Home' Trinidad and Tobago Guardian : September 12th 2013 Contents SEPTEMBER 2013 • WEEK TWO www.guardian.co.tt BUSINESS GUARDIAN
NEWS | BG7
There is a suggestion that the
People s Partnership needs
to come out of deficit
financing at a faster pace,
said Conrad Enill, former
minister in the Ministry of
Speaking to Business Guardian on Tuesday
at the T&T Chamber of Industry and Com-
merce s post-budget panel discussion at
Port-of-Spain s Capital Plaza Hotel, Enill
said deficit financing can have negative reper-
cussions for future generations and steps
should be taken to expedite the process.
"The deficit financing issue has more to
do with, in my mind, with tailoring expen-
diture and that is something that (the Gov-
ernment) needs to deal with urgently because
what you are doing is that you are picking
up a burden for future generation. We need
to move to a more balanced budget a lot
In delivering the budget on Monday, Howai
said, "The Government is successfully con-
taining the fiscal deficit in accordance with
its policy objectives and is on course to bring
the fiscal accounts into balance by 2016.
"I am projecting a fiscal deficit of $6.357
billion or 3.6 per cent of GDP, down from
the 4.6 per cent in the FY2013 budget."
Enill said the People s National Movement
administration struggled to balance the
"We struggled with it (to achieve a bal-
anced budget) because we understood that
you needed a timeframe of two years while
other measures kicked in, (such as the Rev-
enue Authority, property tax). Those meas-
ures should have increased the revenue and
remove the period of time which deficit
financing would have been required."
Asked whether he believed the Govern-
ment played politics with the budget, Enill
said: "I think it is a budget; whether anything
has happened, whether we (the People s
Partnership) have done it or not, we (the
People s Partnership) are taking credit for
it."Enill said taking credit for certain accom-
plishments is something which the Gov-
ernment would do and "they are entitled
to it since they are in power," he said.
Referring to the measures for the energy
sector, Enill said T&T has a 100-year history
in oil and gas, but no longer has the advan-
tage of low cost production.
This means "that the minister has to
incentivise people for them to get involved
in production so, yes, I think they are appro-
priate (the incentives), but I think we need
to look at other sources of revenue."
Enill said in order for diversification to
occur there needs to be:
• an entrepreneurial plan
• a friendly financing mechanism
• removal of the bottlenecks taking place
in such agencies as the Board of Inland Rev-
Ease of doing business
He said there is need to put an environ-
ment in place that reflects an ease in doing
"The method at which we are looking
at diversification has to change a little bit."
In the budget, Howai said this about the
energy sector: "We must remain compet-
itive if we are to attract new investments
in particular, from existing long-established
players. We propose to expand the energy
incentive taxation regime in this year s
"I propose to introduce a number of new
incentives with effect from January 1, 2014,
which will stimulate further exploration
and development-related investments in
the energy sector."
Regarding the petroleum tax, Howai said
the revenue earned from this may be
West said several of the measures outlined
in the budget need to be clarified. Referring
to the tax incentives for small and medium
enterprises (SMEs), West said does not pre-
dict the incentives would encourage SMEs
to list on the T&T Stock Exchange.
"The privately owned companies prefer
to remain privately owned and giving them
tax relief in the form that was presented,
I don t think it would achieve the objec-
Regarding measures dealing with cor-
poration tax, she said there were few meas-
ures in place.
"When we take ad hoc knee-jerk reac-
tions to issues about the Board of Inland
Revenue, you tend to ignore the wider issue
and so you solve one problem and create
"We really need a comprehensive review
of the system to properly determine what
loopholes have to be plugged, what con-
cessions the Board of Inland Revenue needs
to implement and how the system would
work best to achieve the objective through
the board to make things easier for the
A balancing act
"Achieving a balanced budget should
always be the aim, but "we need to do that
in the context of ensuring that the pro-
grammes that we have to put in place to
encourage development are, in fact, imple-
mented. That has been a problem we ve
had in the last year or so," West said.
Measures in the energy sector helps create
more simplicity as "it escalates the incen-
tives that they get, so I think it would be
beneficial to the stakeholders in the energy
sector," she said.
Addressing the issue of agriculture, West
said the Government previously attempted
to give incentives to encourage farmers to
get involved in agriculture and "it had not
"I think that Tucker Valley Programme
and the Caroni Green Programme are
showing success. What they have done is
create a structured programme for people
who are interested in farming rather than
giving widespread incentives and hoping
that people would be drawn to them."
She expressed concern about education
being allocated more than national security,
and questioned whether T&T is getting
value for money when it comes to the edu-
"I am seeing measures being mentioned,
but we are not moving forward," West said.
The main objective of the budget for fiscal
year 2013 to 2014 is the continued growth of
the economy, said Finance Minister Larry Howai.
This comes after the economy has recorded
positive economic growth in the last four con-
"Our goal was to continue the growth momen-
tum, which means there was a substantial
emphasis on the energy sector and continuing
to grow the upstream sector. One of the chal-
lenges we found is that some of the difficulties
in expanding the downstream is the new investors
are comfortable with the relatively lack of growth
in the reserves of the country as far as natural
gas is concerned. It is very important that we
do not dislocate that sector while we deal with
the other sectors."
He presented a record budget of $61.4 bil-
Howai was speaking on Tuesday at a post-
budget forum hosted by the T&T Chamber of
Industry and Commerce at Capital Plaza
He said there has been an increase in direct
foreign investment coming into T&T over the
"It moved from less than $1 billion around
2010 to $2.5 billion last year, and we expect that
number to pick up as we go into next year."
He said another main pillar of the budget is
further diversification of the economy and cre-
"How do we get good quality customer service
to our hospitals and getting pensions on time?
And we have started to some things on time,
like direct credits to accounts and so on, and
those things are helping. It does not change the
culture of the country. The entire culture of the
country needs to move towards a service culture
and to get away from the misunderstanding that
service means servitude."
He elaborated on the CEPEP programme
which, he admitted, he should have spoken more
of in the budget.
"We had two job fairs last year with a view
from transitioning people from the programme
to the private sector. But the programme was
not successful as we identified only about four
per cent of people from CEPEP who could have
been transitioned into the private sector. That
required some revisiting for dealing with this."
Tax expert calls for more info
Allyson West, tax partner, PricewaterhouseC-
oopers (PwC), in a post-budget printed PwC doc-
ument, said she is "disappointed" the country is
no closer to understanding how the property tax
will affect people s pockets and how it differs
from the recommendations of the previous gov-
"It is evident that further information needs
to be provided regarding when and how the tax
system will be revamped and how the tax system
will be enhanced."
She said once again the Ministry of National
Security received a large budget allocation, yet
insufficient detail was given on how the "burning
issue of crime" will be addressed.
"It is hoped that the recently-appointed Nation-
al Security Minister Gary Griffith will provide
insight into the long-awaited crime plan and
give us some measure of comfort that there is
light at the end of this particular tunnel," West
FDI moved from $1b
in 2010 to $2.5b
former minister in the
Ministry of Finance.
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