PORT OF SPAIN, Trinidad (CMC):

The Trinidad and Tobago government on Monday presented a TT$44.3 billion (US$7.38 billion) budget to parliament, outlining a host of taxes, as well as listing its achievements over the last 12 months.

But opposition leader Basdeo Panday, who is expected to give an official response to the fiscal package on Friday, described the measures as "shameful", adding they were "empty promises made over the last seven years".

In a three-hour presentation, Finance Minister Karen Nunez Tesheira said that the government would be providing stimulus packages to the manufacturing, construction, as well as small and medium enterprises to help revive an economy that has been hard-hit by the ongoing global economic and financial crisis.

She told legislators that the budget for 2010 is crafted in the context of projected real gross domestic growth of two per cent and a projected average inflation rate of seven per cent in 2009.

"The budget is predicated on very conservative oil and gas prices of US$55 per barrel for oil and a gas price of US$.2.75 cents per million cubic feet. Based on these assumptions, total revenue is forecasted at TT$36.6 billion (US$6.1 billion)."

She said on the expenditure side, the government intends to "appropriate TT$36.9 billion (US$6.15 billion) from the Consolidated Fund while we estimate that TT$9.4 billion (US$1.56 billion) in direct charges on the Consolidated Fund and expenditure under the Unemployment Levy Fund and Green Fund of TT$476 million (US$79.01 million)".

The finance minister said after adjusting for repayment of capital and contributions to the sinking fund, the "total budgetary expenditure for 2010 is TT$44.3 billion (US$7.38 billion)".

She said that for fiscal 2010, the projected deficit is TT$7.7 billion (US$1.28 billion) or 5.3 per cent of gross domestic product.

Stimulus packages

The finance minister said that the government would be providing stimulus packages for contractors in a bid to promote the competitiveness of the small and medium enterprises to support employment and production levels and foster national economic growth.

"The government will stimulate the construction sector by sub-contracting its infrastructure works to small contractors for building and refurbishment of community centres, early childhood care centres, police stations, recreation centres, schools, health centres and city borough sidewalks."

She said a 30 per cent mobilisation fee, up from 10 per cent, would be paid to contractors from the Infrastructure Development Fund "to assist contractors in initial purchase of material and services".

In addition, much higher loans would also be made available to persons in the small and medium enterprises sector and the government has also said it would provide assistance to the manufacturing and construction sectors through various tax amendments, as well as increase incentives for machinery and plant material.

But with almost immediate effect the government has increased the excise and import duties on locally as well as foreign-produced alcohol, beers and spirits, by as high as 30 per cent in some instances, resulting in revenue totalling TT$80 million (US$13.3 million).

In addition, motorists found using the Priority Bus route without an official pass would be fined TT$2,000 (US$333). A similar fee will also be charged for persons using illegal tints and driving a motor vehicle without a seat belt.

Motorists caught speeding, overtaking improperly and using a vehicle with defective lights will now pay TT$1,000 (US$166) up from TT$200 (US$33), while three-year drivers' licences have been increased from TT$200 to TT$500 (US$83.3 million).

The government has also announced a 50 per cent increase in the transfer fee for vehicles, with the authorities anticipating at least TT$85 million (US$14.01 million) in revenue from the new motor vehicles taxes.

Tobago package

In her presentation, the finance minister also announced a TT$2.2 billion (US$366 million) package for Tobago for a number of developmental projects.

The minister also announced plans for modernising the pension system for public-sector workers and parliamentarians, as well as improving the property tax that she said had been long outdated.

The finance minister said that while the country had not suffered as much as other Caribbean countries as a result of the global economic crisis, Trinidad and Tobago revenue last year had decreased by just over three billion dollars than had been budgeted for last year.

She said that the budget had to be revised on two occasions.

"Although the economy is strong and resilient and has withstood the worse effect of the global recession, this is no time for complacency. At both the individual and national levels, we must balance the need for spending to stimulate growth with the thrust to earn and save to secure a sustainable future.

"We must prioritise and exercise discretion ... in the deployment of limited resources as we chart a course for our nation's future," Nunez-Tesheira said.

"We must improve efficiency and productivity at every level to enhance our competitiveness in the global arena," she said, noting that the Manning government would continue its focus on trade, investment economic diversification and improving the country's economic and physical infrastructure.

- CMC