Government’s mid-year review will be done on Friday April 8, Finance Minister Colm Imbert announced yesterday.
Imbert did so in Parliament while replying to a motion by Opposition MP Suruj Rambachan who sought annulment of government’s 12.5 per cent VAT implementation.
The mid-year review was announced by Imbert last September in his 2016 Budget presentation.
He said that following wide consultations over the upcoming six months—September 2015 to March 2016—on the state of the economy and T&T’s financial challenges, Government would make appropriate adjustments to the 2016 Budget “if required” in the March 2016 mid-year review, to “ensure the Budget is a comprehensive regime for restoring long-term discipline.”
Imbert’s $63 billion Budget included a number of measures that have already been implemented including fuel price hikes, personal allowance tax breaks, retirees’ benefits and, most recently, the 12.5 per cent VAT implementation (although Imbert didn’t detail in the budget what the VAT would apply to.)
He also announced return of the Property Tax, institution of a Revenue Authority, NIS contribution increases from July, gaming sector regularisation and other measures and proposed projects including discussions with the Inter-American Development Bank for a projected mass transit system.
Reviews of several sectors now underway—from health and the economy to contracts in the public service—are also expected to be factored into the review. Consultations have also been held in the education sector.
Prime Minister Keith Rowley in his year-end address outlined budget measures, adding that Imbert would give “additional and more detailed measures” in his mid-year review “as we steady the ship.”
Imbert gave no details of the review yesterday and didn’t reply to queries sent by text on the matter.
The 2016 Budget was based on an oil price of US$45 and gas price of US$2.75 per mmbtu.
During yesterday’s motion debate, Imbert said while the Government had recently seen a “substantial” recovery of the oil price from US$28 to US$38, following the earlier price drop, the increase was still way below the Budget’s oil price basis of US$45 and therefore below T&T’s revenue and expenditure level if the country didn’t move away from oil dependence.
Imbert described Rambachan’s motion—which he labelled “pure histrionics”—as “irresponsible and reckless,” adding, “I reject this motion.”
Seeking to justify the VAT implementation, Imbert said Government had to deal with a $25 billion financing gap between revenue and expenditure in 2016.
“What did you want us to do to collect the $25 billion? Retrench people? Cut wages and salaries? We not going to do that!” he said.
Imbert said former prime minister Kamla Persad-Bissessar signed a $1.6 billion loan for T&TEC ten days before the September 7, 2015, general election. Imbert said the loan matured on February 28 recently and every other week he’s being told of short-term loans undertaken by the PP administration—all of which have been maturing since November, December, January and February.
“All they did was pander to the population,” Imbert complained, hitting the PP’s “populist” measures.