The 2025 bud­get speech and the en­su­ing de­bate will gen­er­ate more talk­ing points and head­lines as a pre­cur­sor to the 2025 gen­er­al elec­tion cam­paign.

The con­sen­sus is that the speech was too long in its at­tempt to de­fend the record of the in­cum­bents. In­deed, the ti­tle of the speech, “Stead­fast and Res­olute: Forg­ing Path­ways to Pros­per­i­ty,” is more am­bi­tious than its con­tent. It flat­tered to de­ceive.

A fair sum­ma­ry of the speech is that things could have been worse giv­en the pre­vail­ing cir­cum­stances, and the dread­ed IMF has been avoid­ed.

In ef­fect, the speech in­di­cat­ed that the coun­try is in a hold­ing po­si­tion, wait­ing for elec­toral suc­cess or an uptick in the en­er­gy sec­tor from ad­di­tion­al gas to come from the Lo­ran Man­a­tee field and oth­er pos­si­ble de­vel­op­ments that could come from ac­cess­ing gas in the cross-bor­der fields with Venezuela or across the bor­der gas in Venezue­lan wa­ters.

The ad­min­is­tra­tion is putting the coun­try’s hope in the en­er­gy sec­tor. Hence the Prime Min­is­ter’s state­ment that the out­look will im­prove in 2027 when Lo­ran Man­a­tee comes on stream. In the in­ter­im, the coun­try must make do and tight­en their belts. This is the sub­text of the bud­get state­ment.

The coun­try is in a hold­ing pat­tern that will con­tin­ue to 2027 if things work out. Hence there will be no new tax­es in 2025, and util­i­ty rate in­creas­es will be post­poned for now. The fo­cus for next year will be elec­tions and the in­fra­struc­tur­al ex­pen­di­ture re­quired to give the im­pres­sion that the Gov­ern­ment is work­ing dili­gent­ly in the pub­lic in­ter­est.

The Fi­nance Min­is­ter was at pains to enu­mer­ate the projects and the ge­o­graph­ic ar­eas in which the projects were or will be un­der­tak­en. The coun­try has been down this road be­fore—an eco­nom­ic boom fol­lowed by a long pe­ri­od of stag­na­tion. New oil and gas dis­cov­er­ies and OPEC’s stran­gle­hold on en­er­gy sup­ply and prices brought about the first oil boom in 1974, which last­ed un­til 1985 as the coun­try ran down its re­serves to cre­ate a “soft land­ing.”

This was fol­lowed by a pe­ri­od of aus­ter­i­ty and a change in em­pha­sis, which put the coun­try on an ex­port-led growth path fu­elled by the non-en­er­gy sec­tor. The At­lantic LNG project in 1999 sig­nalled a turn­ing point and the be­gin­ning of a nat­ur­al gas-led boom, which con­tin­ued un­til 2014.

Since then, the coun­try has been in a hold­ing pat­tern. In 2022, the min­is­ter said that “… those who say we should aban­don oil and gas are not liv­ing in the re­al world.”

The prob­lem with that state­ment is that com­men­ta­tors have said that the coun­try should use the rev­enues from the hy­dro­car­bon sec­tor to tran­si­tion to re­new­ables and an econ­o­my that be­comes more com­pet­i­tive in re­sponse to the dis­rup­tive mar­ket forces of a rapid­ly chang­ing geopo­lit­i­cal world and less de­pen­dent on the en­er­gy sec­tor.

In this con­text, the em­pha­sis must be on pos­i­tive­ly chang­ing the econ­o­my’s in­ter­nal dy­nam­ic. The bud­get speech paid lip ser­vice to any move in this di­rec­tion.

The im­ple­men­ta­tion of the prop­er­ty tax and the in­ad­e­qua­cy of the pay­ment mech­a­nisms do not in­spire con­fi­dence. What change will the much-tout­ed Rev­enue Au­thor­i­ty bring if it is not sup­port­ed by a more ro­bust gov­ern­ment ar­chi­tec­ture?

Bury­ing our heads in the sand and kick­ing the can down the road is not a recipe for ei­ther change or suc­cess.