Hold off on fuel price hikes.
That's the call from some quarters as speculation — and jitters — mounted that today's 2018 Budget may involve increases such as on diesel fuel.
Finance Minister Colm Imbert will deliver Government's third Budget of its term, at 1.30 pm in Parliament.
Messages of continuing tough economic times — and a correspondingly tough Budget — telegraphed by Government in the last week have heightened concerns among the public.
Government sources were tightlipped yesterday on speculation the 2o18 Budget could be slightly lower than Imbert's 2017 package of $53b and if taxes on alcohol and cigarettes might be increased as they were previously.
In his first 2015-16 Budget, Imbert projected removing the fuel subsidy over 2015-2017 and started then, hiking fuel prices since.
In the 2017 Budget, he had warned other transfers and subsidies to be examined included “complete elimination of fuel subsidies and reduction of transfers to utilities".
He had also noted “chronic” issues and debts in WASA and TTEC, which has heightened speculation the 2018 package could include transfer reductions to utilities — and whether this may impact rates ahead.
Minister in the Ministry of Finance Allyson West recently said the Budget would be a tough one following Government's signals at last week's forum on T&T's economic circumstances.
There, Prime Minister Dr Keith Rowley said the revenue situation facing T&T in 2018 remains very challenging, tightening of revenue collection mechanisms is necessary and further expenditure cuts will be "unavoidable" due to the 2018 deficit.
Rowley said T&T "out of necessity should remain open to any and all suggestions to boost revenue levels" and some items for 2018 will have to be postponed.
He warned T&T would have to "do more with less in the future and "hold some strain for now."
West said the Budget will reflect the need for "everybody" to contribute to getting T&T out of the current situation — but she didn't think it would be austere as some feel.
However, the Joint Trade Union Movement has urged Government to avoid placing the brunt of burden on workers and the poor, to share it equitably and avoid further fuel subsidy reduction resulting in price hikes on diesel, super and LPG.
JTUM added, "This (hikes) will place hardship on people who definitely cannot afford it, unlike the one per cent. It'll further exacerbate inequality. Any attempt to increase the fuel price will be vigorously resisted."
JTUM supports stimulation of certain sectors (which Government recently announced) and social programme reforms (which economists have advised).
Today's delivery will reveal if Imbert's 2018 budgeting formula is the same as 2017’s where revenue shortfalls were financed by borrowing, Heritage and Stabilization Fund drawdown, sale of assets and repayments.
He had projected oil price hikes between US$50-60 over 2017/18. Last week prices were around US$50.
Opposition MP Dr Bhoe Tewarie said, "I expect a lot of numbers today and excuses about their options. Whether the fiscal measures reflect that, is another matter."
Following today's Budget, Opposition Leader Kamla Persad-Bissessar replies on Friday.
What to expect in 2018 package
n Report on success of this year’s $53b expenditure; tax/revenue collection; asset sales; upcoming management of Petrotrin’s $14b debt; progress of 2017 oil/ gas reforms, petroleum tax profits; debt to GDP levels, public debt, FATCA September implementation by banks/BIR.
n Status of lagging 2017 items: Legislation for Procurement Regulator/ Bureau promised within “six months” after last October’s Budget; Property Tax, Revenue Authority legislation expected by 2017 second quarter; legislation to split the Heritage/Stabilisation Fund; on Transfer Pricing. Education ICT upgrades; Gambling, insurance sector regulation, labour law attention.
n Status on for exchange issues; Venezuelan Dragon Field venture following US sanctions against Venezuela; economic growth after Central Bank’s small upward projection, and whether THA gets its requested $5b.
n Projected revenue-raising possibilities including divesting/closure/investments; deficit levels, if lower than April’s $6b estimate.
n Confirm possible repeated cuts to ministries’ spending; if priority allocations change from 2017 scale (from $7billion in security onwards); outstanding debts including monies owed to contractors.