Wednesday, September 24, 2008

US$8.3 billion budget for T&T - Port-of-Spain projects growth of 5.6%

Published: Wednesday September 24, 2008

The Trinidad and Tobago government on Monday presented a near TT$50 billion (US$8.3 billion) budget to Parliament, outlining a range of new taxes, providing more assistance to old-age pensioners and retired citizens and increasing education grants to students.

Finance Minister Karen Nunez Tesheira, who created history when she became the first female legislator to present a national budget since Trinidad and Tobago attained its political independence from Britain in 1962, said that the fiscal package was based on the theme 'Shaping Our Future Together'.

Projected growth

In a presentation lasting just over three hours, she said that the budget was calibrated on an oil price of US$70 per barrel, as well as a projected gross domestic growth (GDP) of 5.6 per cent.

"Based on these assumptions, total revenue is forecast at TT$49.2 billion (US$8.2 billion) comprising energy-sector revenue of TT$19.9 billion (US$3.31 billion) and non-energy revenue of TT$29.5 billion (US$4.91 billion)," she told legislators.

"Total expenditure to be appropriated from the Consolidated Fund is TT$44.2 (US$7.3 billion) of which TT$5.1 billion (US$850 million) would be transferred to the infrastructural development fund. In addition, we anticipate TT$6.7 billion (US$1.1 billion) as direct charges on the Consolidated Fund and TT$496 million (US$82.6 million) from the Unemployment and Green Fund.

"To summarise, total revenue is estimated to be TT$49.4 billion (US$8.23 billion), total expenditure, net offs, capital repayment and sinking funds TT$49.44 billion (US$8.24 billion) for a surplus of TT$19.5 million (US$3.25 million)," Tesheira added.

The finance minister said that the budget would be financed by a number of measures, including an increase in taxation on the importation of private vehicles that would result in revenue totalling TT$525 million (US$87.5 million). That measure goes into effect from Tuesday.

Moreover, the government has announced an immediate TT$1 (US$0.16 cents) increase in the price of a litre of premium gas to TT$4.00 (US$0.66 cents), noting that the measure would result in savings of TT$200 million (US$33.3 million).

Assistance, grants

She said that the government would also be providing free ferry passes to persons 65 years and older at a cost of TT$5 million (US$833,000), allowing them to use the bridge between Trinidad and Tobago as of October 1.

The Patrick Manning government has also announced an increase in disability grants to TT$1,300 (US$216) that would result in a cost of TT$40 million (US$6.6 million) and benefiting an estimated 17,000 people from October 1.

Public assistant grants will also be increased, as well as benefits to retired citizens and public servants that would cost an estimated TT$3870 million (US$63.3 million) and would benefit nearly 120,000 persons.

The finance minister said that contributions to pension would be increased from TT$25,000 (US$4,166) to TT$30,000 (US$5,000) to encourage savings, as well as an increase in the threshold on property taxes, as they relate to stamp duty.

She said that given the continued rise in domestic property value and government's objective of making housing affordable, there would be a further increase of property value from TT$450,000 (US$75,000) to TT$850,000 (US$141,666).

"That means that no stamp duty would be payable on the govern-ment's low-income housing pro-gramme," Tesheira said, outlining a scale on which stamp duty would be charged for properties in excess of the new figure.

She said the measure would cost an additional TT$30 million (US$5 million) and would take effect from October 1.

The finance minister said that while the Manning government had introduced new measures to ensure more citizens were taking advantage of tertiary education, it had decided to improve grants to students because the fees had increased significantly.

Education aid

She said the government would now provide grants of TT$20,000 (US$3,333) for master's level pro-grammes and TT$30,000 (US$5,000) for students pursing doctorate degrees.

Tesheira said the new measure would cost an additional TT$40 million (US$6.6 million) and would take effect from October 1.

The minister said the government would also provide scholarships to citizens, who had completed degrees with first-class honours and wanted to continue their studies up to the doctorate level.

But, in an immediate response to the fiscal package, former Opposition Leader Kamla Persad Bissessar, who will give the opposition's response to the measures on Friday, said the budget contained "no surprises whatsoever".

Source: Jamaica Gleaner

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