With Gov­ern­ment abol­ish­ing the Rev­enue Au­thor­i­ty (TTRA), promis­ing to elim­i­nate prop­er­ty tax, re­duce cor­po­ra­tion tax­es, and spend on cam­paign promis­es, for­mer Fi­nance Min­is­ter Colm Im­bert yes­ter­day warned of a dark and dis­mal rev­enue out­look for T&T.

Im­bert ar­gued that the Unit­ed Na­tion­al Con­gress ad­min­is­tra­tion has po­lit­i­cal­ly aban­doned key sources of rev­enue, leav­ing bor­row­ing as the on­ly path to cov­er the pro­ject­ed $9 bil­lion deficit in the 2025 Bud­get.

“The on­ly way that the Gov­ern­ment can fund the $9 bil­lion deficit that they are pro­ject­ing for 2025 is through bor­row­ing,” Im­bert said dur­ing de­bate on the Mid-year Bud­get Re­view.

“The min­is­ter made a song and dance about our cur­rent debt pro­file as if it was a bad thing, but you are adding $9 bil­lion more to pub­lic debt and in­creas­ing the debt-to-GDP ra­tio.”

Im­bert de­scribed Fi­nance Min­is­ter Dav­en­dranath Tan­coo’s pre­sen­ta­tion as lack­ing sub­stance and void of crit­i­cal da­ta. He ac­cused Tan­coo of fail­ing to ex­plain how the Gov­ern­ment in­tends to fi­nance the bal­loon­ing deficit and claimed that state­ments about the pre­vi­ous ad­min­is­tra­tion crash­ing the econ­o­my were un­sup­port­ed by facts, ev­i­dence, or analy­sis.

He crit­i­cised the Gov­ern­ment for ig­nor­ing in­ter­na­tion­al warn­ings, say­ing if Tan­coo had looked at what in­ter­na­tion­al rat­ing agen­cies said about the threats to the econ­o­my, Gov­ern­ment would not be so cav­a­lier in in­creas­ing the deficit from $5 bil­lion to $9 bil­lion.

Im­bert said while the Peo­ple’s Na­tion­al Move­ment (PNM) gov­ern­ment used deficit bud­get­ing dur­ing crises to pre­serve jobs and lives, such a strat­e­gy is un­sus­tain­able in the long term.

“And that is pre­cise­ly what this Gov­ern­ment is go­ing to do. They talk about crash­ing the econ­o­my. They will sure­ly send this econ­o­my in­to a deep, dark hole be­cause what I pick up from the mem­bers op­po­site is they do not have a clue on how to run a coun­try in the face of de­clin­ing pro­duc­tion and de­clin­ing prices.”

He point­ed to Stan­dard & Poor’s (S&P) 2024 re­port, which warned that T&T’s heavy re­liance on oil, gas and petro­chem­i­cals makes the econ­o­my vul­ner­a­ble to glob­al price volatil­i­ty. S&P al­so not­ed the coun­try’s de­clin­ing pro­duc­tion in those sec­tors.

“The im­por­tant point that S&P made is not on­ly is Trinidad and To­ba­go ex­posed to glob­al price volatil­i­ty, but we are al­so fac­ing de­clin­ing pro­duc­tion and they made this state­ment of fact which mem­bers of op­po­site seem to be obliv­i­ous to and that is why you could scrap the Rev­enue Au­thor­i­ty. You have said to­day you are go­ing to scrap prop­er­ty tax, on the cam­paign trail you said you will re­duce cor­po­ra­tion tax and you just seem to be on a crazy spree of reck­less ex­pen­di­ture while hav­ing no source of funds.”

He added, “We heard noth­ing from the min­is­ter in terms of fore­casts for oil, gas, and petro­chem­i­cal pro­duc­tion, nor per­for­mance in the first half of the fis­cal year. What are the rev­enue pro­jec­tions for the sec­ond half? We heard noth­ing.”

Im­bert not­ed that sev­er­al new gas projects, in­clud­ing po­ten­tial col­lab­o­ra­tions with Venezuela, have stalled. He crit­i­cised the Gov­ern­ment’s stance on re­gion­al diplo­ma­cy, say­ing it ap­pears will­ing to es­ca­late ten­sions with Venezuela.

“How else can one in­ter­pret a state­ment about us­ing dead­ly force against Venezuela? You on­ly use dead­ly force when you are go­ing to war.”

He said the most promis­ing ex­plo­ration prospects lie in T&T’s deep­wa­ter blocks, which re­quire sev­en to 12 years to op­er­a­tionalise and in­volve high costs and com­plex­i­ty. Mean­while, he said sug­ges­tions about sourc­ing gas from Grena­da, Guyana, Suri­name, and Bar­ba­dos have been dis­missed by those gov­ern­ments.

“What Stan­dard & Poor’s is telling us is that de­clin­ing hy­dro­car­bon re­serves and the glob­al en­er­gy tran­si­tion will weigh heav­i­ly on our econ­o­my for years. De­clin­ing pro­duc­tion has al­ready damp­ened our eco­nom­ic per­for­mance.”

Cit­ing Moody’s De­cem­ber 2024 re­port, Im­bert not­ed that T&T’s ma­ture oil pro­duc­tion pos­es struc­tur­al chal­lenges, par­tic­u­lar­ly with over 100 years of com­mer­cial ex­ploita­tion lead­ing to nat­ur­al de­clines. He said coun­tries with age­ing re­serves and com­plex ge­ol­o­gy of­ten see sig­nif­i­cant pro­duc­tion falls.

De­fend­ing the past PNM deficits, he said rev­enues dropped from $57 bil­lion in 2014/15 to $44 bil­lion in 2015/16 due to falling oil price: from US$100 per bar­rel in Ju­ly 2014 to US$25 by Feb­ru­ary 2016. He said com­pa­nies like BP stopped pay­ing Pe­tro­le­um Prof­its Tax for years as pro­duc­tion be­came un­prof­itable. Gas prices al­so fell be­low US$2 per MMB­tu, fur­ther re­duc­ing rev­enues to $36 bil­lion in 2016/17.

Im­bert said al­though ex­perts ad­vised cut­ting ex­pen­di­ture to $36 bil­lion, this would have led to mass job loss­es and state en­ter­prise clo­sures. In­stead, the then-gov­ern­ment opt­ed to bor­row to main­tain sta­bil­i­ty.

Im­bert added that ac­cord­ing to the IMF, T&T en­tered a grad­ual re­cov­ery by May 2024, with GDP grow­ing by 2.1 per cent in 2023. Growth was dri­ven main­ly by the non-en­er­gy sec­tor and a fall in in­fla­tion due to low­er glob­al food and goods prices. He al­so not­ed that the PNM man­aged to sta­bilise the bud­get pri­or to COVID-19, pre­vent­ing an in­crease in the debt-to-GDP ra­tio dur­ing the pan­dem­ic.