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Sweeteners from Howai
Senior citizens’ pension increases, a minimum wage of $15 an hour, another tax amnesty, mortage concessions for homeowners and compensation for protective services officers killed in the line of duty. These and other concessions were part of the 2014-2015 budget sweeteners presented by Finance Minister Larry Howai yesterday, a year away from the general election.
With the theme “Empowering our People through Sustained Economic Growth and Prosperity,” the $64.6 billion budget was the largest to date—$3 billion more than last year’s $61.3 billion packag —but carries a reduced deficit of 2.3 per cent of GDP. It was also the final leg of People’s Partnership (PP) budget themes over the last four years of the term, starting with former Minister Winston Dookeran’s $49 billion package in 2010/11, “Facing the Issues: Turning the Economy Around.”
Yesterday, Howai started and ended his two-hour-and-ten-minute presentation by lauding Prime Minister Kamla Persad-Bissessar’s leadership as transformational. Howai added: “This administration has traversed a very challenging period over the past four years but we have remained resilient and strong. As we have systematically overcome the several challenges which had confronted us, we are progressing with confidence and optimism to a renewed mandate in 2015. “The welfare of our state is being safeguarded and we are convinced this budget will continue to consolidate our vision of a stronger, fairer and smarter T&T. We have delivered on our commitments made in May 2010 and done so within a coherent, cohesive framework and in the context of fiscal prudence.”
Education got the largest portion of budgetary allocation—$10.1 billion—with National Security second. Last year Howai said he was working towards balanced budgets by 2016. Yesterday, he said the plan was on course to meet the 2016 objective. He gave a glowing account of the economy, saying: “As a nation we are better off today than we were four years ago.” He said the medium-term outlook was for an excellent economic performance, although there are underlying issues that need to be addressed if T&T was to sustain growth. Howai’s announcements involved a number of positive changes which will have an impact on a large cross-section of the population in the coming year. Persad-Bissessar has said elections are constitutionally due by September 2015 and will be held when they are due, not before. The budget debate begins at 10 am on Friday with the Opposition’s reply.
Trinidad and Tobago's Economy Status
• Unemployment 3.6 per cent
• Inflation 2.8 per cent
• Public-sector debt 43 per cent of GDP
• Gross official reserves US$10.2bn
• Gross foreign direct investment US$3.3bn
• Heritage and Stabilisation Fund US$5bn
• Innovation Fund $50m
—Finance Minister Larry Howai
• Deficit 2.3 per cent of GDP.
• Total revenue $60.3bn.
• Total expenditure $64.664bn.
• Pegged on oil price of US$80 a barrel and gas price of US$2.75 a mmBttu.
• Oil sector revenue $21.2bn.
• Non-oil sector revenue $39.1bn.
• Education and training $10.1bn.
• National Security $6.9bn.
• Health $5.5bn.
• Public Utilities $3.9bn.
• Housing $2.8bn.
• Local Government $2.6bn.
• Works and Infrastructure $2.5bn.
• Transport $1.9bn.
• Agriculture $1.3bn.
• Tobago House of Assembly $3.7bn.
• Public Sector Investment Plan (PSIP) $8.2bn. (GA)
Slices of the pie
Among key announcements, Howai hiked the minimum wage from $12.50 to $15 hourly, effective January 1, 2015. It was $9 an hour in 2010. Senior citizens, whose pension was $1,950 in 2010 when the PP took office, will receive $3,500 from next month following a $500 increase yesterday. This assists 84,720 people. The pension will be adjusted with the receipt of other pensions, with a cap of $4,500. Some 35,000 retired public officers who received $1,950 a month in 2010 will now receive $3,500, also with a $500 increase.
Also announced was a new fund from which could be drawn $1 million, which will be placed in the estate of members of the protective services killed in the line of duty, The disability grant, which was $1,300 in 2010, has been increased to $1,800, assisting 24,100 people. The public assistance grant will also be increased by $300, assisting 24,797 people. Government’s second tax amnesty will apply to tax penalties and interest for late filing of returns and late payments of income, corporation and VAT taxes and the business and environmental levies. It also applies to returns, penalties and interest on outstanding tax liabilities for years of income up to 2013. The amnesty, effective immediately, expires on March 31, 2015. The personal allowances for people aged 60 and over will be increased from $60,000 to $72,000 for calculation of income tax, from January 2015.
An estimated 11,300 self-employed people earning $3,000 and less will be covered by the national insurance system from January 1. Self-employed people over 57 will receive a one-off payment equivalent to three times their contribution. Those in the 50-56 age group, who contributed fully in each year before their retirement, will be credited with additional contributions to allow them to receive a minimum monthly pension.
Also new is a savings bond allowing small investors and pensioners to buy bonds in small denominations, including $1,000 a bond. Housing mortgage concessions, including a new five per cent mortgage programme for households with a combined monthly income of more than $10,000 and less than $30,000, will benefit 26,100 applicants in the Housing Development Corporation framework and a similar number in the private sector Government also increased the tax allowance from $18,000 to $25,000 a household a year on mortgage interest in the year of income for first-time homeowners for five years.
Howai also said agricultural lease issues for former Caroni employees were being expedited for completion in 2015 and a similar measure was in place for those with residential lease issues. He also outlined the $500 monthly allocation for babies born to underprivileged families for the first year, and the $410 million Constituency Development Fund. The fund will only be operational subject to the passage of law, associated regulations and implementation of appropriate control. Tax relief will be given on imported hybrid and electric-powered vehicles, which contribute to reducing gas and diesel use.
On rumours that the Gate programme would be halted, Howai said: “Let me assure, this administration will keep Gate secure and sustainable.”A national qualifications and credit framework soon to be introduced will strengthen the system’s quality, he added. Howai also said: “In 2015 we anticipate that close to 100 per cent of the population will receive a 24/7 supply of water.” Among revenue-earning streams, Howai announced a 50 per cent increase in fines for driving-related offences. He also doubled praedial larceny fines and announced a taxation and regulatory framework for tagging and taxing gaming machines from January 2015.
• Private-sector management for Napa’s hotel
• Government campus: Customs & Excise Division ready next month, Immigration Division by March, BIR by August 2015 and Education and Legal Affairs buildings by September 2015. Unused buildings will be offered for sale/lease
• Repairs to Stollmeyer’s Castle, Whitehall in advanced stage, work on President’s House and Mille Fleurs begins next year
• Consideration of an alternative route to Chaguaramas
• Incentives for food/beverage industry creative arts/entertainment, yachting sectors
• Legislation to protect HSF, including increasing the amount below which withdrawals cannot be made
• Flood alleviation programme for South Quay/City Gate
• Walkover and canopy with staircase near Cuthbert Circular, off Diego Martin Highway
• Designs for highways in Princes Town/San Fernando, Wallerfield/Manzanilla
• Establishment of T&T National Games
• $1bn for interceptors, patrol boats to “blockade” Gulf of Paria
• World-class marina within Tobago Plantations site
• Unit Trust legislation expanding mutual funds market capabilit.
• India’s Quatro Services PVT launching card-processing centre locally
• Motor Vehicle Authority by March 2015 at Caroni, 13 access offices by September 2015
• HCU bond issue programme early in new fiscal year
• National centre for differently-abled by December, 24 buses for elderly/disabled
• lnvestors for VMCOTT, National Helicopters Services Ltd
• 35 CNG fuelling stations by April 2016
• Increased allocations (12 per cent) for Servol Adolescent and the Parent Outreach programmes (GA)
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