...No major election goodies in budget
Caribbean Airlines would have to fly on its own financial wings. The $50 million fuel subsidy, which generated complaints both within the Caribbean and in the United States, is to be removed.
And from January there would also be a 100 per cent increase in the fines for littering—from $2,000 to $4,000 for individuals and from $4,000 to $8,000 for corporations.
There were also “sin” taxes on the gaming industry as well as hefty increases in the fines for those committing the offences of illegal quarrying (from $200,000 to 500,000) and illegal exportation of subsidised fuel (up to $500,000). There was a 25 per cent increase in the custom duties for new and foreign-used high-end cars (over 2499 cc).
These were some of the measures in Finance Minister Larry Howai’s $61.4 billion budget which was presented in the House of Representatives yesterday.
However Government would continue to subsidise the Tobago airbridge, he stressed. “The removal of the fuel subsidy will not impact the ticket pricing policy,” Howai assured. Howai later said CAL would have to “restructure” its operations to accommodate the new financial reality.
The homeowner would not be affected in this fiscal year by any changes in property tax regime.
The budget is based on an oil price of US $80 a barrel and a gas price of US $2.75 per mmbtu. The Minister said Government was projecting a total revenue of $55.041 with expenditure of $61.398 billion. That would leave a projected deficit of $6.357 billion or three per cent of GDP.
Howai’s budget did not hit the man-in-the-street’s pocket. It also did not deliver any major election goodies.
Instead it steered the ship steadily, avoiding major waves.
The Minister announced a Motor Vehicle Accident Fund from January 2014, using the funds from the 6 per cent tax on insurance premiums. This would be used to compensate victims sustaining bodily injuries from accidents involving vehicles driven by uninsured drivers.
On the issue of gambling, the Finance Minister stated: “Gambling has the potential to lead to criminal activity as well as to devastating consequences for a small minority of customers, including minors and compulsive gamblers. There is a clear need for regulation,” Howai stated. He said new legislation would control the operations of registered casinos. He said the licence fee for betting offices which conduct betting at fixed odds would be increased and all pool betting shops will be required to computerise their operating systems to facilitate tax compliance.
The Minister announced that there would be a “health card” which would serve as a means for all persons wishing to access health care services. “The national health card system will ensure that we have a register of all patients accessing the health services. “The information captured and managed by this system will provide the basis for the development and implementation of a national health insurance system,” Howai said.
For cancer patients, the Minister announced that the construction of the long-awaited oncology centre would begin this month with a scheduled completion in January 2016. The estimated cost of the construction and outfitting of the centre is $891 million.
There was also relief for persons needing dialysis. Howai said Government had put in place an appropriate infrastructure with best practice standards for the delivery of quality services for dialysis patients. “With effect from November 1, 2013, only those private health-care, institutions which meet best practice standards will provide, at Government’s expense, dialysis services to citizens to Trinidad and Tobago. This initial arrangement will last two years, and will allow for the delivery of 12 sessions per months at the maximum sum of $950 per session.
Health facilities earmarked for construction and expansion would include the Penal hospital and rehabilitation centre, Sangre Grande hospital and health centre, Rio Claro hospital, Chaguanas District Health facility, Point Fortin Hospital, Chancery Lane Teaching facility and Couva Children’s Hospital. He said Government also expand and upgrade the Arima District health facility, Couva District Health facility, Toco Health Centre, Palo Seco Health Centre and Carenage Health Centre.
Howai said Government would present a Green Paper on campaign finance reform before the end of this year with legislation targeted for next year. He said legislation for the Constituency Development Fund would also receive attention.
With respect to land and building tax, he stressed it would be introduced in three phases, starting firstly with industrial land; secondly commercial property. In phase three, “we will impose a tax on agricultural lands and on residential properties with a deductible allowance to provide relief to certain agricultural land owners and low-income homeowners,” he said.
The Minister said a draft of the Occupational Pension Plan bill was done and consultants engaged to undertake technical work for- a) increasing survivors’ benefits; removing the cap of 33 1/3 years of service on pensions accruals, introducing contributions to public service pensions; improving portability within the public service; reducing the vesting period from five to two years and introducing pensions for daily paid employees of Government.
Education would receive the biggest allocation—$9.820 billion, followed by national security- $6.497 billion. Health would receive $5 billion and public utilities $3.7 billion. Next in line are Housing ($2.7 billion), Local Government ($2.4 billion) and Works and Infrastructure ($2.4 billion), followed by Transport ($2.3 billion) and Agriculture ($1.3 billion.