Finance Minister Colm Imbert’s $63 billion budget which “seeks to re-establish fiscal discipline” came as no surprise to political analysts Dr Bishnu Ragoonath and Dr Maukesh Basdeo.
Giving an immediate response to the fiscal package presented in Parliament yesterday, Ragoonath said a lot of what was said by Imbert had been anticipated.
“I won’t say it is an unfair budget based on the context of the falling oil price. In fact I think they have done a lot better than I anticipated,” he said. Ragoonath added, however that he did not expect a decrease in Value Added Tax to be implemented so soon: “I expected that to be delayed.
The increase in income tax allowances, the increase in NIS and the other increases in OJT are things that they had to do in order to bring the economy on a level playing field.”
He added that the minimal increase in the business levy from 0.2 per cent to 0.6 per cent will not have any major impact on business profitability. “That increase is not significant but any increase that the business community has, they normally pass it on to the consumer.
The business community will experience an increase in the cost of goods based on the price of transport and they will pass it on to the consumer so cost of living will go up and that may have ripples in the economy. Taxi fares may also go up and that may increase the burden,” Ragoonath added.
He said the return of the property tax was inevitable and it was commendable that government decided to start with the old rates.
“The proposal that the PNM had in 2008 and 2009 was penalizing people in certain areas so they need to properly review that arrangement,” Ragoonath said. He said he did not agree with Opposition Leader Kamla Persad-Bissessar view that the budget was deceptive.
“There was no time to facilitate consultation so if I was Minister of Finance, I would have gone with projections put out by technocrats of the ministry and bring a supplemental appropriation bill later on after I hold consultations,” he said. Ragoonath said he supported the decision to raise taxes from the gaming Industry.
Basdeo said many of Imbert’s policies were in keeping with the economic realities and he commended government for its proposal to establish a General Accounting Office and independent Economic Research Unit for the Parliament. “I also agree with increasing the disposable income bracket as this will provide a safety net for the working class,” he said.
Basdeo said the policies seemed to be a continuation of what existed before 2010. The vice president of the T&T Contractors’ Association Ramlogan Roopnarinesingh said he was not surprised at the budget proposals. “The government has to find revenue, so raising the business levy and the green fund levy were expected but it should not affect the business community drastically,” he said.
He expressed support for the VAT reduction saying it will get more people to comply with the stipulations. “Raising the cost of fuel by 15 per cent also should not affect us as much. We have been subsiding fuel for many years,” Roopnarinesingh said.
Saying he was pleased with the budget, Roopnarinesingh said the business sector would benefit by getting more OJT apprentices. He said the Government did not have the money to start mega construction projects and many of the plans would have to be reviewed and re-prioritised.