Finance Secretary for the Tobago House of Assembly Joel Jack presented on Monday, what is now his eighth consecutive budget.
In his presentation, Jack is requesting of the Minister of Finance, an allocation in the 2021 national budget of $4.71 billion. This includes $3.07 billion for recurrent expenditure and $1.5 billion for the Development Programme.
Under the political and economic arrangements the Finance Secretary of the THA has to present his annual budget to the Tobago legislature and after its approval, it is sent to the Minister of Finance for consideration as part of the national budgetary process.
The Minister of Finance then has to provide the THA with a minimum portion of the national budget in keeping with Act 40 of 1995.
Mr Jack’s budget is not dissimilar from what he has done over the years. It is a budget that is reliant on government playing a major role in the economy with little or no plans for transforming Tobago’s economy into one that is driven by the private sector.
I know Tobagonians often see it as an affront for non Tobagonians to speak on what is happening on the island, especially if you do not live there and was not born and grew up on the island. But that aside since the resources that are sent to Tobago emanate from the pockets of both Tobagonians and Trinidadians and the natural resources of the country, we have to critically examine the use of public funds and what is being done on the island to increase revenue and make it more sustainable.
It is in this context that Mr Jack’s budget continues to fail Tobagonians and the taxpayers of T&T.
By his own admission, the THA accounts for 44 percent of the total GDP of the island. It employs almost two-thirds of those working in Tobago and crowds out the private sector.
Jack told the Assembly on Monday: “The data indicate that the share of government activity in Tobago’s GDP was about 44 per cent in 2019, and the share of financial services was about 26 per cent in the same year. Madam Presiding Officer, the tourism sector accounted for about 13 percent of Tobago’s GDP in 2019.”
Only recently I said in this column that contrary to the narrative that has been pushed by the present administration and the THA, tourism is not the driving force behind the Tobago’s economy. It is in fact the annual budgetary allocation from the Central government. Mr Jack’s own numbers tell part of the story.
You see as I have argued, Tobago has done well politically. It has made itself crucial to any PNM victory in the election and it has done so while at the same time showing the PNM its votes are never guaranteed. This has resulted in PNM Prime Ministers, led by the late Patrick Manning having a mantra that said Tobago gets what Tobago wants. This of course is not afforded to the people of La Brea, Point Fortin, Mayaro, or even Laventille.
It may be fine to give Tobago what it wants but in giving one receives and what does the country receive in return for the billions spent directly in Tobago.
Blessed with natural beauty, still relatively untouched, Tobago has regressed over the last 15 years in its attempt to be a tourism destination.
Its international arrivals have fallen by more than 70 percent. It has not been able to attract major brand hotels, its service leaves a lot to be desired, and had it not had the benefit of visitors from Trinidad, its entire tourism sector would have collapsed.
Among the myriad of problems identified in tourism on the island are poor service, insufficient airlift, particularly from some source markets, limited destination marketing, insufficient high-quality rooms.
The 2021 budget as presented by Mr Jack does nothing to address those issues. It is disappointing that the THA, which is responsible for funding the operations of the Tobago Tourism Agency, the body set up to market and manage Tobago’s tourism product would only seek $235 million for Tourism/Transport and culture. A mere 5 percent of what he wants from the Minister of Finance in the next budget. It is a clear indication of where Jack’s head is at.
Tobago has the potential to be a premium destination but unless you are prepared to develop the destination, including spending money on marketing, you are unlikely to be successful.
But you see the THA does not have a real vested interest in the tourism sector. Why should Jack et al worry about tourism? The THA employs most of the people on the island. The sector contributes little in terms of taxes to the THA’ coffers, it does not benefit from major foreign exchange earnings from the sector and it allows for significantly more power if you can keep those employed beholden to you.
Jack told the Assembly: “Not surprisingly, the largest decline is expected in the tourism sector, followed by the manufacturing sector and the financial sector. Comparatively, the state sector is forecast to grow, as government expenditure is buoyed by social welfare spending on relief programmes.
Likewise, the agricultural sector is projected to grow moderately, aided in part by various initiatives aimed at boosting agricultural production on the island.”
The COVID-19 pandemic has magnified the role of government in societies and the role of agriculture. The THA is moving to further expand government services if we are to extrapolate from Mr Jack’s presentation.
Bless with some of the most arable soil in the country, Tobago was once a major producer of food for the country. The advent of big government and to some extent tourism, helped people on the sister isle walk away from the land.
With the COVID-19 pandemic and the reality that this country has to improve its food security, there is now a greater focus on agriculture. It is to Jack’s credit that he is proposing a ramp-up in agriculture spending. But spending alone will not do it and for now we must give the Assembly time to flesh out a coherent plan for agriculture on the island.
I however want to commend the Finance Secretary for his announcement of a plan to have reputable private auditors assess the operations of the THA. For too long, and with too many examples of profligate spending, the THA has been the poster child for lack of transparency in the use of taxpayers’ funds.
This may be a start but it is one that must be welcomed so that the THA could prove it has spent taxpayer’s money with due diligence because as my Tobago relatives will say: “even though mih ah wha hungry cock, mi nah ah eat rutten corn.”