The dreaded adjustment in the price of fuel materialise during Monday’s budget presentation in Parliament.
In laying a $56.175 billion budget for fiscal 2022/2023, Finance Minister Colm Imbert said the current fuel subsidy amounts to over $2 billion dollars, but the Government believes the money spent on subsidised fuel should be capped at $1b per year.
“We have therefore decided to increase as of today the prices of premium and super gasoline and kerosene by one dollar per litre, and diesel by fifty cents per litre,” Imbert said.
He also noted that based on the projections, diesel is currently being sold to citizens at half the cost it is bought for by the Government. However, no adjustments were made to the price of gasoline and diesel at the pumps.
Thus, the new price at the pump for fuel is as follows:
Premium – $7.75; Super – $6.97; Diesel – $4.41; and Kerosene – $4.40.
The price of LPG will remain fixed at the $21 for a 20-pound cylinder of domestic cooking gas.
Based on an oil price of US$92.50 per barrel and a gas price of US $6 per MMBtu (Metric Million British Thermal Unit), the budget has a deficit of $1.51 billion as expenditure was estimated at $57.685 billion.
In terms of the fiscal allocation per sector, Education and Training got the biggest piece of the pie with $7.453 billion. Health ($6.892b), National Security ($5.798b) and Social Grants ($5.453b) rounded out the top four.
The other allocations were Works and Transport ($3.748b), Public Utilities ($2.823b), Rural Development and Local Government ($1.887b), Agriculture ($1.330b), and Housing ($0.974b).
Tobago was allocated 4.3 per cent of the national budget which amounted to $2.251 billion, some $185 million more than what was allocated in the last budget.
Of the $2.521b allocation, $2.194 billion will be for recurrent expenditure, $300 million for development programmes by the Tobago House of Assembly, $128 million for the Unemployment relief Programme (URP) and $9.2 million for CEPEP.
There was also an adjustment to the price of travel on the domestic airbridge and sea-bridge.
Effective January 1, 2023, one-way flights from Trinidad to Tobago, or from Tobago to Trinidad, will increase by $50, from $150 to $200.
Ferry tickets will now have a one-way fee of $75, up from $50, while persons over 60 years will pay $25 one-way. Premium cabins will now cost $150, up from $100.
In a three-and-a-half hour presentation titled “Tenacity and Stability in the Face of Global Challenges”, Imbert said Trinidad and Tobago, under the current government, will not be in an IMF programmes as some of their Caribbean counterparts are.
Stating that the country’s net official foreign reserves stands at US$6.8B, representing 8.5 months of import cover, which is well above the international benchmark of 3 months, Imbert said: “Madame Speaker, as a result of higher than expected oil and gas prices we have deposited US $163 million or $1.11 billion into the Heritage and Stabilisation Fund.”
Noting that the fiscal deficit has been reduced to $2.43 billion, down from $9.1 billion at time the last budget was read, he said the Government will adjust its supplemental oil and gas tax regimes to incentivise new oil production and will look at adjustments to other energy taxes.
He said EOG Resources plans to drill six wells for its Osprey East & West project with a US$234 million investment from 2022-23, and a US$555 million investment planned for the Mento field from 2023-2026.
He said T&T’s nominal Gross Domestic Product (GDP) has grown by 34 per cent 2020, moving from $142 billion to an estimated $190 billion in 2022, while per capita GDP increasing from US$15,000 in Sep 2020 to US$19,500 in Sep 2022, the best in the region, and expected to reach US$20,000 by end of this year.
“Our economy is expected to recover with real GDP growth of 2 per cent for 2022.”
Personal allowance increase
In addressing incentives at the personal level, Imbert said effective January 1, the personal allowance deduction for individual taxpayers will be increased from $84,000 per annum to $90,000 per annum.
He said this increase in allowance will cost the State some $450,000 a year, but will place more disposable income in the hands of citizens.
On the issue of public sector wage negotiations, he said the Government’s offer of four per cent is the best that they can do, and the counter offer of 19 per cent by the Public Services Association (PSA) cannot be met:
He noted that the Government stands ready to make good on their offer as soon as it’s accepted, but is also prepared to face the court if the matter reaches there.
The Government, he said, has also allocated $210 million to be made payable to some 20,000 healthcare workers for their commitment and sacrifice during the Covid-19 pandemic.
“Madam Speaker, we are also funding in the amount of $500 million and in partnership with the commercial banks, a new long-term Loan Guarantee Scheme Government loan guarantees for small and medium enterprises. First Citizens bank will manage this project in collaboration with other commercial banks.”
He stated that the loan guarantee will be up to 80 per cent of the value of the loan for a term of up to 10 years, inclusive of a two-year moratorium on repayments, and it will focus on businesses in the non-energy sector.
“Madame Speaker, we are on track to commence collection of property tax in fiscal 2023. The legal structure is already in place, but we intend to make some simple amendments before the end of the year to the Valuation of Land Act, to tighten and clarify the procedures for the gathering and processing of information and valuation of properties,” he said.
The Finance Minister noted that by the end of last month the Valuation Division had received 325,296 returns of property data which are currently being assessed.
Local government reform
“Madame Speaker, the process of local government reform under this PNM (People’s National Movement) Government represents a very important change in the way people needs in local communities will be addressed…in essence, a paradigm shift.
“It has been on the political agenda for the past 30 years and its time has come. We envisage that local Government bodies in the proposed new system will be highly accountable and responsive organizations, grounded in the business, environmental, cultural, educational and social fabric of their communities. We are firm in our belief that local government should be given more rather than less reasonability and authority. As such, a platform for meaningful local government reform has been generated with the objective of creating a modern, efficient, properly resourced and proactive local government system.”
Imbert noted that the ongoing exercise of property valuations being conducted by the Valuations Committee of the Ministry of Finance, is specifically designed to address the problem of inadequate funding for the maintenance and development of infrastructure in local government districts, by reserving and allocating residential property taxes for the exclusive for the exclusive use of local government bodies, thus, providing them with a reliable and regular dedicated stream of income.
“In fiscal 2022, the Housing Development Corporation under its Finance Project Programme had under construction 1,366 housing units in ten communities. The HDC has also been utilising public private partnerships (PPP) top construct housing units in appropriate areas. During fiscal 2022, the PPP programme envisions the construction 339 units and will be begin the process of delivering 239 completed units.
“The HDC in collaboration with small and medium-sized contractors is also constructing basic three-bedroom single family units, ranging in cost from $250,000 to $500,000 per units. The HDC is also advancing its programme on a number of green field and brown field sites. Two thousand, five hundred and sixty-three housing units on 13 sites are being built for 784 low- income citizens and 1,799 for middle-income,”
He said the HDC has been strained for funding to complete housing and commitments to contractors.
“Accordingly, we are providing in 2023 significant financial resources to the HDC, to refocus on its mandate to construct affordable housing units. We are arranging three government guaranteed loans totalling $1.5 billion, of which $500 million will fund the completion of stalled or existing housing projects. Another $500 million will be used for the debts owed to contractors and suppliers, and a further $500 million will be used for the construction of new housing units.
“We are therefore putting in place a new structure for HDC which envisages a holding company with three subsidiaries; the Trinidad and Tobago Housing Development Construction Agency, Trinidad and Tobago Housing Development Corporation Facilities Management Limited, and the Trinidad and Tobago Housing Development Corporation Asset Management Company Limited,” Imbert stated.
In addition to its allocation for agriculture, the farming community will have access to an additional $300 million.
“I wish to confirm that we have once again allocated the additional sum $300m for agricultural incentives, infrastructure and programmes.
Imbert said the Government’s ‘Roadmap for Agriculture’ will focus on:
- Boosting local production geared towards agro-processing to reduce our reliance on highly-processed imported food.
- Building a more effective agriculture sector based on sustainable value chains.
- Using innovation, digitisation and technology engagement of the private sector, including small farmers, youth and women.
He said with road repairs being side-lined during the pandemic while the Government focused on meeting the social needs of citizens, the focus will now shift back to having the nation’s roads upgraded.
“A new State company, the Secondary Road Rehabilitation and Improvement Company Ltd, has been capitalised with an initial $100 million and a board appointed. A further $100m has been allocated for this company in 2023.”
He noted that $250 million will also be allocated to PURE (Programme for Upgrading Roads Efficiency) for fiscal year 2023.
The Government Assistance for Tuition Expenses Programme (GATE) will be adjusted to allow students with diplomas, associate degrees or at the N1 level at the University of the West Indies (UWI) to access funding for Bachelor’s degrees.
He said students with good standing, enrolled in accredited institutions and programmes will qualify if they completed an initial programme of study.
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