Government will seek parliamentary approval on Friday to increase borrowing limits to the level of $30 billion to deal with general development and also to a borrowing level of $45 billion for state agencies guaranteed by Government.
This is according to various figures given in the House of Representatives’ agenda for Friday’s House sitting where several motions on the matter will be debated.
Finance Minister Colm Imbert on Monday told the T&T Guardian the situation was necessary due to the borrowing level done over the last five years.
At last Friday’s Lower House session, Government House Leader Camille Robinson-Regis signalled that at the next House session (this Friday), Government would be presenting motions to raise the borrowing ceilings.
She said debate would focus on amendments regarding several pieces of legislation regarding borrowing, including the Development Loans Act, Guarantee of Loans Act (for Companies) and External Loans Act.
According to Friday’s House agenda, debate will focus on a motion concerning the Development Loans Act which authorises Government to borrow money internally or externally in sums not exceeding TT$30 billion for financing general development in T&T.
It can also be done for repayment of borrowings effected for general development; or repayment of borrowings for general development; or by a statutory authority, by a state enterprise or UWI.
A resolution to be debated in the motion seeks to authorise Government under this Act to borrow internally or externally “in sums not exceeding $15 billion TT.”
Another resolution seeks to allow Government to borrow $15 billion under Section 3(1) of the External Loans Act, Chap 71:05.
This Act allows Government to borrow money externally in foreign currency for financing general development in T&T, or of repaying borrowings effected for the general development.
Also under debate is a third resolution—under the Guarantee of Loans (Companies) Act, Chap. 71:82 —which mandates that the aggregate amount of all borrowings by State companies that are guaranteed by Government under the Act, shall not exceed $45 billion.
Imbert explained: “Because of the borrowing done over the last five years, we are very close to the limits in all three (Acts) and without these increases, we would be unable to pursue T&T’s Development Programme or finalise a number of loan arrangements entered into by the previous government.”
He didn’t detail if Government would seek to use the full limit of the $15 billion and $45 billion sums allowed under the Acts, or what specifically the funds will be used for. He will speak further on it on Friday.
At last Thursday’s weekly Government media conference, Imbert said T&T’s Development Programme would have been among “one or two things” which might be delayed due to falling oil prices.
He said the latter was a serious concern. He said the Development Programme includes roads, bridges, schools, infrastructure, etc.
Commenting on the upcoming “borrowing” motion, Opposition Whip Dr Bhoe Tewarie said: “The fact Government is seeking to increase borrowing means they will be able to borrow up to those levels (in the Acts) if they find it is necessary. What we are interested in hearing from the Finance Minister is what exactly, they are planning to borrow for.
“The Government’s borrowing strategy cannot be taken in isolation.
“It has to be seen against the background of the recently—presented Budget and the extent to which the Budget has been implemented, is being implemented or is implementable as well as the numbers used in the budget for revenue, expenditure and deficit.”
Economist Indera Sagewan-Alli, who noted the PP Government had also increased borrowing limits in its term, said she was not surprised Government also was going that route.
She added: “Given the information provided by the Finance Minister in the 2016 Budget, there was a lot of outstanding debts to be repaid, monies spent, owing etc.
“Add to this, falling energy prices and Government’s $63 billion Budget. The money, therefore, has to come from somewhere to pay debts and treat with 2016 expenditure.
“This (borrowing) route is the only one left to Government, given the declining revenue situation. Government’s cash cow of sorts, the National Gas Company, has instituted a wage freeze and that, to me, is an indication of how bad things are.
“Also, there’s the worsening foreign exchange situation and TT currency depreciation. If you are at the lower end of the band, you will know the dollar has depreciated.”
Sagewan-Alli said borrowing for development purposes was not “necessarily a bad thing” since development could lead to medium-term revenue generation. However, she expressed concern about borrowing that involved incurring new expenditure.
“Without a doubt they should, for instance, shelve the Rapid Rail mass transit project for at least a year,” she added.
Sagewan-Alli said that project would add to various transportation systems already in train with hefty state subsidies and would further encumber T&T with the need for new technology, infrastructure and human resources.
Urging Government to lean towards practical revenue-generating programmes over vanity projects, she added: “(So) on Friday I hope the minister will be open about what he’s borrowing for, so there can be full transparency and accountability.
OPPOSITION RESPONDS
The Opposition UNC has expressed concern that Government’s unprecedented move to head several new parliamentary Joint Select Committees (JSC) would hamper full accountability.
Government recently announced members for 15 JSCs as well as the Public Accounts Committee (PAC) and Public Accounts Enterprises Committee (PAEC). The JSCs included new committees on Human Rights and Diversity, Foreign Affairs and on other issues.
The Opposition heads the PAC.
UNC whip Dr Bhoe Tewarie, who was named to head the latter team, noted that the PNM administration had instituted a practice of having Government members chair the new JSCs and have Opposition members as deputy chairmen of those teams.
He said previously under the PP’s tenure, JSCs were headed by Independent Senators. He said that was done to ensure accountability.
Saying Government should not head the JSCs, Tewarie added: “I think it is unreasonable for the Government to chair the five new committees among the JSCs.
“One cannot expect the Government to scrutinise its own work. It is something of a joke that Government would want to chair these committees now and ask the Opposition to be deputy chair. It makes little sense for the Opposition to play that role.
“If the Government is in the chair, it will means it’s one more role to dominate the Parliament and that’s a reversal of roles. It seems they want to be in charge of everything,” he added.
Three of the new JSC teams—the Finance and Legal Affairs committee, Land and Physical Infrastructure Committee, Social Services and Public Administration—hold preliminary meetings today at Parliament.