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Howai: Time to deal with subsidies

Minister of Finance Larry Howai yesterday admitted that something must be done to address the country’s high transfers and subsidies.
Responding to questions while at the Employers Consultative Association’s (ECA) pre-budget meeting at the Marriott Hotel, Invaders Bay, Port of Spain, Howai said he agrees that it is something Government has to deal with and manage so that it does not create dislocation.
“It is in fact an area we need to continue to focus and it is an area that you can’t significantly change while you might want to do so almost at the stroke of a pen, there is dislocation that takes place as a result of that we need to manage it,” he said.
However, he pointed out that although the Appropriation Bill, which was about $3.8 billion had about $1.6 billion in transfers and subsidies, about $1.2 billion was capital expenditure projects.
“But because of the accounting works in that investments—some of the capital expenditure projects comes from the IPL which is the Infrastructure Development Fund—part of the transfer subsidy but is really a transfer for investment purposes.
“Similarly as the transfers for the savings we do for the Heritage and Stabilisation Fund when we transfer money to the Heritage and Stabilisation Fund it is picked up as transfers and subsidies but is really a savings going forward to the future. So there is some disentangling that needs to take place as far as the overall numbers are concerned, but it does not take away from the point. I am not trying to suggest that we don’t need to deal with it (the transfers and subsidies). Certainly there is some need to disaggregate the numbers and then determine how best we are going to deal with each part of it,” he added.
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