2008/2009 Budget Statement– “Shaping Our Future Together”

The Minister of Finance, Senator the Honourable Karen Nunez-Tesheira presented the first budget of the new PNM administration on Monday September 22, 2008. This budget was the largest in Trinidad and Tobago’s relatively brief history with Total Revenue projected at $49.46 billion, comprising energy sector revenue of $19.9 billion and non-energy sector revenue of $29.54 billion. Total Expenditure of $49.44 billion is also forecasted for 2008/2009. Of the total expenditure, Education and Training will receive $7,121.6 million, Infrastructure will receive $6,594.4 million and National Security will receive $4,731.4 million. The remaining is divided amongst Agriculture, Housing and Health.
Premised on an oil price of US$70 per barrel, a gas price of US$4.00 per mmbtu and a growth in GDP of 5.6%, this budget focuses extensively on initiatives that the government views as imperative if we are to attain developed country status by 2020. Of premier importance to the government are educational, social and development initiatives.
The country’s sound macroeconomic position was highlighted throughout the Budget Statement with the Honourable Minister providing the following statistics:
• GDP has tripled to $152 billion in 2008 from 2001
• GDP projected to rise to $169 billion in 2009, an increase of 8.5%
• External reserves increased to US $5.52 billion
• Heritage and Stabilization Fund investment of US$2.46 billion
• Unemployment rate down to 4.2%
The Energy Sector continues to contribute extensively to Trinidad and Tobago’s economic prosperity. This Sector supplies in excess of 50% of Total Revenue and will continue to do so for the foreseeable future. In this regard the Honourable Minister noted that Energy Tax Revenue in 2008 was approximately $8 billion higher than budgeted.

HIGHLIGHTS

Education and Training
Under the Government Assisted Tertiary Education (GATE) programme, presently the allocation for Post Graduate students at private institutions is 50% on an annual basis up to $10,000. Honourable Minister noted that this allocation will increase to$20,000 for Masters Level Programmes and $30,000 for PhD Level Programmes. This measure will cost an additional $40 million and will take effect from October 1, 2008.
Additionally in order to encourage the nation’s brightest and best students to continue their studies, the Honourable Minister proposed to grant to Trinidad and Tobago citizens with First Class Honours Degrees, scholarships up to the PhD level at any local or foreign institution of their choice. It is the Government’s intention that the recipients would be required to, upon completion of their studies, serve in either the public or private sector of Trinidad and Tobago or any other Caribbean country.

Health
The Government’s medium to long term goal is to establish a National Health System under which all citizens of Trinidad and Tobago will be entitled to a range of services at both public and private health institutions based on an agreed formula. The costing of the services as well as the design of the benefit package is due for completion by December 2008.
Since 2002, the Government has launched several initiatives to expand and improve the nation’s health care facilities. New health centres were built in San Juan, Petit Valley, Debe and Barataria and there are plans for the construction of facilities in Chaguanas, Diego Martin and Sangre Grande.

Housing
The Government will continue to focus on the provision of low income housing to persons unable to access houses from the private sector. Since 2002 to date the Government has initiated more than 32,000 housing starts. The Government’s Housing Policy also includes the Rent to Own Programme as well as the Approved Mortgage Companies Programme. Both Programmes are mechanisms through which the Government is attempting to make housing units more affordable for low-income earners.

Social Protection
There has been a significant reduction in the percentage of people living below the poverty line in Trinidad and Tobago, owing mainly to the Government’s poverty reduction strategy. With respect to the Targeted Conditional Cash Transfer Programme, the Government will increase the levels of cash transfers by approximately 35%. Furthermore, the Government is also working with the United National Development Programme and the European Union to develop creative solutions for dealing with poverty in the state.

Infrastructure
In an effort to decrease congestion on our nation’s road, the Government has proposed several measures, one being the construction of a Rapid Rail System. This project involves the construction of two express train lines with a total length of 105 kilometres. One line will link the nation’s capital to San Fernando and the other will run from Sangre Grande to Diego Martin. Financing for this project will take the form of Public-Private Partnership.
In terms of highway expansion, the Honourable Minister noted that in all areas significant improvements will be made that will eventually allow our citizens to travel from any one area of Trinidad to any other area of the country in under 2 ½ hours. These projects will be completed in three phases and will cost approximately $25 billion over the 8-year period of construction.

National Security
The Government’s comprehensive approach to crime fighting and national security involves the commitment of both the public and private sectors and community groups. The Government has vowed to boost the monitoring of cross border movement of illicit commodities through the delivery of three Offshore Patrol Vessels, six fast patrol boats, four armed helicopters and six interceptors by 2010. Furthermore the Honourable Minister cited the Government’s commitment to working with the community to reduce crime as well as enhance crime solving capability through its 2007 initiative “Policing for People.” This initiative involves the training of officers in community policing in an attempt to increase, over time, the public’s trust and willingness to work with the police.

How the budget improves our quality of life
• The minimum pension payable to retired public servants has increased from $1,650 to $1,950 effective October 1, 2008
• A free “Ferry Pass” will be given to persons 65 years and over for travel between Trinidad and Tobago
• The Motor Vehicle Tax on the importation of private vehicles has been increased effective September 23, 2008.
• The Government proposes to increase the price of premium gas from $3.00 per litre to $4.00 per litre
• The Government also proposes to remove the Customs Duty and Value Added Tax on the Conversion Kits for modifying from Gas to CNG kits
• Public Assistance grants have been increased up to $1,450 effective October 1, 2008. This measure is expected to cost $50.4 million and will benefit an estimated 21,000 people.
• The Disability Grant will be increased from $1,100 to $1,300, benefitting an estimated 17,000 individuals
• There will be an increase in the maximum Senior Citizens Grant from $1,650 to $1,950 per month
Conclusion
In closing, the Honourable Minister reaffirmed Government’s commitment to its most important resource – the citizens of Trinidad and Tobago – by stating that “the Government is committed to ensuring that ensuring that all our citizens have access to all the country can provide…no one should be excluded because of their economic circumstances.”
To Read the 2009 National Budget Statement