Budget a challenging but realistic exercise

THE EDITOR: In a letter which appeared in the newspaper under the caption “A stay-as-you-were budget, generally,” I listed a few policy perspectives which, in my opinion, should inform the 2017/2018 budget.

This heading of the letter betrayed a genuine misunderstanding, on my part, of the character of Minister of Finance Colm Imbert as an individual with an unusually strong and resolute character, notwithstanding his less than average human frame.

Also, it was my feeling that, judging from the media, most of the usual “budget soothsayers” appeared, for whatever reason, to be silent. This latter, I suspect, could have been due to the fact that this year’s budget was not, by any means, going to be a straightforward exercise and could have even informed the decision of the Government to launch its own budget forum with a view to eliciting public opinion as to what this year’s budget should contain.

My recommendations for consideration for the 2017/2018 Budget were thus made against the above-mentioned misjudgment on my part of the “metal” of which the minister had been wrought. Indeed, had I known Imbert better, the heading of my letter would certainly have been different. Further, now that some of my recommendations have found their way into in the budget, it certainly would not have been a “Stay-as-you-were budget.”

Even though I were to be accused of “blowing my own trumpet,” I believe it is fitting that I comment briefly on the recommendations in my letter which have found their way in this year’s budget:

1. The foreign exchange regime

I am of the view that there ought not to be a devaluation of the TT dollar and that the market should be allowed to determine the value and allocation of foreign currency.

Thus, while pure competition will not govern currency allocation, it seems that an element of a “managed” currency is to be put in place bearing in mind contributions to the earning of foreign exchange by applicants.

2. Income tax rates (private and corporate)

In order to spread the burden of adjustment more equitably, corporate taxes are to be moved upwards.

3. Fuel subsidy

Increases here have signalled the eventual removal of all fuel subsidies shortly.

4. Diversification of the economy

Measures aimed at providing incentives are to be introduced.

5. Property tax

This is to be introduced in 2018.

It should be noted that the above, as well as a wide plethora of increases, have been made within the context of the decision of the minister to endeavour to close the gap between government revenue and expenditure. Also, some of these increases are intended but to represent changes in the value of money, over time.

This 2017/2018 budget is by no means a “bankrupt” budget. Indeed, it contains elements which, if properly harnessed and implemented, would set the stage for an economy which could be competitive and robust — an economy which is rid of the “gimme gimme” syndrome. In this regard (as the title of the budget seeks to convey), a “Change In the Paradigm,” leading, inter alia, towards cost-effectiveness, rationalisation and “realistic” charges, especially in the State enterprises and public utilities sub- sectors, could be expected in the not too distant future.

I had offered congratulations to Imbert on his handling of the 2015/2016 budget. This I do also in respect of the 2016/2017 budget, paramount being his success in keeping this country from the “jaws” of the IMF.

Finally, the minister has proven that, having taken measures leading to a balanced budget at this time (ie, well into the mid-term of his Government), he is a “political savant.”

ERROL OC CUPID, Tacarigua