Finance Minister Colm Imbert yesterday laid bare an economy that is on life-support, suffering from the deleterious effects of the COVID-19 pandemic and years of attempted economic suicide.
The Minister told the country that we were both borrowing and depleting the Heritage and Stabilisation Fund in an effort to pay recurrent expenses like salaries, transfers and subsidies.
According to the Minister, an already forecasted budget deficit is likely to be worse than expected.
The Minister pointed out that at this stage of the financial year it was expected the government would have collected $13.823 billion.
However, the actual revenue collection for this four-month period was $12.020 billion, a negative variance of $1.803 billion.
Imbert said the shortfall occurred in several areas including taxes on Income and Profits which was down by $436 million compared with estimates.
A significant portion of that shortfall was as a result of the decrease in tax revenue received from oil companies – namely bpTT, Shell and BHP – due to depressed prices for oil and gas and lower than expected production volumes.
This paper, and in particular the Business Guardian, has over the last two years consistently raised the issue of government poor forecasting of oil and gas production and prices and while Minister Imbert acknowledged this criticism led him to underestimate what the Ministry of Energy was predicting, again it has proven too optimistic.
There must be something fundamentally wrong with the quality of work being done by the Ministry of Energy if it could not tell that bpTT in particular would be down in their production this fiscal year.
The Finance Minister said despite the financial constraints, the payment of salaries and wages is the top priority.
Imbert said the mandatory payments cost the country a staggering $3.5 billion per month and he pointed to the loss-making public utilities as a drain on taxpayers.
It is here that successive PNM and UNC government must take the blame. How long have we concluded that WASA had to be fixed? From the early 1990s with the late Prime Minister Patrick Manning and Severn Trent to the resignation of former Public Utilities Minister Robert LeHunte WASA has been a major headache. To fix it there must be a commitment to right-sizing the authority, investment in technology and a fair price for water.
T&TEC suffers from three problems, failure of government and state enterprises to pay their bills on time, the take or pay contracts with TGU in particular, a result of UNC politics in killing off the Aluminium smelter plant and the third is an unfair electricity rate.
These are not old problems but as a country we have tried economic suicide, preferring to hide our failure to meet the challenges of our time by subsidies and wastage of the patrimony of oil and gas. Even now we are still not accepting the need for fundamental economic transformation and as we run out of fiscal space we are now like the Israelites during their 40-year wandering in the desert, hoping for manna from heaven.