Express - August 27, 2000
By Raffique Shah
Finance Minister Brian Kuei Tung’s Budget presentation tomorrow should be quite an intriguing one.
The population has grown to expect bags of goodies and considerable generosity from all pre-election Appropriation Bills (the official title of the Budget), and this year it will be no different.
Already the rumour-mill is rife with “scores” from people who have “inside information” about old age pension moving up from $620 a month to $1,000. As usual, there is speculation that the income tax regime will be revised in favour of low and middle-income wage slaves, and the perennial hope that VAT will be removed from a number of basic items.
Frankly, none of these “goodies” interest me. I have learned the hard way that whatever government gives to citizens with one hand, it takes away with the other. So while I am always happy when pensioners get increases—the Basdeo Panday government has so far given them two increases—I pity the senior citizens when they discover that prices have marched past their increased incomes, and they are back to square one.
Regarding income and corporation taxes, governments always play games with wage slaves (people on fixed incomes). When they marginally reduce taxes, and marginally is the operative word here, most times employees find out that their “take home” pay is less than what obtained before the adjustments. Or if they do benefit, well, they can afford one extra “doubles” a day for lunch!
So I am not interested in what Mr Kuei Tung has in his Budget briefcase by way of “goodies”. My interest, and I want to suggest it should be the nation's interest as well, is to learn just how much extra revenue the country earned from high oil prices that have remained at an average of US$30 a barrel from as far back as last September when the Finance Minister premised his revenue and expenditure on a price of US$17 a barrel.
It has been publicly stated that for every US$1 increase in oil price this country earns an extra TT$100 million a year. For fiscal 2000, therefore, the Government should have earned $1.4 billion over the budgeted estimate of revenue from the oil sector.
At some point when oil prices crossed the US$25 mark, Mr Kuei Tung told the nation that the Government did not intend to touch one cent of the extra earnings. Instead, a special reserve fund would be created, he added, so that at the end of the fiscal year, presumably, a decision would be made on what to do with it. Bear in mind, too, that during his last Budget presentation, the minister spoke of a US$800 million cash surplus being held in reserve at the Central Bank.
And with a surfeit of foreign investors boarding us faster than we can accommodate them, the 2001 Budget should be smelling roses, permeating even the minister's expensive leather briefcase.
I suspect, though, that there will be lots of disappointed people come tomorrow. You see, prudent financial management has not been the hallmark of this government.
And when it comes to generosity, except for its wealthy friends and well-heeled financiers, it has been rather stingy. For example, even as Mr Kuei Tung takes centre-stage tomorrow, the country's sugar cane farmers who supplied more than 700,000 tonnes of cane during the last crop are still awaiting a final payment of some $55 million.
Why is a cash-laden government finding it difficult to meet this piddling sum for goods delivered since June?
Also, I wonder why the Government has refused to meet the demands by nurses and teachers for significant increases in salaries.
Back in 1986, when the NAR government came to power at a time when oil prices were under US$11 a barrel, and when, as the then prime minister ANR Robinson said, they met an empty Treasury, all public servants had their salaries slashed by 10 per cent.
Following on George Chambers's call for the nation to “tighten our belts”, the Robinson government imposed harsh measures on the citizenry because of low revenue streams. And this trend continued through the stewardship of the Patrick Manning administration, during which oil prices remained low.But now that we are swimming in oil dollars, one would think that those who sacrificed during lean times would enjoy some benefits. Teachers, nurses and other professionals in the public sector should be the first to get an ease from the burden they have been forced to bear for some 15 years. We have seen no signs of this.
Based on salary increases proposed by government and the infamous “Cabinet Committee” that oversees such matters at the level of those employed by government and at State enterprises, the magic figure seems to be nine-to-ten per cent increase over three years.
Why this Scrooge-like behaviour in the midst of plenty, at a time when, from the Prime Minister down to village activists for the ruling party, there are loud boasts about how well the economy is doing?
I suspect the answers to these puzzling questions lie in wanton wastage of public funds that has characterised this government.
So they spend up to $1 billion on an airport that should have cost half that figure. They frittered away close to $100 million on the Miss Universe pageant, but will not spend anything near that sum to acquire a new inter-island ferry to replace the MF Panorama, which has long outlived its usefulness.
And even as I write (and Kuei Tung gets ready to speak), they are paying road-paving contractors as much as $390 a tonne for asphalt mix, as compared with $190 a tonne that was the going price last year. Inncogen rakes in $89 million in one year—at the expense of T&TEC, which is compelled to buy power from the privately-owned plant.
Mr Kuei Tung should tell us, too, whatever happened to the highly touted National Enterprises Limited (NEL) that was mentioned in the last Budget as a potential source of revenue that relied on the sale of shares in NFM and TSTT.
He may also want to touch on government's extended borrowing from the Central Bank (they raised the limit to $600 million, I believe), which may account for the tight cash-flow situation that sees public sector workers being paid late on a regular basis, marginal increases being offered to unions, and a general stinginess that looms large in the midst of a season of plenty (oil dollars, I mean).
Like the calypsonian, I, too, have to ask: Kuei Tung, where the money gone?
I believe that's the crucial question the Finance Minister will have to answer tomorrow. No amount of financial footwork will exonerate him and the Government if, as happened during the last oil boom in the mid-1970s, the increased revenue flowed through the country like Michael Manley's proverbial “dose of salts”.
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Copyright © Raffique Shah
