Mr. Speaker I want to begin, as a member of the Accommodation Committee by joining you and my other colleagues gathered here, in expressing my sincerest gratitude to all those who have contributed to the smooth relocation from the Red House to our temporary accommodation at this venue, a subject to which I will return a little later. I particularly want to single out the Parliamentary staff for special commendation as they once again demonstrated that they are among the most professional and reliable officers in the Public Service. This is a badge of honour which they must continue to wear with pride as they follow the excellent leadership of our Clerk of the House, Mrs. Jacqui Sampson-Miguel.
Mr Speaker, as is customary after the Budget statement is read, the Leader of the Opposition is required to respond to the Minister of Finance and the Government in the context of their proposals as advanced. On this occasion Mr Speaker, I crave your indulgence to direct my response solely to you and the wider public of Trinidad and Tobago whose business has been so trivialised by the Group of 29 which is leading us over a cliff whilst pretending it is a trip to the promise land. It is my intention to leave the Government to continue to ascribe blame to others, to evade its own responsibility, to hide and misrepresent facts, to propagandise and engage in self-praise as the national crisis looms larger and larger. In the words of the Minister of Finance himself, this is the only Government which finds itself approaching a cliff and chooses to “look up” with “resolve and vision”. Maybe it is their intention that the inevitable loud thud at the bottom of the pit will wake them up to the reality of our deteriorating circumstances but by then it might be too late for the people of Trinidad and Tobago. It is against this background that I choose to speak directly to the people of Trinidad and Tobago about the real threatening circumstances which the Minister of Finance has studiously evaded.
One year ago Mr Speaker, a new Government presented a Budget to this Parliament and received the support of the Opposition in its passage (unheard of). Even though we were critical on a few of the issues and strongly warned against the negative potentials of some actions we voted for the Budget and wished the five-month old Government well as it embarked upon the business of improving the condition of the people of Trinidad and Tobago on a foundation built by its predecessor.
It has come to pass that all that the Minister of Finance can claim as an accomplishment in this Budget statement is that he “stabilised” the Economy, it behoves me to remind you, Mr Speaker, of the state of the Economy as it was, when this Government took office. This is best summed up in a press release from the reputable Standard and Poor’s Rating Service which was issued in New York on September 14th 2009
“....... Standard and Poor’s Rating Services said today that it affirmed its A/A-1 foreign currency and A+/A-1 local currency sovereign credit ratings on the Republic of Trinidad and Tobago. Standard and Poor’s also said that it removed these ratings from CreditWatch, where they were placed on Feb. 3, 2009, with negative implications.
The outlook is stable.”
The budget speech delivered by the Finance Minister was an elaborate exercise in obfuscation, self-praise, and deceit! At times the speech bordered on delusional or was of such extreme vagueness that one had to struggle to follow exactly what the Minister was really saying!!
The Minister of Finance has presented budget estimates of $54 billion!! The largest in the country’s history! This is without identifying any clear revenue generating activities other than increasing fines for certain offenses!! The Minister is actually congratulating himself for planning to run huge budget deficits without articulating any plan as to how he will raise revenue in the future and when will he return to a balanced budget? The disastrous outcome of this should be clear to all right-thinking people in this country!
There is a saying on Wall St. that “if you jump out of a building 100 stories high, for the first 99 floors you can really believe that you are flying”.
This is the perfect metaphor for what this UNC government and its Finance Minister is doing to our economy!!! They are leading us down a path to economic ruin while believing their hollow rhetoric about “from steady foundation to economic transformation, who are they trying to fool? What foundation did they lay?
The Minister said by the first quarter of 2011,
“we envisioned a somewhat smooth sailing, with a certain gentle economic wind on our backs”,
Well, in that quarter “growth’ turned out to be -1.7 percent! And in the previous quarter it was -3.5 percent!!!
So what was he talking about?? Furthermore, after painting a gloomy picture of the developments in the US and Europe, the Minister then tries to pretend that somehow these were responsible for the recession that he was presiding over; listen to him: “these uncertainties were transmitted to our economy through the impact on oil and gas prices”.
Well, the average oil and gas price was well above the budget price of last year to the extent that greater than expected revenue was derived from the energy sector! This even allowed them to run a smaller deficit than was planned!
In fact, the Central Bank reported that: ( June 2011). As the energy markets picked up in 2011, the Energy Commodity Price Index increased by 42.4 per cent on a year-on-year basis to June 2011, after peaking at 153.5 in April 2011.
• The average price of crude petroleum: (WTI) peaked at US$113.9 per barrel in April 2011 before falling slightly to US$96.3 per barrel in June 2011.
Let me remind them that their budgeted price was US$65!! So again, what is he talking about??? If this not deceit then, what is??
More Importantly, Mr. Speaker: What was the real state of our economy when they came into office and what have they done since then?
The fact is that all our macroeconomic indicators were very good when this Gang of 29 took office in the second quarter of 2010!
Mr. Speaker: Unemployment was at 4.8% at that time, one of the lowest levels ever recorded in any CARICOM country!! Mr. Speaker our foreign exchange reserves stood at over US$9 billion when the Gang took over the reins of government!!
There was also already over US$3 billion in the Heritage and Stabilization fund! So they met the country with a combined US$12 billion in savings and reserves!!
Yes, Mr. Speaker this was what the PNM left in place!!
Furthermore, Mr. Speaker, Our public debt to GDP ratio was at about 38.5 percent!! This was way below any panic point, in fact, this was one of the lowest you could find anywhere in the world!! Additionally, our international credit rating was well in place “A” well in place, look at this Mr. Speaker.
2005 2006 2007 2008 2009 2010p
1 Standard and Poor’s A- A- A- A A A
2 Moody’s Baa2 Baa1 Baa1 Baa1 Baa2 Baa1
Yet, incredibly they set about bad mouthing the country’s economic situation and in the process, destroyed the very business confidence that they are now struggling to revive!! We warned them about what they were doing yet they kept on “crying wolf”, playing cheap politics -trying to convince the country that we were on the brink of some sort of economic calamity when they came into office. Mr. Speaker, the real disaster started on May 24th!!
N No REAL GDP Growth
The economy was expected to grow at positive 2.5% in 2010 when the UNC came in to office, but after claiming in September that his 2010 budget would “turn the economy around”, the Finance Minister presided over a, -3.6 % economic decline in the last quarter of 2010, and then a further contraction of -1.7 in the first quarter of 2011!, in other words “a recession!”
So all indications are that for the rest of this year economic growth will continue to be negative! The Minister of Finance himself has confirmed this! Therefore from the point of view of this most important economic indicator: the UNC government has been an absolute failure,-- a disaster!
Unemployment fell to 4.8 % around election time in the second quarter of 2010. Since then all evidence points to a steady increase in the unemployment rate, Again, all indicators suggest that the unemployment rate could be significantly higher than this at the moment!, because they have continued their backward policies!
3. No Business Confidence
The UNC has failed miserably to convince anyone in the private sector that they have a clue that they know what they are doing. Their flip-flopping and mean spirited actions have destroyed business confidence in our economy!!
As one story in the Trinidad Guardian confirms:
minor-latin;mso-fareast-language:EN-TT">“Budget 2011 did not turn the economy around. An ambitious $50 billion plan, by an even more ambitious newly-minted coalition Government, struggled with a confidence crisis for most of the financial year”
Calibri;mso-bidi-theme-font:minor-latin;mso-fareast-language:EN-TT">Published: Wed, 2011-10-05 21:21,
This is also reflected in the fact that the Central Bank reports that business lending continues to decline under this government, falling by -5.7% at the beginning of this year.
4. PUBLIC DEBT
The country is on its third year of deficit financing. The UNC is now in its second year of deficit financing. They insist on bringing larger budgets than the PNM ever did while boasting about their ability to “borrow”. So if they actually borrow and spend all that they claim in their two budgets they would significantly increase our national debt! In fact, it can go from a manageable 50% of GDP to about 70% if they carry out all their plans. And that unfortunately appears to be their ambition!! And they are proud of it!! And this they refer to as “prudent economic management”!! While sitting comfortably on the IMF train they are proudly boasting that they are not taking the country down that road!! Utterly delusional! Who is so crazy in this country to take any assurance given by the UNC!!
Two consecutive quarters of increasing unemployment, and more pain to the people suffering under the modern policing in the 21ST.C (SoE). Super low core inflation in 2011 - base effect notwithstanding – partly indicating weak activity in the economy..
This UNC government has presided over: taking the country from weak positive economic growth into a recession! Rising unemployment!; Increased national debt, and destroyed any semblance of business confidence!! If this is not economic mismanagement then what is??
For them this is good economic management “PP Style”.
So when this Minister of Finance and his coalition gang members seek your praise for stabilising the economy I want to tell them Mr Speaker, that he did not stabilise anything, he met it stable in May 2010 and it had been declared stable since September 2009. What he has done by destroying confidence in the economy is to unravel what he met. He promised last year to turn the economy around. We pointed out then that if he was successful it would mean that the economy will reverse its direction from growth to recession. Sadly Mr Speaker, this is probably the only area where last year’s Budget succeeded.
After the initial supplies of the economic shock emanating from the Wall Street collapse of early 2009 the assignment of the new Government was to maintain that stability and bring about further growth in the weakened economy. On this score the Government has failed and failed miserably. It is now common knowledge that even with all the challenges of the 2009 international, regional and local situations, the performance of the Trinidad and Tobago economy in 2010, the year of Governmental hand over and transition, saw a negative growth of 0.6% and a better than anticipated fiscal deficit. It was on this foundation that the current Minister of Finance and his Government solicited and obtained Opposition support and from which it projected economic growth of 2% for 2011. What has been the result?
Not only did we not achieve the 2% expansion, nor did we remain at the initial level where we were at in October 2010 but the economy is projected to contract by 1.4% in the fiscal period 2010/2011. All this was whilst, throughout the year, the Government resolutely denied that the economy was stalled and we were experiencing recessionary conditions. It is reasonable to assume that when the full effects of the current economic disruption occasioned by the State of Emergency is fully factored into the end of the 4th quarter the real decline could be well above 2%. Instead of facing reality and taking the necessary action as they were required to do, using the tools of expenditure provided by the Parliament, the Government spent the year engaging in vacuous propaganda about “blue skies” and rosy forecasts of nonexistent recovery and growth.
While the economy was collapsing and all knowledgeable right thinking citizens were beseeching the Government over the effects of this recession on their personal lives and their businesses, the Government chose to ignore the reality, to engage in deceit and misrepresentations as they executively travelled, partied heartily, and conducted guerrilla warfare against all contract officers. They revelled in inter-Ministerial jhanjat in the State Enterprise sector where, even as I speak, Chairmen and myriad functionaries are still coming and going like the traffic in Paddington Station. The net effect of all this has been tardy and ineffectual decision making, stifling of economic activity with significant job losses in the private sector.
It is against this background that this deceitful Government has not published the quarterly unemployment figures since the 2nd quarter of 2010. As unemployment continues to rise alarmingly there are no longer any official published statistics of the unemployment situation because the Government wants it to be so. With no published statistics available it was interesting to hear the Minister of Planning and Development quoting the latest unemployment figures, known only to him. This is a figure which is lower than that quoted by the IMF, all of which are much lower than the real numbers.
What we do know is that during the last year thousands of persons have lost their jobs and very few new job opportunities have been created as the economy continues to contract.
With this experience, we demand that the Central Statistical Office (CSO) be revamped immediately and we call for and support the establishment of an independent statistical institute, gathering data of national interest and making it available in a useable and timely fashion, away from and free from Government interference and manipulation. This institute should be headed by a Director appointed by the President, with proper security of tenure.
Reliable statistical data are key ingredients in government and private sector decision making on policy formulation. The collapse and / suppression of the CSO, as we are seeing with the unemployment figures, is intolerable and should be cause for great concern with respect to the outcome of the ongoing national Census exercise.
In a Budget statement in which the Minister of Finance offers “disclosures and decisions” the exact opposite has been the fabric of his presentation. For approximately three hours the Minister laboured haltingly over a text in a manner as though he was seeing his contents for the first time or so unconvinced was he of much of the contents that he could not drum up the enthusiasm to present his potions with any conviction.
What is abundantly clear is that the Minister of Finance in October 2011, one and a half years into his tenure, has deliberately refused to report to you the people of Trinidad and Tobago on the performance of the last Budget provisions, on the current economic conditions and outlook as they stand under his watch. He accepts no responsibility for his stewardship. After he and his marauding colleagues did everything possible to destroy confidence in the economy he now makes the preposterous statement that the admitted failure of the last fiscal package, the contraction of the economy, this UNC-led recession, is the fault of the private sector and the Opposition. Clearly that is what his handlers advised him to say. When this Budget fails to deliver, we expect that it would be blamed on Osama Bin Laden and the man in the moon.
No two Ministers speak with the same voice on any issue as they jostle for attention in front of any available camera. Not even the Prime Minister is immune from this scourge. Only last week we heard of an airport in Couva and five hospitals as certainties in the 2012 Development Program and that every Ministry would have an identifiable gender component. Sadly, nobody bothered to advise the Minister of Finance.
The Central Bank reports that business lending continues to decline under this government, falling by -5.7% at the beginning of this year. This protracted loss of confidence has everything to do with the behaviour of the Government as much as it has to do with any circumstances beyond our control.
As of today there is no commitment to any time frame for a return to economic growth. The Government is clear that it is taking on no such responsibility. If this shirking of leadership responsibility continues for much longer the World Bank and/or the IMF public servants will do it for us when we turn up to do the borrowing which seems to be the panacea of the coalition. The 2011/2012 budget forecasts a best case scenario of 1.7% growth. How then will next year be better than the last!!!!
The IMF World Economic Outlook warns that the world economy has entered a “dangerous” phase and that the prospect of lower world economic growth and a recession has increased significantly. The Minister indicated that he appreciated the risks and then proceeded to ignore them. Expenses outstripped revenue yet another year in 2011. Where are the “growth poles” which drew so much desk-thumping last year? How has the private sector responded to these initiatives hailed in last year’s budget?
Where is the big bang or cumulative series of small steps that would carry us from no growth to the stability of which he spoke in his first budget.
Indeed the approach set out in the budget is akin to the encounter in “Alice in Wonderland” between the Alice and the Cheshire cat when she asks for directions, the cat replies that if you don’t know where you are going then “any road will take you there”.
Mr. Speaker, where is the Finance minister leading us!!!!
He paints a gloomy world economic outlook he speaks of uncertainty and the need to navigate uncertain waters. This is the same Minister who just four weeks ago was talking about “blue skies and green shoots”. Perhaps his head was in the clouds then. He is certainly there now.
Last year’s budget PR talk was stabilisation; this year the buzz is transformation. The reality is that nothing significant has been achieved. There are no growth poles and no growth.
In his last budget speech, the Minister of Finance based his budget on an oil price of $65. This year he uses a price of US$75 whilst telling us that the oil production has continued to fall. What he did not tell the country is that oil production is at its lowest level since the 1950’s. And in the main that oil production consists of heavy crudes which do not attract the best price (the WTI price). We export a lower quality oil so our realized prices will always be lower by 15 to 20 %. Our LNG may be sold increasingly to other destinations which are achieving a better price, e.g. Europe and the Far East, but the market is softening yet the minister keeps the price constant at net back price of USD$ 2.75. In the 2011 Review notes there are reports of problems with supply and several plants complained of low output.
It is therefore highly unlikely that we will achieve the prices on which the budget is predicated. 2010 was a good year and we did well with revenues of $42.3 billion. The 2011 tax Revenue is estimated at $43.4 billion and is projected to grow to $47 billion in 2012 with no new revenue streams and a weak energy market. Is this not wishful thinking? Is this realistic? Or did he just increase the prices of energy to get a bigger revenue number so expenditure could be increased?
But there might be an even more sinister interpretation. The HSF Act requires that monies be transferred to the HSF when realized prices are higher than budgeted prices. The Minister has ensured that there will be no such transfers by budgeting a higher price than can be realized ensuring that he has every cent available for expenditure. These are the same people who advocated that we should never use anything above $50.00 for budgetary purposes so that there will always be a savings component from energy sector revenues. Today is today, yesterday was yesterday, this is new politics.
Mr. Speaker, so we have a weak and uncertain revenue outlook, falling energy prices and an increasing possibility that we may have double dip recession. However, for the second year running budgeted expenditures are increased from $51 billion last year to $54.6 billion in 2012.
How long are we going to continue with this? Are we the Caribbean Greeks?
This government came into office saying that the treasury was empty, that the economy was in a mess that government debt was out of control?
And what have they done? Increased the borrowing limit, increased uncertainty about the future and destroyed investor and consumer confidence, kill the capital expenditure budget and slow the economy down!
And if that were not bad enough they come with this hare-brained idea to develop a bank for Jack, something called a National Infrastructure Bank! This is the same government who says that they want to restrict what government does and leave room for the private sector! But he wants to develop another Bank the primary client of which, directly or indirectly, will be the Government of TT. Just imagine the Member for Chaguanas with his very own Bank. Take that in your pooch Blazer/FIFA.
Is the minister aware of the robust capital provisions that are included in the Basel Accord 3 to increase the capital requirements of Banks worldwide and to ensure that banks have enough capital to deal with operational risks and the other risks that come from lending? Surely the Minister has learnt something from the banking crises of 2008 and 2009 and that now look to recur? And in this scenario of weak energy prices, where is he going to get the surplus capital to establish such an institution? Who will supervise its operations? Another Government Institution called the Central Bank? Is this the same Minister who said that there were too many special purpose state enterprises and that they are inherently badly run? His answer to too many state enterprises is to create another one?
Where else in the similar world has this been done?
I want to advise the Minister that a national budget speech is not the time to send up trial balloons to appease an over ambitious or disgruntled Minister. It is a time to deal soberly with real issues with workable solutions, not pretence!
How are we going to get the economy moving again, by increasing our recurrent expenditures and not improving our productive base? By unlimited borrowing to finance recurrent expenditure?
It is against this backdrop that we must review the Government’s inadvertent abolition of Land and Building taxes. The requirement to pay some level of land and building taxes is and has been a settled issue in Trinidad and Tobago for a very long time. When Finance Minister Yetming, of the UNC, announced the introduction of Phase 1 of a Property Tax (Land and Building Tax re-named) the only issue was what level will the revised tax be pitched at.
The PNM continued the process and set levels of taxation which met with widespread public condemnation, in a charged political environment. This emotive issue became the sustenance of the COP and this coalition promised to repeal the Property Tax and reinstate the Land and Building tax at the old rate. It is now the second year that land and building taxes have not been collected because those who “axed the tax” now realise that property taxation is rooted in valuation of the property and it is not feasible to value property now and establish ancient values that are below current market rates. This Government attempted to re-introduce Land and Building taxes at the old rates but could not treat with the valuation issue without applying egg to their “axe the tax” faces so they allowed the bill to lapse. Even at the old rates the country would now have foregone approximately $0.5b in desperately needed revenue. When confronted with the requirement for a proper explanation for this oddity, the Minister of Finance deceitfully brambles and waffles, saying that they are stymied by unidentified legal challenges.
The truth is that they have painted themselves into a political corner during the last election and now the price of saving their political faces is $250m per year in an “amnesty” which we all enjoy whilst they try to figure something out. Criticising a tax is one thing. Demonising the principle is quite another. Citizens must now monitor this matter closely to ensure that whenever this issue is eventually resolved, as it must, the Government does not enact retroactive legislation to place an inordinate an unfair burden on property owners as a result of the Government’s political expediency, deceit and incompetence.
Mr. Speaker, the Minister of Finance was ominously silent about his failure to realize the level of VAT collections projected in the 2011 budget.
In September 2010, the Minister of Finance told us that to support its expenditure for 2011, the Government expected to collect $6.41 billion in VAT. However, the Government only collected $4.67 billion in VAT in 2011: a shortfall of $1.74 billion or 27%! Would you believe that the Government collected less VAT in 2011 when oil prices boomed than in 2009 when oil prices crashed!!
VAT is a tax on consumption of goods and services. It is probably the most accurate indicator of economic activity in our country. For VAT collections to fall short by 27% or $1.74 billion, in one year, it tells us that our economy is in serious trouble and we are in fact looking at a downward spiral.
The Minister has hidden this fact from us. VAT collections are now at their lowest level for 3 years and this is notwithstanding the tax amnesty of 2011.
And in the face of actual VAT collections of $4.67 billion in 2011, the Minister has once again optimistically estimated to collect $6.5 billion in VAT in 2012 or almost $2 billion more than was collected in 2011!
This Mr. Speaker is smoke and mirrors at its best. These optimistic revenue figures will more than likely not be realized in 2012.
Mr Speaker, in the Review of the Economy 2011 pg 46, where the Minister of Finance attempts to report on the outturn for the last fiscal year it is stated that contributions to the HSF totalled US$2,890.0 m. This is trying to tell us that the value of the fund almost doubled in the year of mismanagement and economic collapse. This clearly cannot be correct since all other indicators point to the fact that this figure is $2.89.0 TT m. If this record is not corrected the Minister himself will quote this figure in the next 2-3 years as the true outcome of economic performance in 2011.
The Development Programme
Mr Speaker, of all the shortcomings in the out-turn of the last national budget both from the standpoint of performance as well as reporting, the most glaring is that which has to do with the Development Programme. Given the confluence of negative activities which combined to threaten our economic well being last year, it was clear to the Parliament that the major objective of the new Government should be to stimulate the economy by instilling confidence and executing the programme of works outlined in the Development Programme. It was in appreciation of this that Parliament approved a budget with a deficit of $7.5b with development spending of $3.5b which should have been carried out between October 2010 and September 2011.
Mr Speaker in his presentation last Monday, the Minister of Finance had virtually nothing to say about the performance of the Development Programme. The main reason for this was that the Government’s performance in this, like in so many other areas, has been nothing short of scandalously woeful. Of the $3.5b allocated the Government was able to only utilise about $1.5b. This is the development work spending which should have been done with dispatch to fuel the economy, an economy that was showing weak but positive movement that has been allowed to stall and go into recession as a result of the Government’s general incompetence and lack of appreciation of the nation’s urgent priorities. So that when the Minister of Finance talks now, Mr Speaker, about the need for economic stimulus he is just being evasive and facetious. He had a stimulus programme in the last fiscal year but failed to use it.
Mr Speaker, the Government’s inability to perform in the Development Programme is inexcusable given the unnecessary deleterious effects that this failure has had on the economy and on the lives of tens of thousands of citizens. The Government had no real funding difficulty during 2010/ 2011. They had the leeway to borrow as approved and they got the $1.7b windfall from the tax amnesty. They just did not care, it was only when the end of the fiscal year began to stare them in the face that some hurried attempt was made in the last quarter to try and get something done. Even so the final outturn remained dismal.
By way of example Mr Speaker, in the Ministry of Local Government with only one month to go, there was a mad scramble to award a series of contracts across the country, on a constituency basis. As a Parliamentary representative I am quite happy to liaise with any Minister for the service of my constituents but I am very uncomfortable with being asked to name contractors for construction job awards particularly in a questionable system where competitive pricing and transparency seem to be clear casualties.
It is the view of the PNM that contracts are to be determined by approved public service processes directed and controlled by public servants. It is a dangerous development for Parliamentarians to be invited to select and name contractors for awards especially when the value of these awards is arrived at in a crash programme, without reference to the necessary appropriate technical input. Politicians and contractors gathering in a hotel to divvy up the construction budget is not an acceptable procurement process and this must be frowned upon by all right thinking citizens. This new development has all the ingredients for mismanagement, waste and corruption which should form no part of the execution of the Development Programme.
Payment to Contractors
Once again this issue of payment to contractors is before us as a matter to be disputed. It was this Minister of Finance who in September 2010, quite erroneously, attempted to convince us that contractors’ liabilities had largely been discharged since he had made a payment of more than $2.0b to them. When challenged, the Minister had to admit that it was one of the misses. This was deemed to be a mis-reporting incident. Subsequently, there had been many public announcements of contractors having been paid yet the issue does not go away. Now when confronted, with the inaccuracies of these statements Government spokespersons deflect the concerns of contractors by saying that they have intractable documentation issues. One state enterprise is now saying that non-payment has to do with forestalling massive fraud on the part of contractors who now, if owed $2m are likely to claim $50m.
Mr Speaker, whatever explanation or spin the Government puts on it, the naked facts are that there are many contractors with overdue certified claims in their possession for which payments are not forthcoming.
Mr Speaker the real cause of the problem can be found in Appendix 4 of the Minister of Finance’s Draft Estimates for 2012 under the Current Account tables you would see the 2011 estimates of revenue listed at $40.8b with a projected deficit of $657m . The revised figure is $41.8b but with a surplus of $1.62b. All this means Mr Speaker is that the Government is simply not paying its bills. All of this is continuing to have a crippling effect on the economy.
Decline of the energy sector - A National Disaster in the Making?
In the late seventies, Trinidad and Tobago witnessed the birth of the National Gas Industry, with the launching of the Point Lisas Industrial ESTATE.
We remember the classic phrase of the Rt Hon Dr. Eric Williams, the Father of the Nation, as he turned the sod
“Sugar has divided us! Wire Rods will bring us back together!”
Those words, forgotten by many, remain paramount in the minds of the Party which I now have the privilege and honour to lead.
A review of the Birth and Growth of the Energy Sector during the past 25 years in Trinidad and Tobago will show the establishment of:
· 8 Ammonia Plants
· 7 Methanol Plants
· An iron and Steel complex
· 4 Trains of LNG
· The growth of electricity to a peak of 1500 MW from 300 MW
· The production and utilization of natural gas from 3500MMCM IN 1970 to 33,000MMCM in the first nine months of 2010/ 2011.
· The establishment of one of the most successful Gas Processing Plants
· A per Capita GDP of 1980 figure of US$5,699 to US $17,044 est.2010
We have heard it said that this only became possible because the P.N.M. Government gave away the natural gas.
What are the facts?
The N.G.C. is probably the most profitable company in the Caribbean – with after tax profits of:
$2.1 bn 2006
$2.9 bn 2007
$3.0 bn 2008
$1.6 bn first half of 2010
Is this the result of giving away? Or, is it that the policies and strategies in the monetization of our natural gas was the correct one.
The Trinidad and Tobago model of its Gas Sector is now known and admired throughout the world. Many developing countries with new found natural gas are now trying to follow that model.
But, where are we today?
We are witnessing the rapid decline and fall of the Energy Sector – not resulting from any international economic conditions but clearly from decisions or lack of decisions over the past fifteen (15) months when this UNC/PP Government came into power.
The decisions taken without explanation have led to:
· The cancellation of the ALUTRINT project
· The abandonment of the ALUTECH R&D Programmes
· The withdrawal of ESSAR
· The withdrawal of the Gas to Polypropylene Project
· The indefinite deferring of the AUM 2 complex
· The abandonment of the extension of the East Point Lisas site and the proposed Marine Facilities
· The abandonment of the Union Estate Industrial site at La Brea
· The abandonment of the completion of the Marine Facilities at La Brea
Let us examine more carefully those decisions of cancellation and abandonment.
The Energy Sector was on the verge of creating a buoyant and sustainable downstream subsector, based on the natural gas industry. This had been an elusive goal to which a great deal of effort was dedicated over the period 2003 – 2009:
· Production of Aluminium
· Production of Plastic
· Production of Flat Steel Products
· Production of Urea Ammonia Nitrate and Melamine (UAM)
· The creation of a new Petro pole in the Southwest Region - Palo Seco, La Brea and Point Fortin
· Increasing revenues from the LNG Plants
· A new Fiscal regime to encourage more Exploration & Production effort
These efforts have now gone to naught!
I must remind this House, that Trinidad and Tobago has had changes in Government since 1986.
But, and this is an important but! Contracts approved by the Cabinet and signed off by Agencies of the Government have always been considered sacrosanct and fully respected – until now!
The P.N.M. Government in 1992 – respected the Commitment and Contract given and entered into by the N.A.R. Government – classic example, the upgrading of Petrotrin refinery.
The Panday U.N.C. Government in 1995 respected and honoured the agreement on the LNG Project reached by the P.N.M. Government. Today we have trains 1, 2 3, and 4 as our country’s economic lifeline.
The reputation of this country has always been very high but is now sadly eroded. This U.N.C. coalition Government, without receiving explanations or consultation with contracted parties have cancelled or abandoned major investments and other contracts.
Our latest count reveals that at least US$5 Billion of foreign investments have been lost through these decisions of abandonment and cancellation.
What is more in the long term, is that potential foreign investors no longer have that feeling of comfort that changes in Government will not affect any previous final agreements. Result
· No new Projects
· No increasing Gas Markets
· No Drilling and Exploring for Gas to meet expected demand
In simple words, the Energy Sector is facing a rapid decline that will prompt a national disaster if fortune does not favour us in the short to medium term.
Mr. Speaker there are some issues which need to be put squarely before the national community so that we could all appreciate where we are and how we are going in the energy industrial sector. The recent RYDER SCOTT Report shows that at current consumption rates we have 9 years of proven gas left for our mature gas based industries. This is cause for serious concern in view of a slew of issues surrounding rectification of this challenge. The situation becomes even less comforting when one considers that the last bid rounds were anything but successful. In one instance 11 blocks were put up for auction and only three were found to attract suitable bids. In the case of the deeper environment the outcome was no better resulting in the Ministry having to re visit and re-open a bid which initially was thought to be unsuitable. The numbers in the current budget documents are also a little scary since they demonstrate how far behind we are with a national drilling program necessary to give us the comfort of moving probable reserves to proven reserves in a timely manner. The Review of the Economy documents indicate that whereas in 2005/2006 we were drilling 40000 metres in exploratory activity and this increased to 45000 metres in 2008 by 2009 we were down to 11000 metres and 2010 to mid- year 2011 we were doing 2700 meters of exploration drilling. Whereas we were drilling an annual average of 10 to 12 exploratory wells 2006 to 2008 in Oct 2010 to 2011 the number is zero. Even as this is the situation the Government spokespersons persist in talking about how successful the bid rounds were and how rosy the situation is.
Last year we heard a lot about the cross border gas from the TT / Venezuela Loran- Manatee field, spoken of in such a way that we were led to believe that an agreement was imminent. This is of such importance to Trinidad and Tobago that if any significant advance had been made it should have attracted the attention of the Minister of Finance. His silence on this matter causes one to think that, like most other things UNC, nothing has been achieved and the talk was just more Public relations overstatement.
Having damaged the investment climate, having created political instability in the Cabinet arrangements the Minister of Finance comes once again trotting out project names with no real information about the likelihood of any of these coming on stream within the fiscal year.
Reliance.......................What exactly is that? Who are the principal investors? Is there an investment decision on this? What is the size of the investment? When will it commence and where is it to be located?
Methanol to polypropylene........... Is this the same BASF-Lurgi plant of 3 years ago? If so I am advised that the prospective investors have long since withdrawn and the Government knows that.
Methanol to Acetic Acid.............. The technology for this plant’s product is patented to known multi- nationals. Can the Government provide confirmation that these companies have provided the necessary license to this potential investor announced by the Minister of Finance?
Malic Anhydride............. Who is the investor? What is the size of the investment and when will it break ground?
Given the situation with gas supply at this time, is gas available for these plants and if so is it available at a competitive price. If so what is that price? The Government should have no difficulty in stating the gas price here since for decades these colleagues of mine on the other side, when in Opposition, demanded that gas prices should not be a commercial secret and in so far as it was not provided to them they accused everybody of corruption. Over to you now! We are waiting for your compliance with your own recommendation.
The last Minister of Energy announced AUM II with so much aplomb that we confidently expected a groundbreaking during her tenure. Nothing has happened so far and instead of the Minister reporting to us as to why this major expectation is stalled he simply comes and re-makes the announcement as his own, as a new project of foreign investment.
Mr. Speaker, what is the real story with AUM II. This is a 1.9 billion dollar follow up to AUM I which was commissioned in October 2010. The expected principals in AUM II are the same people who the Government is currently locked horns with over MHTL (CLICO Plant). This matter is souring rapidly and is more than likely moving inexorably towards a bitter arbitration. The Government nonetheless expects these, their MHTL partners to proceed nonetheless with a major new investment while they are fighting a loss of trust issue elsewhere. Under the circumstances the Government must tell us if an investment decision has actually been entered into between investing partners. If so, who are these partners? Is the Government going to be a partner? And what is the exact date of commencement of the project? Without this information, the Government could just be blowing bubbles.
While all of these mirages are advanced as imminent activity this Government is sitting on $20m USD worth of industrial equipment which was procured for the ALUTECH project. This equipment is lying in a warehouse somewhere out in the East apparently abandoned and forgotten. The programme involved the intended use of SANGS proprietary technology which ALUTECH acquired to develop high value motor car parts from aluminium. The absence of the smelter project is immaterial to this initiative since the raw material could be sourced from elsewhere. A building under construction to facilitate this industry was 30%-40% complete when this Government came into office. The project has apparently been abandoned and left to rust and the equipment is incurring storage costs as it deteriorates. E-teck appears to be heading for the chopping block to meet its projects and vision, guilty of the crime of being PNM initiatives.
Mr Speaker, given our very successful and long experience in operating state and private sector businesses in the areas of exploration, production and refining of oil, as well as our more recent breakthroughs in monetizing gas reserves through power generation and down-streaming from the well heads coupled with the impressive profile of the Point Lisas Industrial Estate, the Government of Trinidad and Tobago and our national pool of highly trained technical people now have the opportunity to move out into those areas where we have skills to market and an interest to invest. This should be particularly important to us now that our own hydrocarbon province is maturing, depleting and appearing to be less and less attractive to the kind of investments that are directed to the new “hot” locations such as West and East Africa, as well as northern South America. The diplomatic work was done in Africa to pave the way for a meaningful participation by Trinidad and Tobago in the new initiatives, acreages and finds that others with less credentials than us deem attractive to their purpose.
We were first in line with the Ghanaian initiative but the last tumultuous year of the UNC bacchanalian mis-management has severely hampered our thrust here and original options may have been diminished or, sadly, even be lost. The Minister of Finance or his colleagues owe a duty to report to the people of Trinidad and Tobago to tell us what happened in Ghana. Are we still interested? Are we still in? Is any work going on and what is the Government’s view of the prospect for our involvement in ventures such as are possible here?
Previously the PNM had indicated a willingness to put Energy Policy under Parliamentary review by a Standing Committee on Energy. The purpose of this was to ensure that there be some measure of informed agreement and certainty of policy which would be immune to changes of Government. Given what has happened recently, what is happening now, and the need to wade into deeper waters with ensuing stronger, swirling currents in which we are small fish with our best prospects still connected to the hydrocarbon industry, this notion of a firmer energy policy formulation initiative is something which is definitely confronting us now and Opposition support to make it work for the people of Trinidad and Tobago will definitely be forthcoming, if placed before us by a Government that is serious.
Mr Speaker, these issues have long gone past the stages of dreams. We need to act and to act promptly and wisely. An objective appreciation of our role and place in the hydrocarbon market sees our competiveness, on the wane and whatever opportunities beckon us both locally and on the outside require our best thoroughbreds and not oxcarts.
We need to discuss the idea of the creation of a properly structured National Energy Company with the skills and backing to enter and make room for Trinidad and Tobago to market our expertise in the relevant areas of interest. This is the only way we can realistically sustain and advance our development and grow our wealth in the coming decades of this the 21st century.
Mr Speaker this is 2011 not 1962. Time is not on our side.
It has been said, with some conviction, that efforts should be directed towards expanding the non-energy sector.
The P.N.M. Government took a decision to attract investments - local and foreign - in the non-energy sector.
Using the success of models used elsewhere, and the ‘near-shore’ geographic advantage of Trinidad and Tobago, the Tamana e-TecK Park was conceived, planned and under construction. The key to this Park was:
· Excellent Infrastructure
· Presence of a University, The technologically biased University of Trinidad and Tobago (UTT).
While not yet fully abandoned the Government’s treatment of this institution leaves us in no doubt as to the future that the current administration prefers for UTT. Perhaps, the Minister of Trade and Industry will determine the plans for the completion and the strategy for populating the Park with the Hi-Tech, High-Value employment opportunities.
We are faced with a major crisis in these critical areas and total silence from the Minister of Finance.
Cancellation and abandonment are easy and instant sometimes even politically popular. Rebuilding and restoring confidence take years!
I call on the UNC Government to promptly inform the national community how it plans to restore the confidence, trust and excellent reputation that Trinidad and Tobago enjoyed over the past years, a reputation which it has so sadly diminished in less than 18 months.
Mr. Speaker, I am sure that you are not the only one who is fed up of hearing about the need to diversify the economy from people who cannot convince you of any tangible and believable pathway which can really contribute in the context if not the scale of the energy sector.
The first real possibility of that happening was the creation of Tamana Park (TIP), the efforts of E-teck and the spawning of UTT. These institutions targeted national development in the information age. In today’s world any country vying to become a developed nation must be able to not only have the trappings of a technology driven economy but also compete effectively in the new global economy. Further, no nation can claim to be developed without a truly diversified economy. The TIP/ UTT objective is to evolve towards a knowledge-based economy and then to leverage the attributes of this economy. In this quest the education system is critical in developing the calibre of human resources required to create and innovate as well as produce pertinent information/ knowledge and subsequently utilise this for the creation of wealth. This system is required for the development of skills in areas of entrepreneurship and innovation that could foster research and development. This is what Tamana Park, E-teck and UTT are all about. The UNC Government’s cold shoulder to all these efforts is very worrying indeed since with their record of cancellation the creeping abandonment, aimed at these initiatives, will see us with no platform for real diversification in an increasingly uncertain hydrocarbon future.
The economic and institutional framework which these units provide are the right environment for development by addressing myriad issues such as the protection of intellectual property, promoting the development and use of technology, facilitating foreign investment and improving the quality of life by addressing social issues. The part-built physical structures appear to be abandoned by the budgeting process. The human is being terrorised by the stress of uncertainty.
No country like ours can progress in a meaningful way in today’s information age without a developed communication infrastructure. ICT has transformed and revolutionised many businesses and economies. The national imperative therefore, should be to expand and enhance access to and adoption of state of the art ICT infrastructure, while developing our people to exploit the capabilities of this vehicle. The primary strategic intent in developing TIP is to progress the agenda of sustainable diversification of the local economy which would be realised through returns to the Gross Domestic Product (GDP) by fostering the development of new industries and job creation from business activities on and off the Park. The defined roles for TIP in progressing the country’s economic development agenda include:
· To be the first Science and Technology Park in the Caribbean
· To be the premier institution for academic research as well as development facilities that are critical for diversifying the non-energy export base and facilitating industrial expansion.
· To house the main campus of the University of Trinidad and Tobago
· To accommodate national and international organizations and institutions
· To be the main platform and model for a knowledge driven economy through the capture of viable industries and the creation of job opportunities for highly skilled citizens of Trinidad and Tobago.
While it is recognised that this project has a pivotal role to play in the country’s development it is but one aspect of other efforts that are required to achieve the much sought after sustainable diversification.
It would be a tragedy of immense proportion if this vision and effort as well as the investment already made, is sacrificed on the altar of political pettiness, if only because it had a gestation under the PNM.
It is our fear and the country should also fear that the silence of the Minister of Finance coupled with the expressed hostility of some of his colleagues, this escape hatch into real diversification is about to be closed through a lack of understanding. These fears can only be allayed if the Minister of Finance identifies the relevant support for the effort and make the necessary comforting statement of commitment to the TIP and UTT initiative. The substantive Ministers just do not understand.
The people of Trinidad and Tobago should take note of the fact that this Government has embarked on a programme to build an extension of UWI in Debe, a programme which is either absent or very difficult to find in the national Budget of 2012. Even while this is so, the Government announces in this Budget another university programme in Tobago without the necessary financial allocation.
Mr Speaker, criticism is always going to be that necessary ingredient of public scrutiny if we are to get the best out of ourselves both at the personal and national level. However, sometimes in the political arena we can become overly critical and replace the need for balanced criticism with outright demonization. When this happens, such practitioners find themselves not being able to turn back even though disaster beckons. They then find themselves having to slavishly defend for the sake of saving face or disowning their own progeny through naked untruths or stilting revisionism. Such is the situation that the current Government has found itself in as it seeks to grapple with a number of public policy issues facing the people of Trinidad and Tobago at this time.
This phenomenon is best demonstrated by our very presence in this building this morning. Mr Speaker, I am sure that it will surprise you and most people in Trinidad and Tobago to know that after all that has been and is being said about the construction of these “tall buildings”, that they are symbolic of the worst of Trinidad and Tobago and PNM governance; that this Waterfront Project was in fact a UNC initiative, almost signed, sealed and delivered to RGM in 2001. As Minister of Planning and Development in 2002, I had the project reviewed by Kamal Mankee ,Permanent Secretary, in the Ministry of Finance and a report was presented which showed, by analysis, that whilst the project was worthy of support the structure of the shareholding and inputs left the state with the short end of the stick. On the basis of this report the Cabinet was advised and the RGM gift was withdrawn. Cabinet placed the project in the hands of UDECOTT with a mandate to manage this UNC concept project of the high-rise hotel, car-park, superior office tower, etc.
The only significant change the PNM made to the concept was the addition of Tower D, in which we now reside. This came about when the PNM took steps to pursue the idea of establishing an International Financial Centre (IFC) which would have been housed here in this building. Here was a Government, after review executing a project initiated by its predecessor for the benefit of the people of Trinidad and Tobago. The UNC coalition will do well to learn something from this if they are to serve the people as they profess.
If you listen to PNM detractors in the Government you would not believe what I have just told you but the documents are there to prove it at the Ministry of Finance and the Cabinet Secretariat. As far as political expediency goes these buildings were labelled as extravagant, ego massages of demented minds in the PNM. Their own UNC project!
From my own standpoint there is no fundamental difficulty with converting a moribund waterfront with its grimy galvanised sheds being transformed into economic infrastructure and useable, saleable office space. The difficulty most people had was the demand for the necessary accountability within the state enterprise manifested through efficiency in construction after proper procurement practices which were geared to eliminating favouritism and corruption. Where such conditions appear to be lacking, I make no apologies for demanding it.
But Mr Speaker where does that leave us as a people?
Have we learnt anything? When the Minister of Finance spoke, about the land for development at Invaders Bay, he went out of his way to mention that this is prime real estate, reclaimed and built at great expense to the tax payer, a project of the PNM unmentioned on this occasion. This project created a property worth billions of dollars for the State, executed against the objections of some persons. As of today, the development authority for that land resides in a Cabinet minute which gives UDECOTT the go ahead to proceed with the installation of roads and utility services. The intention was to make fully serviced plots of high value and variable sizes available to a wide entrepreneurial market. This property ranks among the most valuable piece of real estate in Trinidad and Tobago. Recently, without any announcement from the Government that a new Cabinet position had been arrived at, for the disposal and or the development of this land we saw in the media a developer indicating that he had procured $2 million dollars of development plans for this property which he hopes to procure. It was also stated that 19 ministers had reviewed the plan and they all liked the project which involved the development of the whole area by one investor. It was not long after this publication that the Ministry of Planning and Development put out a request for proposals (RFP) requiring proper detailed outlined plans and financing arrangements etc., from experienced developers, who were given 6 weeks to respond. Notwithstanding reasonable objections to this narrow window of opportunity provided to the wider public, the Government proceeded to ignore all such concerns. We await the final outcome of this one.
I must tell you Mr Speaker, the last time a UNC Minister “gave” the foreshore to a favoured developer, who also spent $2 million dollars preparing a plan for development of the Cocorite to Maraval River seafront, a PNM Government stopped it and today that section of coastline remains open to the public and is to remain so until another Cabinet reverses the existing PNM position.
The argument here is that there is too much talk and no action or too little action. The Development of the TT Biz link and the single electronic window, E-tendering and E-auction, Modification of the Insurance Act are all PNM ideas and plans that were well advanced when this government took office. There is nothing new here.
TT Biz link should have been completed in December 2010. Here we are looking at 2012 and still taking about rolling out this project and computerizing Customs and Excise division. This is central to making TT a better place to do business by easing the cost of doing business. Harmonizing TT BIZ link with Asycuda is not a forward looking step nor does it carry TT very far.
E-tendering and E- auction were experiments which were well advanced under the PNM. How many auctions were held in the last 16 months that this government has been in office? Where is the Committee that was established to advise on this project? Where is the Electronic transaction bill and associated legislation brought to this Parliament by a PNM Government?
NIS PENSIONS AND ALLOWANCES
The announcement by the Minister of Finance that the Government intends to increase pensions will be welcome news to the thousands of persons who felt betrayed by the Government mis-print of its campaign promise to raise senior citizens grant to $3000 per month. We are very happy for those who would receive the increases for, heaven knows, many families desperately need the extra dollars.
This having been settled we have a few questions for the Minister if Finance on how he intends to proceed to deliver on the promises.
The first question we have for the Minister is this. When you misprinted the promise of $3000 per month for everybody over sixty, during the Election campaign, was it your understanding then that the Central Government would have been relieved of its liabilities then and you would have passed a severe piece of the burden onto the Fund of the NIS in such a way as to imperil the NIS if serious increases in contribution rates are not effected?
When the last Government passed legislation in 2007 (by an amendment to the Finance Act) to, among other things, increase the minimum pension under the NIS to $2000.00 a month, it did so with the agreement/ recommendation of the NIB. To buttress this it also increased the rates of all NIS benefits at the same time. When this was done the NIB had complied with the requirements of Sec. 56 of the National Insurance Act (NIA). This section of law makes it mandatory that an actuarial review of the system must be conducted before any changes can be made to the benefit and contribution rates of the NIS.
The changes made in 2007 included increasing the contribution rate to 11.4% but implementing this increase over the years 2008, 2010 and 2012 in order to cushion the impact of this increase on both employers and employed persons. All benefit improvements were however implemented in full from January 2008.
Increasing the income that is to be subject to NIS contribution (the income ceiling) to $10,000.00 and increasing the minimum pension to $3000.00 per month represent changes to the contribution and benefit structure that requires an actuarial review to be conducted. The following questions therefore arise for the attention and answer by the Minister of Finance before the debate is over:
(a) Was an actuarial review of the NIS done since the 7th review was laid in Parliament in August 2007?
(b) Was this review laid in Parliament as required by section 70 of the NIA?
(c) Did this review recommend a $3000.00 pension or any other figure?
(d) Did this review recommend a new ceiling of $10,000.00 per month, if not how was that figure arrived at?
(e) Did this review recommend an increase in the rates of the several other benefits paid by the NIS?
(f) What new contribution rate was recommended by the actuary or the National Insurance Board, based on the advice of the actuary, to support these benefit increases?
(g) What investment return on the fund was required to support the new benefit structure?
The key issue is whether this level of increase, $3000.00 per month is sustainable in an aging population and at what cost to current and future contributors to the scheme. It should be noted that the Minister of Finance should be aware that the 7th actuarial review which was implemented January 8th actually recommended a minimum pension of $1500.00 per month. However the NIB decided to implement a $2000.00 per month pension in an environment where the Board had the benefit of the actuary’s advice and his technical report. In order to do this the Board gave management a stretch target in terms of return on the investment portfolio.
A Minister of Finance who loves to talk about contingent liability will be aware of Sec.58 of the NIA which provides that any temporary insufficiency in the assets of the fund shall be met by monies advanced by Parliament, such advances to be paid as promptly as is feasible.
Mr Speaker, the Minister says that a “marginal increase” in NIS contributions would fund the new $3000.00 plus pensions that beneficiaries have been promised in the Budget presentation. The Oxford Dictionary defines “marginal” to mean, minor, borderline, not important. What are the facts?
Mr Speaker, currently the NIS has approximately 70,000 persons who are receiving long term retirement benefits at $2000 per month. The Minister of Finance proposes to increase this benefit by 50% to $3000 per month. This means that the monthly payout in pension benefit will be increased by $70m per month for an annual total of $840m. That is the increase that the Minister of Finance says is “marginal” and would be funded by an increase in the NIS contributions for the narrow bracket of contributing persons who earn above $10,000 per month. Mr Speaker since when is $.84b a “marginal” sum of money?
Mr Speaker of the 500,000 of persons currently on the NIS portfolio of contributors exactly how many are earning greater than $10,000 per month and are therefore qualified to be taxed as proposed to support the new $.84b expense? Is the Minister still prepared to say to all the citizens that in this budget he has not introduced a new tax for anybody?
The Minister introduced far reaching proposals like this with all kinds of implications but deliberately stayed away from using numbers to present the true picture. What then is the true picture?
Mr Speaker it is very unlikely that this $.84b increase could be obtained from the band of earners greater than $10,000 per month without a hefty increase above what prevails now. Is it not that only about 5-105 of the contributors are in this category?
Currently, the NIS pays out approximately $1.5b per year in retirement pension benefit. With the new proposal adding another $.84b this brings the annual payout to about $2.34b. Juxtaposed that with the current income of $2.65b this leaves less than $300m for investment after operational costs are factored into the equation. At present, the NIS is investing in the order of $950m a year to meet its current commitments. It follows that the minimum increase to be levied on the targeted group of contributors will have to supply approximately $600m in tax for investment income stability plus $840m for annual payout. That is a whopping $1.4b “marginal” indeed.
Notwithstanding whatever the Minister says it is more than likely that any actuarial studies applied to the total NIB portfolio, as required by law, will see significant increases in NIS contributions being recommended in order to keep the NIS sustainably afloat.
Much as I will like to see the beneficiaries receive their increases as quickly as possible, the Minister’s promise of doing this within a month or so is very optimistic. Does the Minister have the actuarial studies in hand and an immediate slot on the Parliamentary time-table?
Mr Speaker, the language that the Minister used to introduce the incorporation of the self-employed into the NIS could be confusing to some. The Minister said,
“We are seeking to include the self-employed in the benefits under the NIS”
Given what else the Minister said the following questions arise:
(1) Will 115,000 self employed persons immediately qualify for the $3,000 per month or similar benefit despite having made significantly fewer contributions than current contributors who have made lifelong investment?
(2) Is the principle of payout related to contributions to be replaced by equal payment for all contributors in each category?
Mr Speaker, if the UNC is a team of chameleons their CLICO positions is their mascot.
When the CLICO collapse took place in 2009 the matter of a bailout to prevent systemic failure was supported by the UNC. They did not object to the bailout, the consequences were too grave to be trifled with. It was a given then that public money had to be injected to save the situation regardless of who was who at fault- a matter to be determined later.
With the entry of the Central Bank and Government’s commitment to stave off a collapse some confidence was restored such that some depositors even began to roll over their deposits. The methanol market rebounded and the Republic Bank shares were strengthening. UNC in Opposition, no problem.
UNC in Government. “No way we supporting this. Depositors greedy they must pay. Take your licks.” Confidence destroyed has not been restored since.
EFPA is Ponzi scheme. Depositors have no protection because it was not an insurance policy under the Act so they have nothing to get. PNM Government wasted taxpayers’ money to bailout fat cats. The effect of this, confidence further eroded.
We doing you a favour you could have lost everything. Take 40 cents on the dollar and 20 years for deposits over $75,000 with no interest. Take it or leave it. CLICO problem solved, praise me.
Court!!!!!!! UNC Government wrong.
NEL 2 you will get back 92 cents on the dollar. Bonds to cover Republic Bank shares, you can trade bonds and get a variable return above market rate. This is much better than 40 cents on the dollar. Praise me for a year of useless turmoil. Total cost to taxpayers $10 b. Same as PNM’s cost of bailout. Praise me.
Mr Speaker, after all UNC unnecessary attempts to redo what they met on the CLICO issue, the final situation is as described approximately $10 b. This is what Standard and Poor’s who reaffirmed our AA rating had to say about the plan that was in place in 2009.
“ We removed these ratings from CreditWatch after evaluating the possible consequences and the cost associated with the Government bailout of one of Trinidad’s largest conglomerate: the CL Financial Group.......assuming no recovery from any assets sales we estimate a potential gross loss for the Government of about TT $9b which is 6% of expected 2009 GDP.” What this means is that all the confusion created by the UNC Government in trying to change the paradigm we ended up in the same place as far as cost is concerned.
The report further stated that Trinidad and Tobago solid fiscal profile which has resulted from high energy prices, gives the Government the fiscal and external flexibility needed to manage this potential debt burden as well as the current international financial crisis without materially weakening public finances. This being so what was all this about from the Minister of Finance who spent a year destroying the country’s confidence in our finances and the overall economy.
Mr Speaker following upon the collapse of NCB and The Workers Bank we the little people of this young nation almost lost faith in ourselves and in our ability to manage the basic building blocks of a modern Trinidad and Tobago economy. Thankfully a few good men and women came to the fore, picked up the pieces and ran with them to the finishing line. Some of these people run the FCB, a success story in this country if ever there was one. It is my recollection that when we assembled FCB out of the failed predecessor banks with Central Bank support there were those around the table who felt that if we got the recapitalisation money back we would have done well and if the new bank could reach a stage of development where it could be acceptable enough to be readied for divestment then we would have scored a winning goal. We have done better than that Mr Speaker.
Today if the Government takes a decision to divest some portion of the shareholding of the FCB the PNM would not find it necessary to oppose this move. What we will demand is that the Government in divesting the shares of FCB do so against the background that ensures that these shares are distributed to the widest possible shareholding thereby spreading whatever wealth that has been created in the process of nurturing this bank.
It is from here that we must express our deep disappointment and concern over the silence of the Minister of Finance who did not commit his Government to a policy which would have clearly signalled that for divestment of FCB shares special arrangements will be put in place for pension funds National Insurance Board, Trade Unions, FCB employees, Credit Unions and individuals to have a fair shot of accessing and owning affordable blocks of shares in the FCB.
Mr Speaker it is not too late to do this and we call on the Government to commit to such a policy before it embarks on any divestment of the shares of FCB.
The Revenue Authority
The Minister of Finance has spoken long and loud in this Budget on matters of compliance and penalties. We had no problem with the proposals here but how could we take the Minister seriously on this subject matter when the most critical area of non-compliance is left unattended by the Government’s stubborn refusal to unlock its self-afflicted political shackles and humbly accept that the Revenue Authority is a necessary ingredient in this compliance menu which the Minister so desperately wants to activate.
As a matter of fact they could make a day of it, they could call it the day of atonement and do all their backing back on the same day and get it over and done with this would take care of Land and Building Taxes constipation, it could take care of the Revenue Authority assassination and who knows, it could even take care of the still-born Alutrint. After all we are a warm and gentle fete loving people. They will survive and we could even hold the fete at The Centre of Excellence or at Vessingy Beach.
Mr Speaker, we of the PNM are happy to see that, finally, our colleagues on the other side have come around to agree that there is a significant role for the State in the housing construction if the country is to meaningfully attempt to meet the chronic shortage of affordable housing units. Up until now, this absence of a housing policy on their part is probably the starkest difference between the PNM and other political entities which ran the affairs of state. This is clearly demonstrated by the fact that whereas, it is possible to find PNM built housing units and whole communities all over the country from Charlotteville to Caranage, from Chaguanas to San Fernando, from Bon Accord to Arima from Sangre Grande to Couva and Mayaro, it is almost impossible to find a single housing development in this country that one can point to that was built by another government. On behalf of all the beneficiaries, who will now benefit from the new acceptance we say to our UNC colleagues “Welcome Aboard”. We have come a long way from the announcement by a UNC Minister that the Government has no place in housing construction and further that there is no need for a housing Ministry.
That having been said Mr Speaker, prior to 2008, it was a feature of the work of the HDC that blocks of housing units of various types and standards were being built and distributed to qualified, excited, and satisfied beneficiaries virtually on a weekly basis. This changed dramatically, immediately thereafter when the last Minister spent two and a half years ostensibly only repairing units while delivering few of them. This new Minister seems to be continuing the same vacuous talk so now, one and half years into his tenure, we are still hearing that 80% of the HDC units under construction are under repair together across two administrations this would amount to a period of 4 years of repairs to a programme which contains approximately 10,000 units at varying stages of completion which were built over a period of 2 years. Apparently after 4 years, we are now promised 4,450 houses completed from the stock of 2007. Unbelievable!
While I am sure that there are instances of shoddy workmanship that can be found within the housing programme an 80% figure warranting 4 years of repairs is clearly overstating the problem and is not a serious position. Any person who had the opportunity to build his or her own home will know the challenges of insuring adequate quality from even reputable contractors. One could therefore, appreciate the performance criteria in a mass housing programme. It would be instructive to learn if these same quality control issues are affecting the many Ministers who have cornered keys to their recreational dens at HDC Federal Villas in Federation Park or the senior Government Minister who operates from an air-conditioned “bachie”.
Now that the UNC is on board with some element of a national housing programme and are bulldozing farmers left right and centre and are air-marking large chunks of agricultural land for housing the population is now in a better position to judge the PNM on these issues. The same can be said about the mass housing to be constructed at Fairfield in Princes Town. When the PNM initiated this project it was described as unacceptable social engineering and the basis for PNM voter-padding now that it is to be funded by the Minister of Finance’s allocation to the Housing Ministry all is forgotten and forgiven.
Mr. Speaker, I wish to turn my attention to Tobago and the allocation by the UNC-led Government to the Tobago House of Assembly to manage the affairs of Tobago, in the next fiscal year.
Mr. Speaker, as we all are aware, I am a Tobagonian, and I must say, a proud Tobagonian. But before I be accused of bias towards where I was born - - as we say in Tobago, where my navel string is buried - - my comments this morning are based on the needs for all citizens, whether they reside in Trinidad or in Tobago, as well as on the need to allocate financial resources in an equitable and transparent manner for the development of all of Trinidad and Tobago.
In that context Mr. Speaker, I wish to put on record that the allocation to Tobago at $2.2 billion, contrary to what the Minister of Finance and his desk thumping cheer leaders will want us to believe, was done not out of the generosity or benevolence of the so-called caring Government. It was the minimum allowed under the Dispute Resolution Commission ruling of 4.03 percent. So, as the total national allocation increases, so does Tobago’s.
Mr Speaker, it was only a human thought I entertained that as part of the UNC’s newly found love for Tobago, the share of the national budget would have increased. Indeed, in the light of the recommendation by the Attorney General in his Green Paper on his own constitution for Tobago, I thought that Tobago would have received at least 6% of the national budget. But, just as the eyes of the Trinidad public have opened to the disrespect, the deception and the subterfuge and betrayal of the People’s Partnership Government, Tobagonians too have seen through the fiscal sleight of hand and the attempt to confuse, if not deceive.
But Mr. Speaker, there is a history to all this! Let me refresh the Minister’s memory.
He will recall that, formally, on June 30th, the Tobago House of Assembly dutifully and responsibly, submitted its documents to the Central Government, on time, and in accordance with the law.
What was disheartening, and I want to repeat “disheartening” if not shameful, Mr. Speaker, was the fact that in the month of September, the Chief Secretary and the Secretary of Finance met with the Honourable Minister of Finance and his team - - which included the Member for Tobago West and Minister in the Ministry of Finance; and the Member for Tobago East and Minister for Tobago Development - - to discuss the allocation to Tobago.
To the surprise of the Tobago delegation; the Minister had not read the Tobago’s statement submitted almost three months earlier, and was totally unaware of the Comprehensive Economic Development Plan for Tobago which have provides the strategic underpinnings for Tobago’s development since 2005. The sad part of all of this is that while the THA representatives vigorously defended Tobago’s interests, the two TOP representatives, perhaps on the instructions of their leader, sat in total silence, mystified and hypnotised, in the presence of their UNC masters.
Mr. Speaker, the theme for the THA’s 2012 Budget sent to the Minister is “Protecting Tobago’s Heritage”. The statement by the Secretary of Finance highlighted several sub-themes:-
· Embracing Higher Education;
· Marketing Tobago’s Tourism;
· Monetizing Tobago’s Culture and the Arts;
· Resolving Land Issues;
· Strengthening Indigenous Entrepreneurship and expanding the Small and Micro Enterprise sector on the island; and,
· Reforming Constitutional Arrangements.
Calibri;mso-bidi-theme-font:minor-latin">Among various proposals that the Assembly outlined in the document that it wished to discuss with the Central Government were:
minor-latin">the offer of loan guarantees by the Central Government to special tourism sector entities, depending on their circumstances;
minor-latin">the removal of the 10 per cent hotel tax in Tobago;
minor-latin">enhanced tax credits for renovations to the tourism plant and for new structures;
minor-latin">the removal of the VAT on certified purchases by the tourism sector;
minor-latin">the introduction of special incentives to property owners for the development of Scarborough;
minor-latin">the creation of duty free shopping at the Esplanade in Scarborough and at Charlotteville;
minor-latin">the grant of special enhanced fuel concessions to carriers engaged in airlift to Tobago;
minor-latin">new and enhanced security arrangements at all our ports;
minor-latin">improvement in the coordination of air bridge and sea bridge services (with schedules available at least two months in advance) and implementation of maintenance schedules of equipment to coincide with periods of low or non-peak demand; and
minor-latin">special arrangements for Caribbean Airlines flights to Tobago from new North American gateways.
Not only have these proposals been contemptuously ignored by the Central Government, but the Minister sought to impose various solutions on Tobago without consultation. The Tobago East growth pole announced in last year’s budget comes to mind.
· How is the THA to be involved in the proposed Tourism Action Plan?
· What role is there for the THA in a Tourism Development Fund for Tobago?
· On whose land will the proposed integrated Campus be built?
· And what about the acquisition, ownership and use of Friendship Estate?
· And who will determine the “whereas” and “hows” of a free zone in Tobago; and who was consulted on this matter?
The fact is that the Central Government has sought to sideline Tobago and punish the people of Tobago for their continued support for a PNM Administration in Tobago. We simply have to look at what they have done with key aspects of the development programme. Consider the following allocation.
Scarborough Library including furnishings
Shaw Park Cultural Complex
Cove Eco-Industrial and Business Park
Tourism Rolling Plan
Windward Road Special Development
Mini Malls in Signal Hill, Calder Hall and Plymouth
The plan is clearly to starve the Assembly of needed development resources; and divert resources for the exclusive use of their Minister of Tobago Development.
And, in the usual condescending way of this UNC Government, the Finance Minister recommends to the Tobago House of Assembly that it spends its resources expeditiously. But Tobagonians were quick to see the thinly disguised trap. What the Minister really wants is for Tobago to spend out its allocation before time, then come begging cap-in-hand as Hochoy Charles did some 10 years ago, only to be humiliated by his so-called UNC partners, with the resulting financial pain and anguish for Tobagonians.
My consultations with the Chief Secretary indicate clearly that Tobago will not be ensnared by the wiles of the Minister. Nor will Tobago be lectured to on fiscal management by the representative for either Tobago West or Tobago East. Indeed, I think the Minister of Finance can take a lesson from the THA by providing to Parliament monthly reports of the revenues and expenditures of the Central Government, just as the THA now does for its area of responsibility. That would be a major step towards fiscal transparency and fiscal accountability.
Mr. Speaker, let me take this opportunity to mention also the question of social safety nets. Last year, the Minister of Finance allocated for Tobago $8 million to CEPEP and $17 million to URP in the 2011 budget; but Tobago’s URP resources lasted barely three months and not a single penny was received for CEPEP, because the Prime Minister thought that, wearing her “court house clothes”, could walk in to Tobago and set up a CEPEP Programme - - just so. Well, she will have a chance to wear her court house clothes, in due course when the matter appears in the High Court. As for fiscal 2012, CEPEP and URP workers must now depend only on the THA to secure their continued employment.
Mr. Speaker, as the new Tobago House of Assembly celebrates its thirtieth anniversary, constitutional reform and internal self governance are central to Tobago and Tobagonians. I wish to remind this honourable house that over the past three years the people of Tobago participated in a process to achieve consensus on constitutional reform for the island. It is therefore disheartening to know that efforts are being made to hijack and undermine the process by the Prime Minister and her chief lieutenant, the Attorney General, aided and abetted by the two Tobago MP’s and the Tobago Organisation of the People.
I invite the Prime Minister and her team to follow the progress of the people’s process to culmination, an exercise started in Tobago, by Tobagonians, to complete the struggle for Tobago’s right to internal self government. In this regard, I wish to inform Parliament that on Thursday 20th October, 2011, two bills will be laid in the Assembly’s Chamber for debate. This independent consensus document is the only legitimate expression of the wishes of the people of Tobago and should be adopted for debate in this Parliament, with any necessary amendments arising from the debate in the Tobago House of Assembly.
Mr Speaker, where did this name “Magdalena” come from to be attached to our premier hotel investment in Tobago? I gather it was the brainchild of the Minister of Tobago Development. Well I am surprised and more than a little bit put off by the choice. My Tobago East colleague and I are of the same era and my recollection of the ‘Magdalena” is that it was an old stinky vessel, riddled with rust and infested with huge bed-bugs. Such was the condition that after a 10 – 14 hour sailing from Trinidad we Tobagonians had to sun our grips to try and eliminate the bugs to prevent them from getting into our homes. The Magdalena did the route with its companion vessel the Blue Star. Even though they were both of a similar standard, I would have much preferred the refurbished hotel to be called the Blue Star. That sounds less than the name of a bed bug.
The Regional Fast Ferry
Mr Speaker, an effective ferry service between the Caribbean islands is an initiative that any Caribbean person would be delighted to support. As a matter of fact one can go on to say that in the absence of a proper functioning sea ferry service the movement of Caribbean people and her goods is firing on one cylinder thereby seriously impairing our potential for development and growth. Our almost total reliance on the expensive inter-island air services for the movement of regional and international tourists severely limits the numbers who can be encouraged to visit our islands.
One only has to look back at the yeoman service that was provided to the region by the two Canadian gift vessels the Federal Maple and the Federal Palm as they plied our seas for about 2 decades during and after the breakup of the Federation. One of the indelible memories of my own experience is sailing on a Federal boat all the way from Jamaica to Trinidad at the end of my first year of study at the Mona Campus, stopping and savouring every major island from Antigua to Grenada on the way home. Such a private sector venture with Government facilitation without too much underwriting will immediately find the support of the Opposition.
Mr Speaker, having said that, it is critical to point out that we in the PNM make a clear distinction between a traditional-ferry service and a fast-ferry service for the inter-island solution for sea transport in the wider region. We recognise that a fast-ferry service especially for small populations over long distances is simply too expensive for the economies from the Caricom to sustain. Not to mention that a fast-ferry will not be able to effectively and competitively transport the kind of cargos which make up the Caricom trade.
Fast –ferries consume huge amounts of fuel and they are very finicky in response to changes in the sea state. Idyllic as the Caribbean may be there are seasons when the fast ferry will have to differ to Mother Nature or transport patients at high speed to the hospital.
The Trinidad and Tobago experience should tell our Government that the $200m plus annual subsidy that is required to maintain the Trinidad and Tobago fast ferry link for the people of Trinidad and Tobago which we must all bear as an integral part of our own nation. Any attempt to replicate that service over 1000 miles with financial exposure for the Treasury of Trinidad and Tobago is not on as far as the PNM is concerned.
It is in this context that the Minister of Finance must do more than tell us that this idea of a regional fast ferry which the Prime Minister announced as a throw-away done deal with $10 fares “ will be a private sector initiative and the Government will encourage proposals to make this happen”. Just what exactly does that mean? Mr Speaker, given the Prime Minister’s grandstanding on this particular matter at a Heads of Government meeting in St Kitts, the Minister of Finance must come better than that he must now be in a position to spell it out or hold his peace. Is the Government proposing to be a sponsor or investor in this venture, if so by how much? Is the Government going to be a guarantor then to whom and for how much? Are there any feasibility studies on a fast ferry to show this workable $10 fare? Will there be a subsidy component, if so how much is Trinidad and Tobago in for?
All these are questions which must be answered before we set sail on any regional fast ferry spawned on prime ministerial vaps of corrective generosity to persons who may be ill prepared or who are proposing to be smarter than us.
Mr. Speaker, it is trite that the state has a duty to accord safety and security to the citizens of Trinidad and Tobago and visitors to our islands. It is equally trite that the phenomenon of crime, has presented one of the major challenges that confront this society.
In a constitutional democracy, it is expected that the state, in so doing, must do so as citizens go about their lawful, routine, everyday affairs, whether this involves the journey to and from school, activities at the workplace and in the pursuit of the worship according to one’s religion.
It has never been our understanding or expectation, that we all have to be ‘couped-up’ in our homes, unable to attend to our businesses, restricted in our social and recreational activities or be called upon to give up our constitutional rights in, order to enjoy such protection. The state does not have to put the entire society on pause in order to protect us!
Mr. Speaker, It has never been our understanding that citizens of this country, whether law-abiding, law-breaker or outright criminal, should be ‘picked-up’ without evidence and in so doing, be denied of the usual protections of the law and our constitution. Parliament, in passing the Anti-Gang legislation did so in the full expectation that all laws enacted in this country require the procurement of evidence before any provision can be invoked against any citizen, for any offence, no matter how trivial or how serious the breach.
Mr. Speaker, the current State Of Emergency has indeed brought some benefits, albeit, for the most part, perceived and temporary, in the view of the more careful observer. For one thing, it has exposed the fact that the state security apparatus, particularly the Police Service, had tremendous excess capacity and did not previously exert sufficient impact on the lawlessness in our society.
Another benefit is the overall reduction in serious criminal activity during the period of the emergency. However, it would be foolish and short-sighted to think that this development would be sustained, if we do not put sustainable and meaningful measures in place, in order to convert this temporary benefit to a more long term trend.
Mr. Speaker, the Government has continued along the well-established practice of the allocation of one of the largest chunks of the budget to National Security. Yet, apart from the new nomenclature “21st Century Policing”, we can discern nothing that is new or that which was not previously implemented, in response to crime.
Whether it has to do with efforts to make the police service and law-enforcement generally more effective, by way of training and the provision of requested resources; whether it is by way of improvements in the Criminal Justice system; or whether it has to do with the more wide-spread application of technology; or the advancement of the program for the rehabilitation of offenders; or by way of social interventions to direct and keep our youth away from a life of crime, happily for us of the Opposition we have seen virtually more of the same.
Mr. Speaker, as an Opposition, we saw it as prudent, sensible and in the public interest to provide moral and where necessary, parliamentary and constitutional support to the Government, in its work to relieve the citizens of the fear and other manifestations of crime. It is still our view, however, that there is nothing that was achieved during the state of Emergency which was not normal Police work and which could not have been done without the avalanche of negative aspects of the State of Emergency. We have spent over an extra $100 m in the last six weeks on extra policing. The question is, was this the best way to police the country at that and other cost?
We supported the Bail Amendment Bill 2011. We supported the so-called “Wire Tapping” Bill. We supported the bill to make Firearms Offences more severe; and we also supported Mr. Speaker, the now mis-applied Anti-Gang Act, which became law in Trinidad and Tobago on the August 15, 2011.
In so doing, we put at the disposal of the Government, an admittedly draconian weapon, the likes of which has never been seen before. This was intended for the Government’s ‘legitimate use in the fight against crime’.
Mr. Speaker, in the hands of a responsible Government, this legislation along with the wire-tapping legislation, this was much as it needed to take on the criminals, with the full support of the Parliament of Trinidad and Tobago - that is to say Government! Opposition! and Independent! As well as the army of law-abiding citizens of Trinidad and Tobago.
Unfortunately Mr. Speaker, in their over- exuberance and pursuit of their short-sighted political agenda the Government botched it and landed us in a pickle where in some cases, innocent persons may have been arrested; criminals may have been set free; confidence would have been lost in the Police Service; confidence would have been lost by the police service in itself, as well as bringing our criminal justice system into grave disrepute.
Mr. Speaker, when we lent our support in these matters, we did so because we fully understand the role that a responsible PNM Opposition must play in bringing about Peace, Safety, Security and the general well-being of our citizens, and indeed visitors to our shores.
But let me, Mr. Speaker, with equal rigor, make it abundantly clear, that we, as the Parliamentary Opposition, will not sit idly by - do and say nothing, if and when this Government seeks to abuse the rights of the citizens; or otherwise act in an oppressive and unlawful manner.
In this regard Mr. Speaker, we wish to place on the public record, our sincere admiration to our independent Judiciary and the independent office of the Director of Public Prosecutions, as both of these institutions stood resolutely between the citizenry of Trinidad and Tobago and this rampant Government, supported by a meekly co-operative Commissioner of Police, along with his deputies, when very recently the order of the day seemed to have become ‘lock them up and we will get the evidence later.’
Mr. Speaker, this intervention by these institutions reminded us all, not least the Government, that there is indeed a final arbiter in this constitutional democracy. Mr. Speaker, in light of the recent experience alluded to above, the Opposition intends to propose an amendment to the Anti Gang Law to allow for the intervention of the office of the Director of Public Prosecutions, before any citizen is to be charged under this very deliberately draconian legislation.
Mr. Speaker, public trust and confidence in Law-enforcement are critical ingredients, if the respective agencies have to interface meaningfully with our citizens and to succeed in the fight against crime. We in the Opposition hold the distinct fear that this trust and confidence in law-enforcement is one of the first casualties, in the recent fiasco.
Mr. Speaker, in this country’s continued response to law-breakers and criminals, we would expect to see the Government engage in immediate action to rebuild and regain the public trust; we demand independence and professionalism from the office of Commissioner of Police. In this regard, professional policing and professional decision-making is what we expect and demand!
We expect and demand continued investment in the training of law-enforcement personnel, with a focus on improving detection methods and statistics.
We expect and demand further advancement in the CC Tv camera programme and police response teams.
We expect and demand a sustained gun-retrieval exercise, not being content, as the Government now seems to be, with the retrieval of a relatively few firearms over the past few weeks - some of which Mr. Speaker, bore features that are reminiscent of Francis Drake and Henry Morgan and The Pirate One-Finger Jack.
If this is achieved Mr. Speaker, naturally there will be far less guns in the hands of reckless youngsters, who contribute significantly to the mayhem in our society.
We expect as well, continued investment in the social programmes that have worked for the benefit of young people, rather than the surreptitious scaling-down threatened by the Government.
Finally Mr. Speaker, we expect and demand the advancement of the rehabilitation process that this Government met in train, within the prisons of Trinidad and Tobago.
Mr. Speaker, we will continue to monitor the Government as it carries out the critical role of providing security to people and property in this country.
As the Government congratulates itself and the targeted public officers express their gratitude for the $1000 allowance it is instructive for us to examine how this inequity came about in the first place. Public officers of the various security services must remember that it was this Government, in the form of the Prime Minister herself, which, in a meeting with the Police Service Second Division, decided to override the collective bargaining process and substitute a pensionable increase for an allowance which, as it is paid by the Exchequer in the same way as a salary increase, it makes no contribution to the pension earnings of the hard working officers who do not deserve to be so tricked.