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Monday, February 24, 2025

Economist: Ministries with high budgets must account for poor performance

by

147 days ago
20240930
Economist and former independent senator Amrita Deonarine

Economist and former independent senator Amrita Deonarine

VASHTI SINGH

Lead Ed­i­tor—News­gath­er­ing

ryan.ba­choo@cnc3.co.tt

Econ­o­mist and for­mer in­de­pen­dent sen­a­tor Am­ri­ta De­onar­ine says con­cerns about min­istries which re­ceive large al­lo­ca­tions, such as the Ed­u­ca­tion Min­istry and the Na­tion­al Se­cu­ri­ty Min­istry, but which are per­ceived to be hav­ing lit­tle im­pact is a valid one for the pop­u­la­tion.

De­onar­ine, who served in the Sen­ate be­tween 2018 and 2023 and ap­peared on CNC3’s The Big In­ter­view pro­gramme last night, said a “clear ex­pla­na­tion” needs to be giv­en go­ing for­ward about how much of the monies al­lo­cat­ed is go­ing to­wards re­cur­rent ex­pen­di­ture and what is go­ing to­wards de­vel­op­men­tal ex­pen­di­ture.

She said, “I do not be­lieve we should be cut­ting back, but at the same time we need some sort of trans­paren­cy as to why we have not been see­ing, or the en­tire pop­u­la­tion have not been reap­ing ben­e­fits from this ad­di­tion­al in­vest­ment in­to both the Ed­u­ca­tion Min­istry and al­so the Min­istry of Na­tion­al Se­cu­ri­ty.”

Last year, the Health Min­istry re­ceived the biggest slice of the bud­get at $6.4 bil­lion. The Ed­u­ca­tion Min­istry re­ceived 6.1 bil­lion while the Na­tion­al Se­cu­ri­ty Min­istry was al­lo­cat­ed $2.7 bil­lion.

Last year’s bud­get al­so pro­posed a to­tal rev­enue of $54 bil­lion and a to­tal ex­pen­di­ture of $59.2 bil­lion, with a deficit of $5.197 bil­lion.

Fi­nance Min­is­ter Colm Im­bert, will to­day de­liv­er his tenth na­tion­al bud­get pre­sen­ta­tion.

De­onar­ine said since 2015 to the present, the econ­o­my has been un­der­go­ing “fis­cal con­sol­i­da­tion,” which is cut­ting ex­pen­di­ture and try­ing to man­age less rev­enue.

Last Fri­day, UNC leader Kam­la Per­sad-Bisses­sar, crit­i­cised the Dr Kei­th Row­ley-led Gov­ern­ment for dip­ping in­to the Her­itage and Sta­bil­i­sa­tion Fund (HSF) ten times over the last nine years.

De­onar­ine said while the HSF is one con­tin­gency plan, it should on­ly be looked at as a con­tin­gency plan for the short term.

She said it can­not be ig­nored how im­por­tant the buffers of the HSF were dur­ing the COVID-19 pan­dem­ic, not­ing that as a re­sult of this, T&T was not hit as hard as oth­er coun­tries. She said the pub­lic debt could have been a lot high­er than what it is right now (as of the sec­ond quar­ter for 2024 it stood at 74 per cent of GDP) had it not been for the HSF buffer.

She said the cost of liv­ing is al­so set to be a key theme to look out for dur­ing the min­is­ter’s pre­sen­ta­tion to­day. De­onar­ine said the im­pact of high­er food prices on house­holds across the coun­try is due to their in­come lev­els be­ing very low. She re­called two bud­gets ago when the Fi­nance Min­is­ter an­nounced an in­crease in the in­come tax thresh­old which was set to ben­e­fit 300,000 peo­ple in the labour force. She al­so not­ed the in­crease in min­i­mum wage last year which ben­e­fit­ed 190,000 peo­ple.

“Bear in mind our labour force is 609,000 per­sons, so if you run the num­bers, you would see that re­al­ly and tru­ly, less than 20 per cent of the labour force is earn­ing a salary above $7,500 and that is a cause for con­cern,” De­onar­ine ex­plained.

She al­so ques­tioned the method­ol­o­gy be­ing used to cal­cu­late in­fla­tion. Sta­tis­tics show in­fla­tion has de­creased from 8.5 per cent in 2022.

“The in­fla­tion method­ol­o­gy that is used right now is based on an out­dat­ed bas­ket of goods based on a house­hold bud­getary sur­vey way back in 2008, so I think there is some un­der-rep­re­sen­ta­tion of the true lev­el of in­fla­tion in the coun­try, and there­fore, this is why we see this sort of mis­match be­tween the met­rics that are be­ing giv­en and what we are hear­ing from the pub­lic.” De­onar­ine said it al­so needs to be con­sid­ered that the wages of the labour force are on the low­er end.

She said the Gov­ern­ment must al­so take in­to con­sid­er­a­tion the chal­lenges the non-en­er­gy man­u­fac­tur­ing and pri­vate sec­tors are fac­ing and come up with so­lu­tions.

She ex­plained, “What we need to do is cre­ate jobs. We know the pub­lic sec­tor can­not cre­ate those jobs be­cause they al­ready have a very fat pub­lic sec­tor wage bill. We need to en­cour­age the pri­vate sec­tor to cre­ate those jobs, but is the pri­vate sec­tor in­cen­tivised to do so?

“We need to un­der­stand what are the chal­lenges that they are fac­ing if we are to ex­pect them to ex­pand growth and cre­ate jobs. We need to un­der­stand the busi­ness en­vi­ron­ment that they are deal­ing with and ad­dress those chal­lenges to get to a point where we can see mean­ing­ful growth tak­ing place.”

Fi­nance Min­is­ter Im­bert is sched­uled to de­liv­er the bud­get pre­sen­ta­tion at 1.30 pm to­day.


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