The government is looking at what can be done to extend the salary relief grants to June and at certain efforts to assist small and medium businesses.
Alongside these, payments are being made to get vaccines for 85 per cent of the population to achieve herd immunity, with the government expected to spend a total of $107 million on vaccine acquisition overall.
These were among developments indicated by Minister of Finance Colm Imbert, as he presented the mid-year review of the 2021 Budget in Parliament yesterday.
Detailing the economy’s performance in another COVID-strafed year he presented a Supplementation and Variation bill to add $2.9 billion to the $49.5 billion Budget.
The addition will assist 12 ministries, the Trinidad and Tobago Police Service and Elections and Boundaries Commission with funds for expenses for the rest of the fiscal year, ending September.
Supplementary funds were sought against the backdrop of the economy’s performance from last October’s Budget delivery to date.
Detailing information Imbert said this showed that despite a higher oil price than the (US)$45 the Budget was pegged on, natural gas production—where two-thirds of this country’s revenue emanates—and lower price on that gas affected Trinidad and Tobago significantly.
There was a significant reduction in revenue primarily from the natural gas sector. Up to April, there was a shortfall of about $2.5 billion with the main shortfall in the energy sector.
The forecasted overall shortfall in revenue—approximately $5 billion.
He expected most of the $3 billion supplementary funding will be spent and if added to the $5 billion, “We’re looking at an unplanned event in the vicinity of $8 billion. We’ll know the outcome at year-end.’’
When all effects were added, the situation was profoundly affected by COVID-19 and in dealing with this, supplementation of funds for Ministries was needed to ensure salaries, wages and goods especially in the health sector.
The supplementary $267 million for health includes a “significant” sum for payment of arrears for additional ambulance trips. Plus $86 million for regional health authorities with $34 million for the North Central Regional Health Authority under which the Couva Medical and Multi-training Facility falls.
Minister Imbert said the Ministry of Finance has spent (US)$10.3 million or TTD$ 70.2 million on vaccine procurement and overall expects to spend (US)$15.7 million which would amount to TTD$ 107 million. That’s estimated to cater to 85 per cent of the population or 1.2 million people. He said the ministry has already paid for “significant quantities” of vaccines and made necessary downpayment for vaccines especially from the African Acquisition Trust.
He projected that 85 per cent of the country would “certainly achieve” herd immunity—but didn’t say when.
Help on the way
Minister Imbert said the Ministry of Finance has a $250 million block allocation for the COVID relief grant. Some goes towards additional Food Cards which will be distributed in the “usual manner”, he said.
Over 35,000 indicated intention to apply for salary relief grants—about 28,000 in food/restaurant and retail sectors. On June 4, some 19,030 applications were received and 10,937 are being completed.
Grants involve $1,500 for those who lost jobs at the start of May and $1,000 for those who lost jobs from May 8 (after more restriction).
Imbert said it may cost $36 million in payouts for May.
“Because of the prolonged period for COVID-19, we’d be looking at what can be done in June,” he said.
The Minister added the figures aren’t worked out yet but he said Government would have to “do something” in June.
Regarding small/medium businesses, the Finance Minister said banks revealed many applications couldn’t qualify for the zero-interest Small and Medium Enterprises loan offered before. This was because many lacked management accounts, audited financials and weren’t up to date with VAT, NIS or tax payments.
“It’s really a reflection of a level of indiscipline among the SM sector, that they’re running businesses day to day, on a cash basis without proper planning or accounting. We must assist these people, this can’t continue with this situation,” he said.
He added the Central Bank has been contacted to develop an outreach programme for Small and Medium Enterprises to, “See how we can help and get them to understand that basic requirements in business is proper accounting.”
Imbert said if businesses can’t show banks income and expenditure and if they have the capacity to borrow, “….No bank will lend you money.”
The Minister also revealed that the ministry will examine increasing guarantees on the loans from 75 per cent to 100 per cent. “But beyond that we can’t have situations where people would want to approach banks for loans and have no accounts—that can’t work. So we’ll talk to CBTT to try helping these people have the minimum of management accounts.”
He said Cabinet has agreed to extend the programme—and also Credit Union programmes—to the end of December.