Renuka Singh
Better than projected.
Finance Minister Colm Imbert said yesterday that in the 2022 budget, the Government had initially projected a fiscal deficit of an overall $9.095 billion.
He said for the period October 1, 2021, to March 1, 2022, an overall deficit of $4. 754 billion was projected but instead, the Government recorded a surplus.
In fact, the increased global energy prices mean the Government will be making a significant deposit into the Heritage and Stabilisation Fund.
He said the Government also reduced the overdraft level to 50 per cent, which Imbert said he “had not seen for years.”
“And that was based on the preliminary data available to the Government back in September 2021. However, I am pleased to report that instead of a deficit of $4.754 billion at the end of March as was expected, based on revenues received and expenditure incurred, the Government has actually recorded a surplus of $654 million,” Imbert said during yesterday’s Mid-Year Budget Review.
“Some $5.408 billion higher than the projected income in the first six months of the fiscal year.”
Imbert attributed that surplus to the higher than expected receipts of taxes on incomes and profits which stood at $3.2 billion.
He said because of the positive cash flow based on increased energy prices, there was more good news.
“It has allowed us to stabilise our debt and to reduce borrowing. As a result, I am happy to announce that the Government has not borrowed any money locally or externally to finance the Government expenditure since December 2021,” he said.
“We haven’t borrowed any money for five months and our public debt, believe it or not, is actually coming down and as of today, stands at $129.8 billion, $800 million less than in December 2021.”
Imbert said taxes on goods and services brought in an additional $178 million and taxes from international trade, which are the duty taxes, stood at $22 million. Non-tax revenue, he said, stood at $604 million.
“Now if we drill into the figures, what we find is that the good performance of taxes on incomes and profits was due to higher than projected receipts collected from other companies and that category includes the petrochemical companies, which are proving to be a significant life jacket for T&T due to the considerably increased prices of petrochemicals,” Imbert said.
“For those of us who monitor these things, one would see that the prices of petrochemicals; ammonia, methanol, urea, et cetera, have doubled, tripled and quadrupled over the last couple of years.”
Imbert said there was a “spill over” in the amnesty payments from 2021 when it was extended to October.
“We got an additional tax amnesty, in that month (October) payment of $43 million,” he said.
Imbert said there was an additional $1.17 billion received in payments from oil companies, which were attributed to the increased global price of oil and gas.
He said additional income from the higher international energy prices will be used to reduce the budget deficit.
“This has been a bugbear for T&T for several years because of the exponential increase in expenditure, Government expenditure over the 2010 to 2015 period from $45 billion to $63 billion,” he said, adding the Government spent years trying to “throttle back” from that spend.
“We could not support the expenditure of $63 billion, which is where it had reached,” he said.
Imbert said the State will also be making a deposit into the Heritage and Stabilisation Fund “in accordance with the law.”
“The way the HSE fund formula works is that it is calculated based on a quarterly basis, it is a post-factor calculation,” he said, adding that the State will be depositing some 60 per cent of the energy earnings in US dollars.
Funds will also be utilised to increase social welfare grants.
“We have an ageing population and so the number of people who qualify for senior citizens pension is increasing and therefore to meet the increasing demands, the additional funds would go to that,” he said.
Imbert said the Chief Personnel Officer (CPO) was currently negotiating with the labour unions to update the payments and bring the negotiations period to 2021 and the additional funds acquired will now be channelled towards that once the negotiations are completed. He said the Government also had a major road repair and de-silting programme on the cards.
