People who receive National Insurance pensions, prospective homeowners, the disabled and national security officers are the big winners in Finance Minister Winston Dookeran's $54.6 billion budget which was presented in the new Waterfront Parliament yesterday.
The minimum NIS pensions would now be $3,000 a month, bringing it in line with the amount paid to old age pensioners, (which is non-contributory). The old age pension (or what used to be called the senior citizens grant) had been increased last year to $3,000 in the People's Partnership first budget.
For the second year in a row, Dookeran's budget has a fiscal deficit—this time—of $7.6 billion. It is the fourth year in succession that the budget has a deficit. The Budget is predicated on an oil price of US$75 a barrel and a gas price of US$2.75 per mmbtu.
The budget has no new taxes but the Minister is hoping to increase his tax take. And in order to achieve this, the Minister has tightened tax administration, imposing stiffer penalties against tax evaders (including those in the gaming industry) and tax delinquents. He is hoping to reduce the fuel subsidy by imposing more severe penalties for those caught in the illegal export of diesel.
He is tightening up on the GATE expenditure through more rigorous "pay-for-performance" monitoring of GATE.
The budget was the first to be delivered during a State of Emergency since 1970. And therefore the allocation to the Ministry of National Security, which in terms of ministerial allocations was the largest, reflects the times. He announced a street and community patrol in partnership with the private security sector beginning with 250 new motorcycle patrol officers.
Of the total expenditure, Education and Training (which includes the ministries Education and Tertiary Education) receives $8.1 billion; Infrastructure including Works, Public Utilities and Transport—$6.9 billion; Health—$4.7 billion; National Security—5.1 billion; Agriculture—1.9 billion and Housing- $1.9 billion.
Dookeran also announced that Government would begin some limited divestment of state companies- First Citizens, PLIPDECO and Trinidad and Tobago Mortgage Finance (TTMF).
Dookeran said in order to make home ownership more affordable, Government had decided to reduce the interest rate on mortgages from six to eight per cent to five to seven per cent. Another major benefit for prospective homeowners will be a $50,000 subsidy for homes costing $200,000. This, he said, would benefit over 13,000 homeowners and would become effective during 2012. And the land for the landless programme would allow 10,000 successful applicants to construct a two or three bedroom unit. The Minister said Government planned to complete 4,450 housing units.
For the differently abled, Government would pay grants to single mothers of special children where the household income is inadequate to support the family. Disabled children and individuals and their families will automatically qualify for food support under the Food Card programme. They would also be entitled to $5,000 scholarship. And contributions to NGOs would be tax deductible, he said.
Members of the Prison Service, Fire Service and Defence Force would join Police Officers in receiving a $1,000 special monthly allowance.
He said Government anticipated that some US$2.5 billion would be invested in the energy sector in new and ongoing projects in 2012. Additionally, petrochemical companies would add another US$1.4 billion in new downstream projects in 2012, he said.
He said Government is hoping to bring into being a Regional Fast Ferry Service (between Trinidad and Tobago, Grenada, St Vincent, St Lucia and Barbados) which would be a private sector initiative, he said. Others include the East POS projection , the construction of a Solar Manufacturing Complex using solar energy in silicone, glass and integrated photovoltaic manufacturing industries. Government would also establish a National Infrastructure Bank for providing financing for projects supportive of public sector aims.
In the Parliament Chamber, Dookeran received thunderous desk-thumping from his colleagues as he announced the various measures. For example, when he announced that the long-awaited Scarborough General Hospital would be delivered to the people of Tobago by Christmas, that brought a lusty round of desk-thumping. Anil Roberts shouted "Praise Allah!".
Several times the Speaker Wade Mark had cause to rise because the PNM MPs were giving picong. The Speaker even threatened to put Diego Martin North East, Colm Imbert, out of the House, which in itself brought loud desk-thumping.
Dookeran said Government expected revenues of $47 billion —$18.1 billion from the energy sector and $28.9 billion from the non energy sector. He said Government estimated that 52.7 per cent of the financing of the $7.6 billion deficit would come from domestic sources, while the remainder would be sourced from external sources including multilateral financial institutions.
The Opposition Leader will reply on Friday at 10 a.m.