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Howai on election claims: There’s always politics
In all budgets there is always a “bit of an overview of politics,” said Finance Minister Larry Howai, responding to claims that the 2014/2015 budget presented in Parliament on Monday was an election budget. Howai was speaking on CNC3’s panel discussion on Monday night. “As long as there is a political environment there is no government that puts together a budget that causes them to lose the election, so in that sense there is always a bit of an overview of politics in every budget that you do.
“In this budget the request from one of my colleagues for funding would have been in the region of about $120 billion... almost double and so it takes a while to sift through that,” Howai added. He said it was critical to recognise the political reality one was dealing with... achieve some kind of fiscal balance and to find methods to bring in revenue to meet the expenditure.
“It was quite an interesting exercise to get to this point where we have reduced the deficit to 2.3 per cent of GDP which is a little bit better than what we have even expected. Last year the deficit would have been somewhere around 3.6,” Howai said. On how the budget has positioned T&T for sustainable growth, economist Avinash Persaud said growth was gathering momentum and confidence was growing.
“That has afforded the minister the ability to spend. That said, I think you could not characterise this budget as a giveaway budget. “I have seen a few election budgets over the years and I have never seen one with a deficit of 2.3 per cent or less and I reckon the minister is lucky to outperform that figure of 2.3 per cent,” Persaud added. He said in the macro-economic sense the budget could not be described as a giveaway.
“If one were to find fault, this would be an incremental budget. We targeted the right things and we are pressing along those things but are we really pressing with sufficient impatience? That would really be the question,” Persaud asked. He said he believed the energy subsidy was holding back the country from being a competitive economy and urged that initiatives should be implemented to reduce such subsidies.
“We can use that money in ways which can nurture and create a high-tech, high-skilled competitive economy,” Persaud added. On stimulating the economy, managing director of Scotiabank Anya Schnoor said it was important for the banking industry and financial industries to have stability as that was how they were able to predict the future.
He added: “We want a foundation that really provides stability to the market and what we have seen in the budget is an incremental change and incremental growth and strengthening of the financial system. “Dealing with the Clico issue is important... and putting that behind us... and we want to see the Insurance Act passed. We want to see some other legislation that is going to strengthen the financial industry.
“What we need to see is perhaps those things happening a little quicker, because that is the foundation of our financial system. “When you know the rules of the game and we have a financial system where people feel confident then that leads to further investment,” Schnoor said. The panel discussion was hosted by Nirad Tewarie, CEO of Amcham.
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