The Trinidad and Tobago Prime Minister Dr. Keith Rowley says the country had recorded a windfall of more than eight billion dollars (One TT dollar=US$0.16 cents) as a result of the increase in prices for oil and energy products on the global market but warned that the funds would not be used solely to pay one section of the population salary increases and arrears.
Prime Minister Dr. Keith Rowley, speaking at a news conference following a weekend retreat of the Cabinet, said Finance Minister Colm Imbert will outline the financial situation of the country when he addresses the nation on September 2.
But he told reporters that the windfall will be used to lessen the deficit from TT$16 billion to just under four billion.
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“But remember that deficit is not money in hand. It is the difference between earnings and expenditure. Our earnings have improved considerably in the 2022 period… and that is why our deficit is going to be better off”.
Rowley acknowledged that inflation has had an impact on the way of life, but that Port of Spain had been able to keep inflation to a low of just over five per cent “considerably less than it is in other countries which are in fact facing the kind of challenges we are facing”.
Prime Minister Rowley said the financial windfall will not be used solely to meet salary increases and arrears to public servants, adding that billions of dollars had to be borrowed to deal with the COVID-19 pandemic.
“Now that the market is giving us some additional revenue, unplanned but fortunately grateful to have that, the minister of finance is able to tell us that for the period we are examining …we would have earned an additional TT$8.14 billion…what do we now do with that money and that is what the discussion in the retreat was about”.
Rowley said even before the discussions had taken place, the government had gone to the Parliament for approval in spending TT$2.6 billion of the windfall through a budget adjustment.
“How much of that TT$5.2 billion do we spend on back pay to public servants and the fuel subsidy. We offered public servants a two percent increase and I need not tell you how that was received. But we can only offer what the country can afford,” Rowley said.
He said if the government offers a four percent increase “and if that four percent is accepted, we are talking about an immediately paid backpay of TT$2.4 billion, which is roughly half of the increased revenue”.
He said if percentage in salary increase is accepted, it would result in ongoing recurrent expenditure of TT$419 million annually.
Rowley told reporters that even after all the difficulties such as the impact of the coronavirus (COVID-19) on the economy and “all that we are going through Trinidad and Tobago still has a substantial cash of foreign reserves…well beyond the minimum…and we have foreign reserves for seven months import where four months is the usual yardstick”.
He said even as the government is pleased with the economic situation, it has had to implement a reduction in the amount of money spent on subsidizing fuel, which he estimated at TT$300 million monthly.
He said contrary to statements in the public domain the government has not removed the fuel subsidy, insisting “we have reduced it.”
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