“The good life done!” senior economist Hayden Blades said yesterday as he summed up how citizens are likely to be affected by the budget to be presented by Finance Minister Colm Imbert on September 30.
Blades, who spoke at a Federation of Independent Trade Unions and NGOs’ (Fitun) pre-budget breakfast forum at Paramount Building, San Fernando, said: “We are in for an unprecedented era of economic contraction and we cannot borrow our way out of it. We have to reduce, reuse, reinvest.”
He said because Government has to reduce expenditure, more people are likely to lose their jobs and additional taxes could be introduced.
Noting that public servants are about 20 per cent of the labour force, Blades added: “If government cannot spend money to pay salaries, to pay wages, keep Cepep going, to keep URP going, to keep the 60 something state enterprises and statutory authorities going, then people going to lose their work.”
Blades said the great recession of 2008 was “the first salvo fired across the oil and gas bow” and recalled that the then Finance Minister had to revise the budget, but no one paid much attention because the money was there.
By 2010 things were looking better, he said, but the country was caught up with scandals involving government contracts, Calder Hart, Udecott and “cussing Mr Manning.”
“We were not studying that our lifestyle is dependent on this one oil and gas sector—80 per cent of the foreign exchange earnings, 50 per cent of government revenue, 40 percent of GDP—that one sector.
“Everybody else depending on that sector because is only when Ggovernment collect revenue from that sector the Government now inject revenue into the economy via spending policies, then everybody else make money,” he said.
“It only employs about four per cent of the labour force but it provides 40 per cent or 50 per cent of the government revenue and it is via that tranmission mechanism that we have been living the good life of T&T . . . ”
Blades said if the budget is pegged at $58 million, to maintain “our lifestyle ” a significant portion will go towards the senior citizens grant, cheap diesel, paying public officers and subsidizing the operations of WASA and T&TEC.
“But where will the money come from?” he asked, adding that in 2014 Government collected $19 billion in revenue from the energy section but only $1 billion this year.
Blades said Government’s expenditure will have to decrease and be shifted to other strategic areas of the economy to generate new income.
“If this broken to thief era does not convince us that we have to transform the economy and society nothing else will,” he said.
Sunity Maharaj, director of the Lloyd Best Institute, said change from the ground up is where the transformational impulse is for the economy, for the politics and for everything. She said right after the budget is read on Friday an assessment must be done on how it distrubutes the burden of adjustment.
“People will be willing to make a sacrifice if they can see that everyone is being called upon to make that sacrifice equal to their share of the pie,” Maharaj said.
