Opposition Senator Dr Lester Henry has cautioned the Government that it could be in danger of breaking the law if it continues to use advances from the Central Bank to fund the national deficit.

He was contributing to debate on The Finance (Supplementation and Validation) Bill in the Senate yesterday at Tower D, International Waterfront Centre, Port of Spain.

He asked why the Government's announced plans for external borrowing did not materialise and Finance Minister Winston Dookeran said across the floor that it was "not necessary".

Henry said the Government was borrowing from domestic sources and drawing down on reserves in the Central Bank, which it had criticised the previous administration for doing.

He said because the Central Bank was advancing money to the Government on a massive scale they were not issuing new debts through Treasury bills, which he claimed was part of an unsigned agreement with commercial banks for the CLICO bailout plan.

"You tie your hands in order to allow the banks to cash in," he said.

He pointed out that if Government continued to take advances from the Central Bank it could break the law as the total amount of standing advances must not exceed 15 per cent of the portion of estimates of annual revenue of Government.

Dookeran, earlier in piloting the bill, noted a decrease in expenditure of approximately $2 billion and an increase in revenue of $1.9 billion, due to changes in the price of oil and additional revenue from the tax amnesty.

This reduced the projected fiscal deficit by about $4 billion (down from about $8.9 billion).

He said when he first took up his portfolio there were very few nights he felt he was in a comfortable place, but now he slept "very comfortably" as the issues that were part of the economic challenges on the horizon for the country were "now well under control".

Henry, in his contribution, responded: "We are somewhat perplexed by the minister's comfort because when you preside over a declining economy I am not sure what comfort there is in that."

He said that all of the figures were not in for 2011 yet, including the last quarter with the State of Emergency and curfew restrictions. He noted that there were some indicators of positive growth in early 2011, specifically in credit, real estate mortgages and new car sales, "but Government came and killed all of it in August with the State of Emergency".