Home' Trinidad and Tobago Guardian : January 11th 2018 Contents view BG3
Thursday, January 11, 2018
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or the second year in a row,
Prime Minister Keith Rowley
stood before the nation on
Sunday night to deliver what
has effectively become his
T&T-fashioned “State of the
Though lacking the same flair and fire of
his American counterpart, the Prime Min-
ister spent more time than necessary in his
45-minute discourse essentially telling the
country much of what it already knows.
Yes, Mr Prime Minister, we know the
economy is bad.
Yes, Mr Prime Minister, we know energy
sector revenues are down (more on this
shortly) and that the government has lim-
ited room to manoeuvre as a result.
And finally, yes, Mr Prime Minister we
know what you “met” when you and your
team entered office in 2015—you’ve re-
minded us on several occasions over the
last 28 months of your term in office.
Sure this can be considered as setting
the context but, truthfully, there was no
real need for repetition for emphasis. That
said, the Prime Minister did, however, do
a remarkable job of balancing reality with
the smoke and mirrors of politics. The un-
initiated in the art of political misdirection
might have been ensnared, but fortunately,
a few of us are initiated.
In spite of some general perceptions
about “inaction” on the part of the Rowley
administration, the government has done a
fairly decent job of creating somewhat of a
soft landing for the T&T economy given the
The fact that the government has been
able to largely avoid massive dislocation
in the public service—the largest employer
in the country—and that many social and
health service subsidies have remained un-
touched thus providing some relative buff-
ers (if only artificially) for the lower income
earners in society, while still being able to
shave $11 billion off of fiscal expenditure in
the last two year is no easy task.*
Further, the higher taxes levied on banks,
casinos and other high-income earners,
along with the petroleum royalty and other
low-hanging fruit such as the property tax
and T&T Revenue Authority prove to be rea-
sonably balanced moves aimed at “sharing
the burden” around, and providing some
additional income to the state.
Certainly these accomplishments do not
imply that the government has achieved
them seamlessly. After all, many of the ser-
vices offered by the State (ie inter-island
ferry, public healthcare) remain in sham-
bles and paying outstanding wages to public
servants along with other fiscal obligations
has proven to be quite a challenge for the
But, all in all, the patient has been stabi-
lised. Kudos for that.
Smoke and mirrors
There is, however, a tremendously de-
ceptive aspect to some of the rhetoric of the
In the first instance, the Prime Minister’s
proclivity for listing “development projects
completed and/or in progress” is a great
example of misdirection for one simple
reason: how will these projects, as a form
of significant capital expenditure, end up
yielding any revenue for the State?
Sadly, many will not or ever. In fact, most
will drain the fiscal coffers in the long run.
For example, the building of new hospitals,
community centres, sporting facilities and
police stations may provide some with a
“warm and fuzzy” feeling about a “caring”
government, but they will require signifi-
cant maintenance expenditure and given
the history of governments maintaining an-
ything in T&T, one can almost predict the
Additionally, there seems to be an un-
healthy obsession with building things
for the sake of simply doing so. Perhaps it
would be wiser for the government to sim-
ply remedy its current stock of capital as-
sets than to create new ones.
gain, any businessman
worth his salt will tell you
that capital expenditure
should be channelled to-
wards areas that will earn
income in the future. Per-
haps the government sees this differently.
The other area of smoke and mirrors
involves a bit of technical assessment of
circumstances in the energy sector. The
constant refrain by the prime minister
about revenue from the sector “declining
by over 90 per cent” is a bit of a ruse. What
has taken a sharp hit is the government’s
take from Petroleum Profits Tax (PPT), but
overall, energy sector revenues (royalties,
dividends from NGC, Corp Tax from NGC
and Atlantic and production sharing con-
tract transfers to the Ministry of Energy)
have not fallen by 90 per cent.
In fact, if one looks at figures on energy
sector revenue as published by the Ministry
of Finance Budget Division’s Review of the
Economy **, a smaller drop is recorded. So
while saying a “90 per cent drop in reve-
nues from the energy sector” might make
an interesting sound-bite, saying it over and
over again doesn’t make it true.
In the final analysis, one can only expect
a politician to be a politician after all.
In 2018 however, with issues such as
Petrotrin and forex (among others) waiting
to be resolved, real tests of political forti-
tude are more likely to manifest themselves.
*One can argue though, that realistically,
the economy should have been functioning at
its current $52 billion level of fiscal expendi-
ture and that the additional $11 billion repre-
sents an “unnatural state of waste” that could
have been easily culled anyway.
** For 2015; $19 billion
For 2016; $8 billion
For 2017; $9 billion (est.)
Prime Minister Dr Keith Rowley during a sitting of the House of Representatives at the
Parliament Building in Port-of-Spain.
There seems to be an unhealthy obsession with building things for the sake of simply doing so. Perhaps it would
be wiser for the government to simply remedy its current stock of capital assets than to create new ones.
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