The Government is continuing its economic approach for next year that it started during the last budget, said Norman Sabga, chairman and chief executive of the ANSA McAL Group.
Sabga, along with other business executives, gave their views on the budget in Ernst and Young's budget brochure.
"We note that the minister has maintained the overall economic strategic approach of the 2014 budget, while focusing on the immediate tactical initiatives for fiscal 2015 that are important to maintain the growth velocity of the local economy," Sabga said.
On Monday, Finance Minister Larry Howai presented the Government's $64 billion budget, which is the last of the Government's five-year term.
Sabga said there is also significant focus on the potential of the non-energy sectors and, in particular, the reference to the manufacturing sector by the Finance Minister.
"Over the last five years, we have made significant investments to upgrade our manufacturing facilities and install state-of- the-art plants where we see the opportunity to grow our market share at home and compete favourably in export markets. We see this as crucial to achieve the economies of scale that will generate acceptable rates of return on our investments and deliver both world-class products to our customers and consistent returns to our shareholders," he said.
Sabga said measures in the 2015 budget, such as continued investment in infrastructure development, should contribute to the reduction of non-value added cost inputs to industry and the manufacturing sector vital to support the drive for competitiveness.
On the issue of the Government having raised the minimum wage from $12.50 to $15 an hour, he said most employees of the ANSA McAL Group are already paid above the minimum wage.
"The proposed increase of the minimum wage to $15 per hour will not have a directly adverse impact on our costs as most of our workers are paid above the minimum wage, but the increase may be considered counterintuitive in an already tight and competitive labour market. Perhaps an increase more directly correlated to productivity would send a positive signal to the labour market without eroding our national competitiveness," he said.
Bold measures to tackle crime
Christian Mouttet, chief executive officer of Victor E Mouttet Ltd, was happy to see the issue of infrastructure and agriculture dealt with.
"On the positive side, it is encouraging to see the continued investment in infrastructure, particularly in the developments of an expanded and improved road network and improved water supply–both critical to the development of a modern and efficient economy.
"Positive also has been the focus on improvements in agriculture and the continued investment and incentives that the Government proposes in a sector far too long neglected. Also, the apparent increase of public/private partnerships in various areas of the economy must be commended," he said.
He said there were a lack of initiatives in the decline on the country's productivity and crime.
"Without attempting to be overly dramatic, the labour market in T&T is in crisis. We are plagued by consistently low and falling productivity, labour scarcity and high absenteeism. The State's continued funding, without any apparent plan for rationalisation of the CEPEP and URP programmes, are a major contributor to this, and must be addressed if the private sector is to grow and be competitive."
He called the level of crime "outrageous."
"In the area of crime, while the construction and refurbishment of police stations are welcome initiatives towards improved policing, tackling the growing and dire crime environment requires not incremental measures, but bold and radical initiatives that seek to have a dramatic impact on crime, especially homicides. There is simply no excuse for the outrageous level of violent crime in a nation of our size and financial resources."
The positives and negatives
Anya Schnoor, country head, Scotiabank T&T Ltd, in her commentary on the budget, gave both positive and negative assessments.
The positive aspects:
1. Reduction in the projected budget deficit as a percentage of GDP to 2.3 per cent from 3.6 per cent last year.
2. Continued strengthening of the financial sector and the proposed implementation of legislation to regulate credit unions.
3. Continued focus on anti-money laundering compliance and initiatives to improve counter terrorism financing activities through new legislation and the establishment of a commission on gaming.
4. Attempts to improve the avenue for savings through the introduction of proposed savings bonds and increases in the limits for contributions to registered annuities.
5. Continued efforts to divest state enterprises which will provide opportunities for alternative forms of investments.
Greater focus is needed on:
1. Bringing long-awaited legislation to Parliament, notably the new Insurance Act and the Proposed Procurement Bill.
2. Improving the ease of doing business and the productivity of the public sector.
3. Diversification of the economy away from energy-based sources.
4. The balance between expenditure on short-term social programmes and long-term infrastructural projects which will generate sustainable growth.
Minimum wage eroding productivity
The T&T Manufacturers' Association (TTMA) gave its views on sectors ranging from agriculture to legislation to labour issues.
On procurement legislation, the TTMA said: "Given our ongoing interest in having a transparent procurement framework, the association is pleased to learn of the Government's intention to develop an Office of Procurement Regulation. However, we observe that no clear mention was made regarding the expected date for its establishment. Notwithstanding, we look forward to this being put in place before the end of 2014, along with sufficient provisions for local content.
On the minimum wage, the TTMA said: "We note that the minimum wage is expected to increase by 20 per cent from January 2015. We are concerned that in the absence of a commensurate increase in productivity, there will be a negative impact on inflation and on our local manufacturers' competitiveness. Furthermore, we would like to see a recommissioning of the National Productivity Council, with a new mandate to oversee the measurement of productivity in the country."
On the agriculture sector, the TTMA said: "The association further welcomes the provision of rebates on the cost of refurbishing approved facilities for agro-processing, but would prefer to see this being made available for the entire food and beverage sector, inclusive of the input suppliers. TTMA further acknowledges and welcomes the establishment of subsidies for testing services to assist manufacturers in producing quality products.
Working closely with foreign investors
The Energy Chamber of T&T said after four years of significant fiscal reforms in the energy sector, the fact that this budget presentation offered no additional amendments to the fiscal regime governing the energy sector comes as no surprise.
The chamber said the reform undertaken in prior years held the promise of large proposed investments of US$3.3 billion, US$3.2 billion and US$2.8 billion for years 2014, 2015 and 2016, respectively.
"We must not, however, become complacent and take for granted the willingness of the energy companies to continue to invest in T&T. We must continue to work closely with these investors to ensure that there is a proper balance, whereby the objectives of both the Government and investors are met. All in all, the outlook for the sector, and, by extension, the country, is very positive."
