2010-2011 Budget Statement laid in Parliament

Hon. Minister of Finance, Winston Dookeran, delivered the 2010-11 Budget Statement in Parliament today.  The Statement and related documents have been published on the Finance Ministry's website (kudos to the Ministry's staff for posting these online so quickly), and you may get them in PDF from the website's Publications section.

If you'd like to get the Budget Statement directly, click here.

My initial reaction is that it sought to satisfy many needs and appeared rooted in the People's Partnership's 2010 Manifesto.  It delivered on the Hon. Prime Minister's promise that there would be no new taxes, and no increase in existing taxes.  In fact it included several increases in tax allowances, such as the $18,000 per year mortgage interest allowance for first time buyers, and a doubling of the corporate tax allowance for any of their investments in culture (to $2 million per tax year).

However, despite its length (143 minutes) it wasn't clear how some things would be achieved.  Some things were deferred, the most significant being the widely suspected increase in the national minimum wage (wonder how the unions would feel about that).  Others were tackled head-on: the bail-out decisions for CL Financial Group and Hindu Credit Union customers, or cancellation of the rapid rail and Alutrint projects.  The explanation of our current national debt was announced in the very confusing, mangled manner that Min. Dookeran sometimes delivers, and doesn't appear to match what the Central Bank is publishing on their website.

It remains to be seen/heard just how most of the planned activities/initiatives would be funded, or when some fo the investment projects, such as the integrated UWI/UTT/COSTAAT campus in Tobago, would be completed.  The rest of the debate will commence on 14 Sep 2010, beginning with the Opposition Leader's response.  Hopefully, the other Ministers would be able to detail their Ministries' initiatives and the related cost-benefit details, e.g. the laptops, and water-taxi sales, establishment of the national innovation strategy, culture and heritage investments and health/savings schemes (e.g. Child Life Fund).

The budgeted expenditure is estimated to be TT$49 billion, and the deficit is estimated to be TT$7.7 billion or 3.5% of GDP. The budgeted revenues were based on an average oil price of US$65 and average natural gas price of US$2.75 per MMBTu.  Ral GDP growth is expected to be 2% and average inflation is expected to be 7% (which is half the value for July 2010; maybe they expect their drainage management plans to have an immediate impact on local food prices in 2011, which have been the main cause of our double-digit inflation in recent times).

Let us know what your feelings are as the debate unfolds, and check her periodically for follow-up articles in the daily press.