There was a minor clash in the Senate last Thursday evening between Finance Minister Colm Imbert and Independent Senator Dr Dhanayshar Mahabir, an economist, over the 2015/2016 budget.
Mahabir’s chief worry was the $20 billion gap between current expenditure and revenue in government’s $63 billion Budget and he suggested a reduction to $50 billion. Dismissing the suggestion, Imbert said they would have to kill him first. Imbert said any cut in the existing budget would result in immediate negative growth, massive retrenchment and a host of other social ills.
He was giving the wrap up on the budget debate in the Upper House on Thursday night which approved the fiscal measures. His strong stand against any cuts caused Mahabir to jump to his feet to tell Imbert that was the harsh reality, unless he managed to raise enough revenue, which was uncertain.
Doubting the Government would manage, Mahabir asked, “Is it you have a plan to gradually cut expenditure?
“I don’t want you to do anything drastic to yourself. Do you have a plan to manage the budget?” Imbert confidently replied, “This minister of finance is not going to crash the economy.”
Earlier, Mahabir, in a spirited contribution, warned that T&T’s economy, if not rescued, would experience a Greek tragedy, since Greece was close to bankruptcy because of heavy debts to the European Central Bank, the International Monetary Fund and other financial institutions. “Not like Odysseus and the Cyclops (a Greek tragedy),” Mahabir said, referring to the Greek economic crisis. Mahabir warned that raising revenue was going to be a challenge for the Government and offered some of his own solutions.
He criticised Imbert for complaining about the $500 million wage debt to public servants the Government inherited from the People’s Partnership administration. He said if the former PNM administration had been true to the Heritage and Stabilisation Fund (HSF) the finance minister would have had that money at his disposal today.
Mahabir said during the gas boom years in early 2000 there was no major respect for the HSF. He told Imbert if his Government had been true to the HSF, he would have had $750 million in interest today which could have been used to settle the $500 million wage debt.
“Revenue could come from the interest earnings of the HSF,” he said. Imbert began his contribution by questioning the opposition’s rudimentary understanding of arithmetic and financial matters.
“Some fellas never run a Parliament in life but they want to make recommendations on macroeconomics.” Imbert said he had been listening to Opposition Senator Daniel Solomon earlier. He claimed because of excessive spending by the last government, the PNM inherited enough money to run the country for only a few days.
The country could have crashed in September if he did not access that $1 billion loan that was already secured by the last administration, he said.
He described Mahabir’s suggestion that the interest from the HSF could be used as revenue as “very interesting” and promised to get consensus on it. The HSF is a very emotional and sensitive subject and the country needs to talk about whether to leave it untouched or not. Imbert called on the population to come together and bring ideas to rescue the country. “You don’t have to be PNM,” he said.