 Budget on September 30, 2024:
Budget Theme-Steadfast and resolute, forging pathways to prosperity
Estimates of Revenue & Expenditure
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- Total Budget Revenue – $54.224B
- Total Budget Expenditure – $59.741B
- Fiscal Deficit – $5.517B
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Budget updates
Tobago
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- Total allocation – $2.599B
- Recurrent Expenditure – $2.376B
- Development Programme – $205M
- URP – $18M
- CEPEP – $9.2M
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Budget updates
Energy price assumptions-
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- Oil US$77.80 per barrel.
- Natural Gas – US$3.59 per MMBtu
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Key allocations
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- Health – $7.571B
- Education – $7.512B
- National Security – $6.113B
- Public Utilities – $3.221B
- Infrastructure – $1.862B
- Rural Development & Local Govt – $1.771B
- Transport – $1.410B
- Agriculture – $1.184B
- Housing – $750M
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Measures
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- Public sector minimum wage increases from $20.50 to $22.50/hour from Nov 2024
- Offer of 5% increase to public sector workers for period 2020-2022
- Backpay for public sector workers at end of 2024 if new agreements met
- All sports equipment (except clothing) is exempt from taxes & duties from Jan 1
- Small and Medium Enterprises owed refunds will be paid in cash by Dec 31, 2024
- 3-month tax amnesty from October to December, 2024
- Magdalena Hotel to be offered for sale or lease
- Request for proposal for new 5-star resort hotel on Buccoo Estate
- Request for proposal to develop yachting marina in Lowlands, Tobago
- Govt to sell 49% shareholding in Clico
- Govt to sell or lease Pointe-a-Pierre refinery
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Summary
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- Economy is stronger, more resilient than before COVID-19
- Real GDP to increase to 1.9% in 2024, driven by a 2.4% rise in the non-oil sector
- Inflation declined to 0.3% in July 2024
- Foreign reserves at US$5.5B or over 7 months cover
- Heritage and Stabilisation Fund stands at US$6.1B
- No intention of TTRA to pursue indigent vendors
- Online bank transfers and card payments allowed for Property Tax
- 89,441 residential owners have paid taxes of $91M in revenue
- Full proclamation of the Gambling Act in January 2025
- Subsidised mortgage loans cost Government over $4B
- From January -August T&T Mortgage Bank raised $797M for new loans
- Cumuto to Sangre Grande Highway nearing completion
- 100 new road paving projects to cost $210M in 2025
- New Tobago airport to handle 3 million passengers per year
- ANR Robinson Airport to be completed in 2025 costing US$130M
- Another deepwater bid round before the end of 2024
- T&T earned over US$1B from new LNG pricing
- 30% of energy needs from Renewables-Target by 2025
- In 2025, over 150 firms will receive support to improve technology
- Air arrivals to T&T in 2023 surged by 36% year-on-year
- End-of-year 2024 visitor arrivals expected to vastly surpass 2023
- Caribbean Airlines approved to acquire more aircraft
- Aim to improve cruise tourism arrivals to 500,000 by 2026
- $56M renovation of Magdalena Grand Hotel underway
- Applications expected from 3 internationally branded hotels in 2025
- State to purchase 2 fixed-wing aircraft for border patrol by 2027
- By 2027, State to purchase 12 Coast Guard vessels
- In 2025, Immigration will introduce an automated fingerprint identification system
- Implementation of online digital embarkation and disembarkation card in 2025
- Conversion from machine-readable to e-passports expected from 2025
- Police to acquire 2000 vehicles over the next 3 years, 500 in the first phase
- New police training facility to be established in Cumuto
- Phoenix Park donated US$10M in cancer diagnostic technology
- India donated 8 advanced healthcare robots valued at US$1M
- Central block of Port-of-Spain Hospital 60% completed, to open March 2025
- E-textbooks as part of e-learning system in schools by June 2025
- Book grants to continue in 2025 at cost of $20M; 20,000 benefited in 2024
- GATE enhancements in 4th quarter of 2024
- State to settle mutually agreed outstanding UWI arrears in 2025
- State to install 2500 LED luminaires, upgrade 300 streetlights on major highways
- State considering RIC price review for electricity
- Ministry of Youth Development & National Service gets $338M in 2025 and
- $150M more for Youth in Agriculture
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Colm’s mixed messages
Express Editorial September 30, 2024
For over five tedious and tendentious hours, Finance Minister Colm Imbert, in his budget presentation, claimed that the economy is sound, progress is happening in every part of national life and the only people who are dissatisfied with the Government are those being misled by the Opposition.
Mr Imbert’s persistently upbeat tone, so at odds with the national mood, would have turned off everyone hoping to get an idea of where the country was heading. Indeed, Minister Imbert himself probably didn’t believe a lot of what he was saying.
After all, on June 3 , under oath and in his official capacity as Minister of Finance, he was weaving a totally contrary narrative. In an affidavit presenting a case for the creation of the Revenue Authority (decided by the Privy Council in the Government’s favour on September 16), he told a harrowing story of doom and gloom.
His affidavit asserted that “the next three years will be very challenging for the country from a revenue perspective”. By contrast, in his budget speech, Minister Imbert declared, “We have put the economy back on a sound footing and with the expectation of the arrival of substantial cross-border gas in the next three years, our economic future is assured.”
Did the country’s economic prospects change so drastically in a mere four months?
Similarly, the Minister boasted in his presentation that “negotiations with the multinational oil, gas, processing, and petrochemical companies have yielded billions of dollars in increased revenue on a permanent and sustainable basis…”
His affidavit, by contrast, lamented that “the fall in oil and gas prices and the lower-than-expected production of oil and gas has had a profound impact on the country’s petroleum revenues.”
Mr Imbert was also very proud that the rating agency Standard and Poors (S&P) “recently affirmed Trinidad and Tobago’s credit rating at BBB-an Investment Grade Rating, with a stable outlook, reflective of the country’s credit strength. We consider this to be a significant achievement”.
His affidavit had an entirely different take on this same BBB- rating, stating that “S&P has warned that it may lower Trinidad and Tobago’s rating over the next two years if the country’s GDP per capita fails to recover with S&P’s expectations and if…the Government’s reduction of the accumulation of its debts and the reduction of its budget deficit is materially slower than anticipated. The Government has over the past 15 years maintained and increased the level of its expenditure through increasing or maintaining Government borrowings. Such Government borrowings are often from foreign lenders…This has a negative impact on the country’s foreign exchange reserve balances and import cover.”
Yet, in his budget presentation, Minister Imbert emphasised that T&T was “easily securing financing on international capital markets at very competitive terms” and presented a deficit budget of $5.517 billion.
Was the Finance Minister not telling the whole truth in his June affidavit or was he being disingenuous in yesterday’s budget speech?
A fixed vision
Newsday Editorial 1 October
Weeks before the US presidential election, amid turbulence in the Middle East and the ongoing European war, Finance Minister Colm Imbert on September 30 delivered a 5-hour budget premised, not on change, but on remaining steadfast and resolute. If it felt like more of the same, this was the point. He sought to perform a delicate triangulation: conveying notions of fiscal discipline and stability alongside optimism. It was an election budget of a new kind.
In refusing to cross the symbolic threshold of $60 billion by containing expenditure at $59.7 billion and keeping the deficit at under 3 percent of GDP, or $5.52 billion, he sent the signal that the Government will not engage in reckless spending in an election-year cycle. Yet, by pegging the fiscal package on an oil price of US$77.87 per barrel and a natural gas price of US$3.59 per mmbtu, he leaves room for mid-year adjustment.
Some of the fiscal measures have the aura of carrots being dangled. The 9.8 per cent increase in the “minimum wage” for state workers on the lower end of the spectrum accompanied a proposal to resume public sector wage negotiations under the CPO and offer a 5 per cent salary increase to high end staff. Both measures are modest.
The partial minimum wage could spur business to follow but it might worsen labour market distortions and increase state dependence. The 5 percent offer is destined to be controversial, if not rejected. Notable elements within Imbert’s vision involve matters that do not rock the boat, including amnesties, eschewing currency devaluation, maintaining deficits.
Social spending remains unchanged. Overdue asset divestments and repayment of at least a further $13 billion in Clico/CLF debts, which the state is still owed will provide revenue to ease financial burdens but they are plasters. Spending priorities of the Government remain the same, though there were concessions to address crime.
Apart from Dr Eric Williams, who held responsibility for the finance portfolio in 1957-1961, 1966-1971 and 1977-1981, no figure in local political history held the finance portfolio for as long and over such consequential spans of time as Mr Imbert, in the post for a decade. That is longer than even Patrick Manning who held the portfolio while prime minister.
Yet, in contrast to the longevity of the Minister, Diego Martin North/East MP, his budgets do not reflect the depth of profound policy sways one way or another. That, too, is a calculation. Clearly, the Government believes what is drearily predictable and familiar in one context is prudence within another.
However, with global turbulence looming , voters rightly feel the time for prudence is past.
Budget 2025
Policyholders cautions buyers on CLICO sale
“BUYER beware.”
October 1, 2024
This was the caution issued by Peter Permell, head of the Clico Policyholders Group (CPG), in response to Finance Minister Colm Imbert’s announcement regarding the Government’s plan to sell its 49% stake in Colonial Life Insurance Company (CLICO).
According to the CPG, “a word to the wise is sufficient. As it is certainly an open secret that notwithstanding the Honourable Minister’s belief that the ‘assenting’ EFPA (Executive Flexible Premium Annuity) policyholders ‘sold’ their policies in return for the now infamous 2011, $75,000 cash and zero-coupon bonds over 20 years offer—this is simply not the case, as there is no legal framework under the Insurance Act that allows a policyholder to sell his or her policy, and as such, CLICO’s legal liability as trustee is not extinguished.”
“In fact, we are advised that pursuant to Section 170 (6) of the act, ‘An assignee under a duly registered assignment shall have all the powers and be subject to all the liabilities of the assignor under the policy, and may sue in his name on the policy, but nothing in this section shall be construed so as to admit the assignee to membership of an insurer or to deprive the assignor of his membership in respect of a policy, except as provided in the instruments constituting the insurer or in its articles of incorporation, by-laws or other constituent document’.”
Valid contractual arrangements
“As a consequence, ‘assenting’ policyholders not only continue to have valid contractual arrangements with CLICO (the Government, having been repaid by CLICO); they are now entitled to claim, from CLICO or whoever acquires the shares of company, the 15% residual balance plus the accrued interest on their policies.
At this juncture, it might be useful to remind all stakeholders and the wider public that CLICO is now in the black, based on its 2023 audited financial statements which disclose $3.18 billion in accumulated surplus and $2.30 billion in net profit,” it stated.
The CPG also aimed to clarify Finance Minister Colm Imbert’s assertion during the budget speech regarding a “false narrative” that the Government has been fully repaid for the 2009/2010 CLICO bailout.
Imbert stated, “This is entirely untrue, since the CLICO bailout involved not only the insurance company, but it also involved the bailout of CL Financial and its subsidiaries, as well as companies like CLICO Investment Bank, British American Insurance and so on. Far from being fully repaid, the Government is still owed over at least a further $13 billion in taxpayers’ funds injected into CL Financial and the other related companies.”
The CPG stated that Imbert seems to have “conflated” the money that was owed by CLICO to the Government with that which is due from its parent company, CL Financial (CLF) in liquidation and its sister subsidiaries CLICO Investment Bank (CIB) and British American Insurance (BA).
Business hails VAT bonds
2024, 10/01
At a post-budget news conference following the reading of the 2025 fiscal package by Finance Minister Colm Imbert, Couva Point Lisas Chamber of Commerce (CPLCC) said it is pleased that the Government decided to issue VAT Bonds. Vice president Amit Dass said Small and Micro Enterprises should benefit.
“We would like to see exactly how the Minister goes about it . The last time VAT bonds were issued, even though multiple chamber members applied, not all were paid. So we hope this time the allocation is sufficient and the SME market gets first preference before bonds are issued for the large energy companies.”
Dass was hopeful that VAT bonds issued to energy companies would be in a non-refundable format where the energy companies would not be able to use it in a manner to affect the supply of foreign exchange to T&T.
Chamber head Deoraj Mahase described the budget as neutral. Moves to curb crime such as the National Forensic DNA Databank were among pre-Budget issues the Chamber raised. Removal of duties on sport equipment would help to grow the sport tourism industry in Couva, home to several facilities.
“The improvement to the sporting facilities is welcomed. We have three major sporting facilities in Couva.”
$1.18 billion allocated to agriculture was only scratching the surface of what the industry needs. The Government needs a more comprehensive plan for food security.
[Cinderella Agriculture was again scorned as an Ugly Sister with crumbs of $1.184B,
after contemptuous, misogynistic, derisive denial of a national award to an Emerita Professor who served the Caribbean Academy of Sciences with distinction while a pioneering Professor of Food Production and first female Professor at UWI Faculty of Food and Agriculture, foundation of famous Imperial College of Agriculture and UWI Trinidad.]
T&T Chamber praises budget outlook
2024, 10/01
Trinidad and Tobago Chamber of Industry and Commerce says the fiscal allocation toward combating crime has been “high and rising”as the situation remains alarming. and urged more collaboration with the private sector to effectively arrest the scourge in response to the 2025 budget presentation.
The chamber said it is pleased with plans to :
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- reduce food import dependency, such as the introduction of a food security and prices committee;
- the introduction of renewable energy and climate smart technologies to reduce water wastage and increase crop yields;
- digital transformation to promote data sharing and knowledge transfer;
- and rehabilitation of arable lands to target high value growth subsectors.
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The Chamber welcomed the promise of a forthcoming review to clearly define the process for accessing agricultural tax exemptions.
The Chamber was elated by VAT refunds to small and medium businesses by December 31, 2024 and by interest-bearing bonds up to the value of $3 billion to be issued by January 2025.
The private sector organisation supported the holistic, data-driven taxpayer approach, access to online payments and user-friendly taxpayer services that the T&T Revenue Authority (TTRA) is expected to introduce.
“Our hope is that this implementation will eliminate efficiency limitations that currently exist in processing both Customs and Excise and Inland Revenue Division transactions, insofar as it impacts the regional and international competitiveness of the business community. We view the thrust toward a digital economy as a critical node in our overall economic development. The measures outlined by the Minister, through the T&T International Financial Centre (TTIFC), to fully digitise key government services is commendable.”
Cybersecurity and overall national safety received significant attention from the Chamber, given the impact on both the investment climate and the operations of the national business community.
The Minister’s intention to issue a mandate that all international energy companies remit tax payments in USD, will boost foreign exchange revenue generation and assist in mitigating revenue shortages during periods of depressed hydrocarbon prices.
Divestment of key assets will create new employment and revenue generation opportunities. The Chamber said,
“We look forward to the public private partnerships being proposed. While the overall outlook seems positive, the efficient implementation of the measures to achieve the desired results is critical.”
TT Chamber urges radical reforms to boost productivity
October 1
Vashti Guyadeen, CEO of TT Chamber of Industry and Commerce, advised Trinidad and Tobago can learn from Panama, the most productive country in the region, where data drives decisions impacting the economy.
She sought radical reforms to boost productivity at the chamber’s annual post-budget discussion and identified two key areas for economic transformation: increasing productivity and strategic use of data.
Panama was a model for productivity, generating US$45 per hour worked, according to the UNECLAC 2024 report. Guyadeen attributed success to Panama’s use of Special Economic Zones (SEZs), which helped attract foreign investment and promote industrial diversification.
“Here in TT, (the chamber) fully supports the implementation of SEZs, recognising their potential to spur economic growth, boost productivity, and create a multiplier effect across various sectors.”
While TT lags with only 18 per cent productivity growth, implementing SEZs could have a similar positive impact locally. However, productivity alone isn’t enough.
“We must complement productivity with broader economic reforms to attract global investors.”
TT must adopt a culture of data-driven decision-making across all sectors, as data was “the new currency.”
Finance Minister Colm Imbert highlighted the July 2024 implementation of the SEZ Act as a major step toward boosting TT’s attractiveness as a business destination. SEZs will benefit from a reduced corporation tax rate of 15 per cent, exemptions on customs duties and VAT and streamlined regulatory approvals to enhance ease of business. He noted government approval of eight sites as SEZs, in accordance with the act, including the Phoenix Park Industrial Estate; Dow Village Industrial Estate; Factory Road Industrial Park; Debe Industrial Park; Point Fortin Industrial Park; Tobago Cove Eco-Industrial and Business Park.
At the discussion, Guyadeen praised work with the International Trade Centre to develop a National Trade Strategy, but urged further efforts to integrate data analytics in both the public and private sectors. She highlighted Namdevco’s National Agricultural Market Information System, as an initiative that could revolutionise decision-making in agriculture.
The Chamber, through its Food Security, Agriculture and Fisheries Standing Committee, is prepared to collaborate with Namdevco to ensure the private sector uses this data. TT could emulate The Netherlands, which transformed its agricultural sector into a global leader by fostering innovation among small and medium enterprises (SMEs).
Export development can also be greatly enhanced. She noted that a data-driven approach would allow for more effective targeting of resources to ensure firms are better positioned to compete in international markets. She proposed that data become a central component of national budget processes, enabling more informed decisions to enhance productivity and drive sustainable growth. Urging members and the government to collectively focus on innovation and competitiveness to secure TT’s economic future, she said,
“The future belongs to those who can turn data into actionable insights.”
[Another paltry budget for Cinderella Agriculture, second lowest at $1.184 Billion, DOWN from $1.4 billion in 2023, confirms the cynical misanthropy of prejudiced hypocrats in the idiocracy driving descent into MISERY.]
No minimum wage hike for private sector
2024, 10/01
Members of the public yesterday expressed disappointment that Finance Minister Colm Imbert announced there would be no increase in the minimum wage for the private sector. He told Parliament only public sector workers will benefit from a $2 minimum wage increase from $20.50 to $22.50.
San Fernando vendor Shawn Deokinanand said small entrepreneurs, including vendors, felt uneasy.
“They’re saying they are not targeting the small man like nuts vendors but wait and see what will happen,”
With T&T entering an election year, he had hoped for measures addressing the increase in food prices.
“People are struggling right now. I wanted to hear some measures to reduce food prices, and we were hoping to see the minimum wage increased to $30 an hour.”
Zaida Mohammed agreed the minimum wage should have been increased, citing steep food prices.
“We also hoped to hear that there would be a more reliable water supply.” Taxi driver Andre Granger supported the Budget but had hoped for a reduction in fuel prices.“I like the idea of the road paving but there should have been a fuel reduction too.”
Greater San Fernando Chamber of Commerce president Kiran Singh supported the increase in the minimum wage for public sector workers. “This is welcome news for the category of workers who will benefit from that increase. The cost of living continues to rise, along with the price of groceries and fuel. “We suspect large conglomerates in the corporate sector may follow the Government.”
Singh was certain that businesses in the Small Micro Enterprises (SME) sector may not be in a position to extend the same increase to minimum wage workers like security guards and cleaners due to cash flow constraints.
“We certainly support the Government’s decision to raise the minimum wage for their workers.”
In justifying the refusal to increase minimum wage for private-sector workers, Imbert said, “We recognise that any increase in the national minimum wage has its pros and cons. While it brings comfort and an improved standard of living for those at the bottom of the income scale, an arbitrary increase can create hardship for small businesses and marginal enterprises. It can lead to retrenchment, closures, or reduced work hours, thus cancelling out its benefits.
We have, therefore, decided not to make any further adjustments or increases to the national minimum wage at this time, especially since the last increase just a year ago was in the order of 17 per cent. Small and medium enterprises are still grappling with the challenge of managing that increase.”
However, Government, as the largest employer in the country, is aware of the difficulties endured by those earning the minimum wage.
“Accordingly, while we do not wish to place additional stress on the small business sector at this time, and while we continue to review the national minimum wage for future increases, we will increase the minimum wage for public sector employees from $20.50 to $22.50 per hour. This represents an increase of $2 per hour or 9.8 per cent.”
Opposition Leader Kamla Persad-Bissessar had previously urged the government to raise the minimum wage to $25 per hour due to the hardship from the rising cost of living.
“What stood out most about Finance Minister Colm Imbert’s Budget presentation yesterday was its length —over five hours, mostly defending Government economic policies. In his tenth budget, which he had warned in advance would be lengthy, Minister Imbert went into some detail on efforts he said are ongoing to achieve “a resilient budget that can withstand external shocks.”
There were numerous references to the strain placed on resources during the acute phase of the pandemic, a theme continued from Mr Imbert’s past two budgets. The presentation was prefaced by the usual reminders about geo-political tensions and supply chain disruptions, particularly shipping constraints affecting the cost of sea freight.
Challenging global scenarios were used to reinforce claims of prudent fiscal management — another recurring theme from budgets past — and to highlight growth that has been taking place. With an election due next year, there was a ramping up of the positive economic news, including three consecutive years of growth, a drop in the inflation rate and the positive performance in the non-energy sector. It helped that a few months earlier, in its June 2024 report on the T&T economy, the International Monetary Fund (IMF) had forecast a gradual and sustained recovery.
There were no obvious belt-tightening measures. The roll-out of property tax is ongoing and Minister Imbert did not provide any definitive word on the expected hike in electricity rates.
However, there were plenty of budget goodies for public sector workers, including an increase in their minimum wage from $20.50 to $22.50 an hour for MTS, URP and Cepep workers and offer of a five per cent wage increase for 2020-2022 and backpay by year-end if new agreements are met.
The minister also attempted to head off the usual complaints from the Tobago House of Assembly (THA) by pointing out that the island’s total allocation of $2.599 billion is an increase over 2024, as well as a 4.35 per cent slice of the national budget. In education, with one of the largest allocations, the proposed introduction of e-textbooks should offer some measure of financial relief to families struggling with the cost of school supplies.
National security, a sore point given worsening criminality, received promises of several initiatives to boost border security, including the acquisition of aircraft, offshore patrol vessels, drones and 2,000 new vehicles for the T&T Police Service (TTPS).
With these and many other measures in the $59.7 billion fiscal package, the devil is likely to be in the details.
Modest economic growth did not mitigate the effects of low oil and gas prices and declining production in the energy sector, so once again the country is saddled with a budget deficit of $5.5 billion. Mr Imbert noted it is the norm rather than the exception, as deficit budgets were also delivered during the UNC terms in office.
Mr Imbert put a great deal of positive spin on his presentation, but had to exercise restraint with the measures he announced. In terms of the fiscal year ahead, there are still many unknowns. The picture should become clearer when the budget debate begins on Friday.
TT Chamber president : ‘Time to consider constitutional reform’
Kiran Maharaj president of TT Chamber of Industry and Commerce (TT Chamber) says “the challenge of foreign exchange (forex) shortages must be addressed “with honesty and transparency,” among the business community and government. At the post-budget meeting on October 1, Maharaj issued several calls to action to the business community.
Addressing the forex challenge, she said, “Open dialogue and collaborative problem-solving are essential to stabilise our economy and restore confidence among investors and citizens alike.”
In his September 30 budget presentation, Imbert revealed that foreign reserves of US$5.5 billion, provide over seven months of import cover.
The TT Chamber was among the largest business lobby groups, having offered a wide range of recommendations to government ahead of the budget, resulting in “some small wins.”
Maharaj opened by noting crime, the most impactful issue, stymied investment and economic growth and ruined reputation. She said,
“Crime is not just a social ill; it is an economic adversary that erodes the very foundation of our prosperity,”
Urgent collaboration with the government and other business service organisations is critical. She highlighted eight arms of “this chaotic octopus,” needing urgent attention to develop impactful solutions to crime, including law enforcement, legislation and the judiciary, the prison system, community engagement, the use of technology, policy coordination, education and youth protection.
She described the ease of doing business as more than a catchphrase but “a lifeline for economic growth and opportunity for all citizens. We must champion the implementation of solutions that streamline processes, reduce bureaucracy and embrace digital innovations. By moving towards digital platforms, we (will) not only enhance efficiency but also promote transparency and inclusivity in our economy. We will support productivity.”
Drastic societal changes were needed to improve the business and social climates. The time had come for constitutional reform to be considered.
“Our governance structures must evolve to reflect the aspirations and needs of our society. A constitution that empowers and protects its citizens is foundational to our collective success. In this journey towards progress, we express our unwavering willingness to explore all avenues for public-private sector partnerships. Such collaborations (drive) innovation, infrastructure development and social programs that uplift our people.”
Social services and education gaps must be addressed to develop a more skilled workforce. She stressed the untapped potential of agriculture and the creative industries to diversify the economy and implored the membership to “speak up, lend support and forge a way forward that we want.”
[Constitutional reform is an opportunity to rescue TT with the launch of DIRECT DEMOCRACY which has a significant chance of improving the dire situation following the disintegration of a prodigal government.
The system of government is Direct Representation
The sovereign is the entire electorate.
Constitution change must be approved by electorate.
A BICAMERAL NATIONAL ASSEMBLY prevents monopolization-
1. Elects the Executive- Lower Camber
NATIONAL EXECUTIVE COUNCIL heads the administration and operates as a CABINET and COLLECTIVE PRESIDENCY with a 4 year term. Elects A PRESIDENT and VICE -PRESIDENT from Council members.
2. The SENATE or UPPER CHAMBER
One member from each County/Corporation and one from each borough elected concurrently with National Executive Council for a 4 year term.
The two chambers are equal in power-sharing. Any citizen may challenge a law passed by parliament and collect 10,000 signatures against the law within 100 days, for a national vote .
Voters decide by a simple majority of the voters whether to accept or reject the law.]
Effective implementation of budget
The Trinidad and Tobago Chamber of Industry and Commerce (TTCIC) believes that, while the 2025 budget seems positive, effective implementation will be critical to its success.
After Minister of Finance Colm Imbert’s five-hour presentation, the TTCIC said it was pleased with measures to reduce food import dependency and boost the agricultural sector.
This included the introduction of the food security and prices committee, the introduction of renewable energy and climate-smart technologies to reduce water wastage and increase crop yields and the rehabilitation of arable lands to target high-value growth sub-sectors. It was heartened by the promise of a forthcoming review to clearly define the process for accessing agricultural tax exemptions.
“We have proposed that a clear strategy be executed to address issues pertaining to land tenure and praedial larceny; and a policy to extend employment tax incentives to hire youths for the agriculture sector.”
The chamber was elated that VAT refunds will be issued to small and medium businesses by December 31 and interest-bearing bonds up to $3 billion would be issued by January 2025, ” an issue for which we have been consistently advocating.”
The chamber supported implementing an online payment option for property tax and other user-friendly services that the Trinidad and Tobago Revenue Authority is expected to bring.
“Our hope is that this implementation will eliminate the current efficiency limitations in processing both Customs and Excise and Inland Revenue Division transactions, insofar as it currently impacts on the regional and international competitiveness of the business community.”
Imbert listed moves to integrate technology into government services, emphasise cybersecurity and build literacy .
“We view the thrust toward a digital economy as a critical node in our overall economic development. The measures outlined by the Honourable Minister, through the Trinidad and Tobago International Financial Centre (TTIFC), to fully digitise key government services is commendable. Cybersecurity and overall national safety received significant attention from the TT Chamber, given the impact on both the investment climate and the operations of the national business community.”
It supported the proposal to mandate that all international energy companies remit tax payments in US dollars to boost foreign-exchange revenue generation and mitigate shortages.
The chamber was not all praises, as more was needed on the crime front.
“The fiscal allocation toward combating crime in Trinidad and Tobago has been high and rising and our country’s crime situation remains alarming. We are calling for more collaboration with the private sector to effectively arrest the crime situation.”
Of the $59.741 billion proposed expenditure for the upcoming fiscal year, $6.113 billion was allocated to national security. Revenue was projected at $54.224 billion. Health received the largest piece of the pie with $7.571 billion followed by education with $7.512 billion and then national security. The budget is based on an oil price of US$77.80 per barrel, and a natural gas price US$3.59 per mmbtu.
“While the overall outlook seems positive, the efficient implementation of the measures to achieve the desired results is critical. There are external factors of which we must be mindful as we face the year ahead. The Trinidad and Tobago Chamber continues to be ready and willing to work with the government and all other stakeholders for the betterment of Trinidad and Tobago.”
Divestment must include Heritage and other compatriot firms to boost the private sector.
2025 budget Top Ten Takeaways
The Top Ten items Minister Colm Imbert presented in the budget 2024/2025 on September 30 are –
1. With revenue projected at $54.224 billion and expenditure at $59.741 billion, the budget will be a deficit of $5.517 billion. Oil was assumed to be at US$77.80 per barrel and natural gas was US$3.59 per MMBtu.
2. Health won the lion’s share with $7.571 b. Education took the tiger’s share of $7.512 b.
[National security grabbed the wolf’s share of $6.113 b.
Cinderella Agriculture was thrown the pauper’s share as farmers struggle with abysmal facilities and armed thugs steal crops.]
3. The minimum wage for public sector employees will rise to $22.50, an increase of 9.8 per cent from the national minimum wage of $20.50.
4. The chief personnel officer has been instructed to begin wage negotiations with trade unions who accepted the previous four per cent offer, for the period January 2014 to December 2019. This excludes the Public Service Association and National Union of Government and Federated Workers who currently took the government to court. Government decided to offer public sector workers an increase of five per cent for this next three-year period, 2020-2022.
5. Small and medium enterprises awaiting refunds will be paid in cash by December 31. Large companies will be issued interest-bearing VAT bonds in fiscal 2025 in the sum of $3 billion with a target date for issuance of January 31.
6. Proposals to acquire the Point-a-Pierre refinery were from local CRO Consortium, INCA Energy LLC of USA and Nigerian Oando PLC.
7. Government will divest its 49 per cent shareholdings in Colonial Life Insurance Company.
8. All electric vehicle charging equipment and related accessories would be exempt from all duties and taxes.
9. Tax and NIS amnesty will be in effect between October 1 and December 31, 2024.
10. There will be no increase in electricity rates, water rates or fuel cost.
Just the way it is
2024, 10/03 Dr Bhoendradatt Tewarie
If a Government representative has been Minister of Finance for nine years and he is delivering what might be his last budget before the next general election, one would hope that as minister, he would have some kind of philosophical perspective from which to approach his budgetary presentation because he might want citizens to contextually understand, why the reality of what they are living is what it is.
A minister in this situation might take the view that his government has done well and that the country is in a good place and what the country needs is more of the same and that the government needs more time. All that is then left is for him to indicate that the government would be carrying on with business as usual.
Prime Minister Dr Keith Rowley had advised a few days before the Budget reading, that at least the next three years are going to be tough. This had also been clearly articulated by many commentators before and anxiety was already evident in the consciousness, articulation and behaviour of the citizenry. So, the Prime Minister’s acknowledgement of a formidable challenge was important, even if late.
The minister himself, in the previous budget, had signalled the natural gas production drop to 2.5 million cubic feet per day, which consequently means a significant annual drop in revenue. So one might have thought that the minister would give some perspective on how, for the welfare of country and people, the Government is going to steer us through these tougher times, when the immediate, stressful challenge is to maintain our standard of living and quality of life in the face of falling revenues, and to attract export focused investment, to generate jobs, decent incomes and foreign exchange.
Property tax, Revenue Authority and tax amnesty may improve revenue, but not jobs, incomes or forex. Minister Colm Imbert did not shed any light beyond this.
Everyone knows we are living through some rough years now. Household incomes cannot keep up with basic expenditure on food, housing and utility costs. Official inflation numbers are undermined by the cashless trauma of day-to-day living by hundreds of thousands.
So, the minister was hard-pressed to say that everything is fine and that we will press on with business as usual. By and large, that is what he did. “Steadfast and Resolute: Forging Pathways to Prosperity” was his budget theme.
Basically, the thrust seems to be that the Government has done what it has done, is making no apologies and is pressing on with what it sees as the business at hand. Two dollars more per hour for State workers, a maths intervention in 26 schools, digital literacy for students. Press on.
Heritage profits and taxes to Government do not change the price of fuel at the pump nor the inability of low wage earners, unemployed and taxi drivers to cope. Nor do they provide forex to buy the feedstock.
The Minister of Finance could have also taken the view that, as a country, T&T has done all right but that we have some peculiar challenges and to meet such challenges, we need to change course and head in a different direction or to treat particular things with a greater sense of urgency and identify what those are and what the Government intends to do.
Crime, murders and guns for instance. By the minister’s own admission, a lot of money has been spent on the TTPS, $28 billion over ten years and strong allocations are going to be made again this year. Clearly, allocations and spending are not what makes the difference to murder, gun and crime reduction. What is the policy shift and the operations strategy that would make the difference?
A minister in this situation would never take the view that as a government, they did not manage well; or that the government, has, in fact, failed on many counts.
No minister would want to explain reasons for failure or lack of results. That would be like singing your swansong. So successes are all that you admit as you announce more initiatives.
From this perspective, the first five years of budgets were validated by the 2020 election. This second five will be validated or rejected in the 2025 election. Steadfast and resolute. That is just the way it is. In the democracy that we are struggling to create, nothing much matters in between.
Little progress in diversifying our economy
2024, 10/04
As critical as the fiscal measures are in the 2025 Budget to day-to-day living, the need is for expert commentators, newspaper editorials and others to go past the bookkeeping exercise in the statement to focus on the plans and programmes to revive and advance the economy.Why?
In an economy with straightened finances and most of all having a limited range of economic development measures in place and functioning effectively, there will forever be contests about who should get what piece of the pie; and who should pay the price for such sharing.
We, therefore, will focus briefly on a couple of the plans and programmes in the 2025 Budget and its predecessor editions, to identify and analyse the measures put forward by the Minister of Finance and the Government to grow the economy. Moreover, we survey whether or not the plans and programmes have been advancing or stuck in the rut of unfulfilled promises and failed implementation measures.
Under the headings of infrastructure upgrade, listed for attention are plans for the energy sector, manufacturing, agriculture, export production made possible through the Exim Bank and the supporting “enabling sector” for trade facilitation, digitalisation and digitisation, there is too, quite a listing of projects which are being contemplated and in instances have begun to be materialise.
The question then becomes the feasibility of such projects and implementation timelines beyond recurring promises of start-ups.
In the energy sector, which Prime Minister Dr Keith Rowley identified as the main hope for revival, Dragon Gas production and processing and other proposed energy related projects between Trinidad and Tobago and Venezuela, are absolutely dependent on geo-political concerns and the actions of the USA and are therefore completely out of our control.
To his credit, Finance Minister Colm Imbert is absolutely spot on in saying that T&T has an agreement which if and when operationalised can be of significant benefit to this country and its people. It cannot be reasonably expected that T&T should do anything to jeopardise the agreement.
Where there is movement from planning to production is in the operations of the Exim Bank. US$983 million has been disbursed to 183 manufacturers (2021-2023) with annual surpluses on those borrowings registering US$100 million. The outcome has been a 17 per cent contribution to the Gross Domestic Product by the manufacturing sector.
However, in agriculture and tourism, even making allowances for the disruption of COVID-19 in the long touted tourism sector, there is little meaningful growth. One negative result has been the ballooning TT$7-plus billion food import bill.
The Minister did outline a multitude of projects and intentions that “we plan to and have the intention to, and are laying the groundwork for,” but the fact is they remain in the hopeful stage of implementation.
What the Minister did state positively is that in relation to the Government’s plan to develop industrial parks as “the cornerstone of our industrial strategy, there has been significant progress.”
The difficulty with all of the planning and figuring is that over the 10-year period and 10 budgets since this Government and Minister Imbert have been in office, Prime Minister Rowley himself made it known that dependence will continue to be on the energy sector.
Ministerial meeting with Energy Chamber
1 October
The Energy Chamber of Trinidad & Tobago will meet Finance Minister Colm Imbert and Energy Minister Stuart Young before the end of the year to discuss strategies for stimulating further exploration and production in the country.
During his presentation of the 2025 budget, Imbert stated that the Government currently spends over $5 billion annually on social grants. While it is not possible to increase this at present, changes may occur in the future as cross-border gas begins to flow and revenues increase.
“Additionally, oil and gas taxation is a very complex area, and as a Government, we must always seek to balance tax incentives with revenue collection, to ensure that we do not find ourselves in the situation in 2015, when a major oil company told us that because of the petroleum tax structure existing at that time, the country would get no revenue from them for nine years.”
“Accordingly, together with the Minister of Energy and Energy Industries, I will be meeting the Energy Chamber within the next three months, to discuss what can be done, within reason, to stimulate further exploration and production, so that appropriate adjustments can be made to the oil and gas taxation regime in the first quarter of 2025, through a Finance Bill.”
In 2025, the Government plans to reallocate acreage, where feasible, to allow lease operators to extract oil from inactive fields with proven reserves which can be quickly brought into production through a proactive drilling programme.
The Energy Chamber applauded this move. “The Energy Chamber of Trinidad & Tobago has noted the Minister of Finance’s statement that he and the Minister of Energy and Energy Industries will meet the Energy Chamber in the next few months in order to finalise details of changes to the fiscal regime for the upstream energy sector to be introduced in the Finance Act 2025.”
“The Energy Chamber warmly welcomes the Minister’s statement, and we look forward to detailed discussions on changes to the oil and gas taxation regime which will further incentivise investment into new oil and gas production. The Energy Chamber deeply appreciates the commitment to consultation and to finding solutions to the complex issues around oil and gas taxation.”
The Energy Chamber is fully aligned with the Government objective to maximise investment in the sector and to quickly monetise hydrocarbon resources for the benefit of its citizens.
“Furthermore, increased investment in the sector means more activity for hundreds of our contractor and energy service company members and the thousands of people whom they employ directly or as sub-contractors.”