Despite the economic downturn and the Government running a deficit Budget, only seven out of 57 Government Ministries and State bodies have received smaller allocations than they spent in 2009. These Ministries are the Tourism Ministry, Energy Ministry, Works and Transport, Sport and Youth Affairs, Trade and Industry, Social Development, and the Office of the Prime Minister.

’Establishing expenditure priorities in this environment is not easy,’ says economist Ronald Ramkissoon. ’Ideally, government expenditure must encourage private sector expenditure to kick in. It must not crowd out private expenditure. Expenditure on the poor and indigent must be made, but must be well targeted. My bias would be on investment expenditure rather than on consumption expenditure, as the former may well generate its own consumption.’

The Government’s increases are relative to Budget cuts made during fiscal 2009, when it became apparent, contrary to initial reassurances made by Finance Minister Karen Nunez-Tesheira, that the global financial crisis would bust Trinidad and Tobago’s energy boom. ’Marked decelerations were recorded for Trinidad and Tobago (3.5 per cent from 5.5 per cent) in 2007,’ notes the Review of the Economy 2009. ’Trinidad and Tobago’s economy is expected to contract in real terms by 0.9 per cent in calendar 2009.’

Despite the deceleration having already started in 2007, it was not until December 2008 that Prime Minister Patrick Manning announced that Government’s revenues would fall short of its forecast $49,465.2 million by about $5 billion. This estimate was confirmed by the Draft Estimates laid in the Lower House last month, showing expenditure of just over $45 billion, so the 2009 Budget thus ended up being a deficit one, by about $714 million instead of the predicted surplus of $19 million. But where did the Government cut back?

Table 1 shows that the biggest sums were taken from the Ministries of Finance, Health, National Security, and Local Government: a total of $3.7 billion. The Finance Ministry also had the largest relative budget cut of 30 per cent, while the cuts from the other Ministries were less than 1 per cent each.

This belt-tightening has apparently encouraged the Government to increase its allocations to chosen areas for 2010. But, warns Ramkissoon, ’The government overspent over the last few years. Overspending results in waste and inefficiency, and creates a wrong impression in the eyes of the population.’

This wrong impression may be exacerbated by the fact that the most substantial increases listed in the Review of the Economy are precisely those items which attract allegations of nepotism and corruption: consulting and contracting services, contract employment, and rental accommodation. But, Ramkissoon adds, ’At this juncture I would not recommend cutting back. There will be little or no increase in absolute expenditure this year. We need to distinguish between absolute level of expenditure and an increase.’

Some of the other increased sums are broken down as follows:

Judiciary - $261million to $294 million (12% increase)

Despite Chief Justice Ivor Archie’s complaint that he only got $42 million of the $300 million requested for the development programme, the judiciary has received $32.9 million more for fiscal 2010. It will be spending $5.4 million on personnel, $2.9 million on salaries, but have $800,000 less for its telephone bill and $1.4 million less for short-term employment.

National Security - $3.8 billion to $4billion

(0.5% increase)

Recurrent expenditure has increased by $262 million, but the Ministry’s development programme has been cut by $648 million. A significant portion of the Ministry’s money this year will go to big-budget items such as attack helicopters.

$50 million is being spent on the Civilian Conservation Corps, $388 million on the Special Anti-Crime Unit (SAUTT), $23 million on an organisation called the Strategic Services Agency, and another $73 million classified under ’extraordinary expenditure’.

Local Government - $1.2 billion to $1.6 billion (1.4% increase)

The extra $380.8 million allocated to Minister Hazel Manning will be disbursed primarily to the various regional corporations, even as Local Government reforms continue after a second postponement of elections. A breakdown of the sums allocated shows that the Port of Spain City Corporation gets the largest amount of $172 million, which works out to $3,510 per person for that area. At the other extreme, the Penal/Debe region gets the lowest per capita allocation of $50 million, which works out to $598 per person. Point Fortin gets $43 million ($2,156 per person), while Chaguanas gets $64 million ($949 per person), and the San Juan/Laventille Regional Corporation gets $129 million ($820 per person).

Finance - $7 billion to $5.5 billion (35.7% decrease)

In its reduced budget for 2010, the Finance Ministry has still been allocated $15.2 million for ’expenses in connection with international financial institutions’, another $50 million for the International Financial Centre, and $10 million for Alutrint’s operating expenses. There are also large allocations for what are described as ’support’: $250 million for a ’food price support programme’ and another $200 million for ’support for acquisition of housing’. And, although the Unemployment Relief Programme has received $442 million, there is a $5 million expenditure in the Finance Ministry for URP administration, half of which is for rent/lease. The Finance Ministry has also been allocated sums to subsidise State enterprises, with $1.6 million going to CNMG to add to the $14 million from the Information Ministry - which still doesn’t equal the $24 million being given to the Government Information Service whose 5-minute InfoVision feature has most recently featured gospel music from Divine Echoes. Caribbean Airlines is also being propped up to the tune of a quarter-billion dollars.

Office of the Prime Minister -$598 million to $391.8 million

(34% decrease)

This apparently whopping reduction has been possible mainly because the $450 million for the Commonwealth Heads of Government meeting, which was put under the OPM, is now listed as a decrease in expenditure. The major expenditure item of the PM’s office, transfers and subsidies, has also been reduced by $37 million to $206 million.

General cutbacks

Where, then, have the other decreases occurred? The charges on public debt have been reduced by $1.5 billion, with the same reduction in the Personnel Department.

’Recurrent Expenditure, is expected to decline by $6,596.7 million or 15.3 per cent, of which Wages and Salaries is anticipated to contract by $86.6 million to $6,856.1 million,’ says the Review of the Economy. Table 2 lists the reductions which have been made in the Development Programme (with only the Education Ministry getting an increase). The largest absolute reduction is in National Security, and the largest relative reduction in tertiary education. Nonetheless, the University of Trinidad and Tobago (UTT) has still gotten $385 million, which is $10 million more than it was allocated last year.

’We should have saved more so that we would not have been in a deficit just yet, the first year of a global downturn,’ Ramkissoon says, adding, ’What we always needed, but more so now, is to ensure far better performance management in the public sector - i.e. value for money and a clear distinction between penalties and rewards for performance.’