There is lit­tle doubt that a ma­jor fac­tor in the over­whelm­ing vic­to­ry of Unit­ed Na­tion­al Con­gress (UNC) at the April 28, 2025 gen­er­al elec­tion was the par­ty’s promise to im­prove the stan­dard of liv­ing of the pop­u­la­tion. By that, I mean the UNC con­vinced enough vot­ers that if it was vic­to­ri­ous at the poll, their dis­pos­able in­comes would in­crease.

First­ly, the po­lit­i­cal par­ty was able to con­vince the pop­u­la­tion that their dis­pos­able in­comes would in­crease by its ex­treme­ly ef­fec­tive cam­paign slo­gan and song “If UNC wins, every­body wins.”

That slo­gan and song was backed up by a wide range of promis­es made dur­ing the cam­paign, in­clud­ing:

* Re­duce the price of food by re­mov­ing the val­ue-added tax (VAT) on 7,000 ba­sic items;

* Low­er the price of fu­el, by in­creas­ing the sub­sidy on the com­mod­i­ty;

* Elim­i­nate the prop­er­ty tax;

* Re­move the 7 per cent on­line tax;

* Low­er cor­po­rate tax­es by 5 per cent ini­tial­ly;

* Can­cel tax­es on re­tire­ment ben­e­fits and pri­vate pen­sions;

* No in­creas­es in elec­tric­i­ty and wa­ter rates;

* Re­open the Pointe-a-Pierre re­fin­ery, which it was ar­gued would lead to thou­sands of high-pay­ing jobs in ar­eas south of the light­house; and

* In­crease the com­pen­sa­tion of pub­lic sec­tor em­ploy­ees by no less than 10 per cent.

Those nine promis­es were enough to con­vince a ma­jor­i­ty of the vot­ing pop­u­la­tion—es­pe­cial­ly along the east-west cor­ri­dor and in the con­stituen­cies of La Brea and Point Fortin—that their lives would im­prove if the UNC won.

Eco­nom­ic re­al­i­ties

What many of those who vot­ed for the UNC did not, and do not, re­alise is that the cur­rent eco­nom­ic re­al­i­ties of the T&T econ­o­my sim­ply do not al­low the im­ple­men­ta­tion of most of the promis­es made by the par­ty dur­ing the elec­tion cam­paign.

T&T’s cur­rent eco­nom­ic re­al­i­ties in­clude: oil and nat­ur­al gas pro­duc­tion that has plateaued; low­er for­eign ex­change rev­enue; an econ­o­my that has spent more than it has earned in 16 of the last 17 fi­nan­cial years; bal­loon­ing debt and de­clin­ing for­eign re­serves.

This coun­try’s eco­nom­ic re­al­i­ties sim­ply do not al­low this ad­min­is­tra­tion to con­tin­ue trans­fer­ring an av­er­age of $30 bil­lion a year to the pop­u­la­tion to pay for sub­si­dies on elec­tric­i­ty and wa­ter, “free” health­care and ed­u­ca­tion, low-cost hous­ing, be­low-cost in­ter­nal and in­ter-is­land trans­port, as well as the many grants re­ceived by peo­ple at the low­est end of the in­come tri­an­gle.

New­ly elect­ed Prime Min­is­ter Kam­la Per­sad-Bisses­sar came face to face with the re­al­i­ties of the T&T econ­o­my when she ad­dressed the first post-Cab­i­net news con­fer­ence of her sec­ond term of of­fice at T&T’s Par­lia­ment last Thurs­day.

At that news con­fer­ence, Mrs Per­sad-Bisses­sar ref­er­enced the most cash flow state­ment for T&T, which she said pro­vid­ed an up­date of the sta­tus of the gov­ern­ment fi­nances.

“In April 2025, just last month, to­tal cash in­flow was es­i­mat­ed at $3.95 bil­lion and to­tal cash out­flow was es­ti­mat­ed at $5.28 bil­lion. What is that telling us? The out­flow is more than in­flow, so we have a deficit.

“That was met in April from the Cen­tral Bank’s avail­able over­draft cash bal­ance. By the end of April the avail­able over­draft cash bal­ance was $3.6 bil­lion, of which $2.7 bil­lion was car­ried for­ward to May 2025....

“It should be not­ed, how­ev­er, that there was an out­stand­ing bal­ance of un­paid cheques val­ued at $500 mil­lion, which was al­so car­ried for­ward to May.

“Cash in­flows for May, from the var­i­ous rev­enue sources of the gov­ern­ment, es­ti­mat­ed $2.38 bil­lion. How­ev­er, it is es­ti­mat­ed that the cash over­flow will be around $6.3 bil­lion, re­sult­ing in a cash deficit po­si­tion of $3.92 bil­lion this month.

“Worse, if all the un­paid cheques in the sys­tem were pre­sent­ed for pay­ment, this would add a fur­ther $500 mil­lion to the deficit for the month of May. This would then take our to­tal deficit in this month to (an es­ti­mat­ed) $4.42 bil­lion.”

On sev­er­al oc­ca­sions dur­ing the news con­fer­ence, Mrs Per­sad-Bisses­sar said what the new ad­min­is­tra­tion found, when it re­quest­ed an up­date on the fi­nan­cial po­si­tion of T&T, “is not sur­pris­ing. It is a re­al­i­ty check to know where we are.”

The re­cent­ly elect­ed Prime Min­is­ter said, “While we give you the re­al­i­ty of the sit­u­a­tion, we will fix it. We have the plans, we have the poli­cies and, above all, we have the willpow­er to fix this (ap­plause from the Cab­i­net min­is­ters and par­lia­men­tary sec­re­taries sur­round­ing her).

“And this is what we had warned about in the en­tire elec­tion cam­paign. That is why I am telling you to­day I am not sur­prised and you should not be sur­prised. We said they had drained the Trea­sury. We knew that com­ing in so we are not caught by sur­prise. We were ready with the plans, poli­cies and pro­grammes to fix it and fix it we will.”

Fix­ing the prob­lem

Mrs Per­sad-Bisses­sar said the gov­ern­ment pro­posed to fi­nance the es­ti­mat­ed $4.42 bil­lion deficit for the month of May by do­ing the fol­low­ing:

1) Draw down on the avail­able $2.7 bil­lion in the over­draft fa­cil­i­ty at the Cen­tral Bank;

2) Re­fi­nance the en­tire­ty of the $1.1 bil­lion in Trea­sury Bills “to leave some breath­ing space, with the bal­ance in the over­draft.”

3) With­draw $1.76 bil­lion (US$260 mil­lion) from the Her­itage and Sta­bil­i­sa­tion Fund (HSF);

4) Bor­row an ad­di­tion­al $1 bil­lion.

Ques­tions:

—If Mrs Per­sad-Bisses­sar says she was not sur­prised by the state of the econ­o­my, and es­pe­cial­ly the fis­cal deficit, which she said the UNC had pre­dict­ed would be $11 bil­lion for fis­cal 2025, why did she al­low her cam­paign to fo­cus on promis­es that she must have known the coun­try could not af­ford?

—If the coun­try has a rev­enue prob­lem, why is the cur­rent ad­min­is­tra­tion re­peal­ing the Trinidad and To­ba­go Rev­enue Au­thor­i­ty Act?

—When she talks about in­creas­ing rev­enue, why does the prime min­is­ter con­tin­ue to ref­er­ence the de­vel­op­ment of nat­ur­al gas prospects in Grena­da, Guyana and Suri­name, when she must know that with the best ef­forts, rev­enue from those sources is at least 10 years down the road?

—While the prime min­is­ter out­lined the gov­ern­ment’s im­me­di­ate plans to ad­dress the fis­cal deficit, that is un­til Sep­tem­ber 30, 2025 end of the fis­cal year, what are the gov­ern­ment’s “plans, poli­cies and pro­grammes” to ad­dress the im­bal­ance be­tween rev­enue and ex­pen­di­ture in the 2026 bud­get and be­yond?

—Does Mrs Per­sad-Bisses­sar know that there is a lim­it to the abil­i­ty of T&T to con­tin­ue fund­ing fis­cal deficits by bor­row­ing, with­draw­ing monies from the HSF and re­fi­nanc­ing Trea­sury Bills that are rolling over?

—Have the mem­bers of the cur­rent ad­min­is­tra­tion ever stopped to ask them­selves why the Peo­ple’s Na­tion­al Move­ment did not come close to match­ing the UNC’s promis­es?

Fi­nal­ly, a point was made to me last week, that the cur­rent ad­min­is­tra­tion has a three-year win­dow in which it can con­tin­ue to bor­row, with­draw funds from the HSF, and sell state as­sets to fund T&T’s peren­ni­al fis­cal deficit po­si­tion.

That may be true, but there is a point be­yond which no com­mer­cial banks in this coun­try will lend the gov­ern­ment mon­ey. That is be­cause their loan port­fo­lios are over­ly con­cen­trat­ed on GORTT debt or it has be­come too risky to do so.

In my view, it is much bet­ter for the cur­rent ad­min­is­tra­tion to come clean with the pop­u­la­tion, in­di­cate that most of the cam­paign promis­es can­not be fi­nanced in the next five years and tell peo­ple the truth that it is time to tight­en our belts.