Finance and the Economy Minister Larry Howai said yesterday the Government expected to lose $3 billion in revenue from the current fiscal year.
He said so during yesterday’s post-Cabinet news conference at the Office of the Prime Minister, St Clair.
The minister said he expected that by the end of the fiscal year the overall position would be in deficit but not as large as was originally anticipated.
He said the Government projected a deficit of 2.3 per cent of GDP or approx $4.3 billion but he said: “We expect that we will come in much below that number when the final figures are computed. We expect a deficit of well below two per cent, which is very commendable performance in light of turbulence we have experienced over the past year.
“We saw a drop of about $3 billion in our revenues.”
He said the reductions came from VAT, income and corporation taxes.
Howai said despite funding for major projects, such as the Couva Children Hospital and the Arima and Point Fortin Hospitals, these projects will continue as funding has already been arranged.
He said arrangements were being put in place for the completion of the Point Fortin Highway.
Howai said from the $5 billion already spent on the project “about $3.5 billion represents our own cash flows... (and) we expect that we will have to go to (the) market to borrow the additional funding that will be required for the overall completion of that particular project.”
He said the Government’s “expenditure cuts of $6.5 billion was able to allow us to show a performance against the budget that was $3 billion better than we had originally anticipated.”
According to Howai “much of this reduction came from reduced expenditure in goods and services and it also came from reduction in transfers and subsidies, about $2 billion of that came from transfers and subsidies.”
He said while “a significant part of it represented the savings on the fuel subsidy a substantial part of it represented reductions in transfers to state enterprises and statutory corporations.”
He said Government was considering four IPOs.
“Government has identified four companies that we are looking (at)... these are from a broad range of sectors and we would want to engage in discussion with them first before we make anything public,” he added.
The minister said Government had commissioned the World Bank “to start a process of assisting us with the rationalisation of the social expenditure programme to ensure that we continue to meet the objectives of ensuring the poor is protected.”
He said the initiative was also aimed at “ensuring that we remove duplication of expenditure and we streamline and ensure that value is received by the beneficiaries of these programmes.”
Asked what would the Government do if the bank was to advise it to cut certain social services, Howai said he did not think the World Bank “will take that kind of approach.”
He said: “What they are mainly looking at is where there is room for us to remove duplication, perhaps to streamline the process to ensure we could tighten procedures, so that where people may be getting two or three claims, when they should be getting one, we will be able to strengthen that system and allow us to reduce our expenditure and focus it where it should be focussed.”
He said the recently-launched health and biometric cards “will help reduce a lot of the expenditure, a lot of the duplications we have.”
Howai said the Government also was expecting a dividend payment from Trinidad Generation Unlimited, the La Brea-based electricity generator, of about US$250 million and the repayment of a loan amounting to about US$600 million.
“So those two will give about US$850 million which improves our overall level of reserves and it will as well increase our overall cash inflows to the extent of over TT$4.5 billion,” Howai said.
Clico issue
On the issue of the million-dollar payment to Clico directors earlier this year, Howai said he was still awaiting a report from the Central Bank but insisted he was taking steps to make a public statement on the issue.
“We have given time and we ourselves need to move forward and I have asked my own attorneys to assist me with looking at what we received and how best we can make a statement on the entire matter.”
On the investigations into the controversial First Citizens IPO, Howai said the investigation by the Security Exchange Commission was close to completion.
And Energy Minister Kevin Ramnarine, who also spoke at the news conference, said the reduction in oil price was not all bad news as it had resulted in a significant reduction in the fuel subsidy for the period October to July which was $1.3 billion compared to corresponding period in the previous fiscal year, when it was $3.5 billion.
Ramnarine said: “There is a huge saving to be had in terms of subsidy as a consequence of falling oil prices, so it is not all bad news.”
Communications Minister Vasant Bharath said he was initiating legal action against ILP leader and former PP minister Jack Warner for claims made about his ownership of a house in Westmoorings.