Rowley tells supporters higher-than-actual IMF projection
Monday, November 13 2017 @ 10:09 AM AST
Contributed by: AleemKhan
* JOB LOSSES SLOWED DOWN THIS YEAR
* MORE BORROWING IN 2018
* GOVT ENTERTAINS NEW ALUMINUM PROJECT
* TRINIDAD & TOBAGO'S 12.5% WELLHEAD ROYALTY RATE STILL AMONG LOWEST IN THE WORLD
* PETROTRIN LOSING MONEY ON EVERY BARREL IT REFINES
* TRINIDAD & TOBAGO LEAVES $7B-$9B IN TAX UNCOLLECTED
Trinidad and Tobago Prime Minister Dr Keith Rowley came up with his own version of what the International Monetary Fund (IMF) is projecting for the economy while speaking to party supporters at an annual political convention at the Queen's Park Savannah in Port of Spain yesterday.
"According to IMF projections, our economy is expected to grow at a rate of 3.6 % in 2018 and 3.2 % in 2019," Rowley said yesterday when the actual IMF projection for 2018 is 1.9% and then through 2022, 1.4%, as seen below from the IMF press release on T&T dated November 6, 2017, and the World Economic Outlook (WEO) of October 2017.
The still oil and gas-rich Trinidad and Tobago lost most of its oil and gas revenue in fiscal 2017 (October 2016 to September 2017), the prime minister of the Caribbean twin-island nation told People's National Movement (PNM) members.
"Taxes from oil companies have declined from TT$25 billion in 2008 to an unbelievable TT$0.472 billion in 2017: a decline of 98%. Other energy sector revenues, taxes and royalties have dropped from TT$15.7 billion in 2010 to an abysmal TT$2.1 billion in 2017: a
decline of 87%," Rowley said.
"At the same time Transfers and Subsidies, i.e Government payments towards water, electricity, pensions and a range of Social Support etc, have increased from TT$17 billion in 2007 to TT$27.8 billion in 2016: an increase of 64%. Under these conditions, wisdom dictates that we must decrease total expenditure from the all time high of TT$62 billion in 2015 to TT$50 billion in 2018. This rather unpleasant, but very necessary assignment, fell to your PNM Government to make the adjustments with care and compassion so that any associated pain as anticipated would be minimized as far as we are able to," said Rowley.
SOURCE: IMF press release on Trinidad and Tobago, November 6, 2017
SOURCE: IMF WEO October 2017
OTHER KEY TAKEAWAYS FROM ROWLEY'S ADDRESS:
JOB LOSSES SLOWED DOWN THIS YEAR
* Rowley said: "We are seeing positive indicators in the slowing of the retrenchment rate where we have received notices of 1,134 persons to be retrenched over the period January 2017 to September 2017 compared to 2,384 persons for the same period in 2016. For the period September 2015 to September 2017, we have received to date notices of 4,829 persons to be retrenched."
* Today we have 121,363 students in our primary schools, 80,983 in our secondary schools and 55,000 more at the tertiary level.
In order to sustain this priority in this period of austerity we have budgeted to spend $10m on textbooks this coming year, $200m on school feeding,(58,000 breakfasts and 80,000 lunches) $60m on Primary School grants. We provide student transport for 17,000 students per day. We have budgeted $720m for UWI and another $200m for UTT.
* 7000 teachers in Primary schools and 5185 in Secondary schools
* As of September 2017 we cater for 93,677 Senior citizens, all of whom are guaranteed a monthly payment to a maximum of $3,500 at a total cost of $3.5 billion.
* Additionally we support 25,728 other persons/ families, with monthly payments ranging from $1150 to$1750 on the Public Assistance Grant program. This is maintained at a cost of $400m per annum. A further $500m is made available to assist another 23,625 citizens who benefit from the Disability Assistance Grant program. Outside of this commitment the state also provides another$90m in the form of General Assistance grants, Geriatric Adolescent Partnership for home care as well as Subventions to Non-Governmental Organisations and three (3) Statutory Boards.
TROPICAL STORM BRET VICTIMS PAID
* Last June we had to respond to the effects of Tropical storm Bret. As the waters receded staff of the Ministry of Social Development and Family Services along with Local Government quickly assessed the situation. They received 3062 claims of which 1419 were deemed to be ineligible and 1643 were approved at a cost of $10.819 (million).
FLOOD VICTIMS TO BE PAID $35 MILLION
* More recently we have had to respond to even more severe and widespread flooding in mid-October. Once again the state has been called upon to bring some relief and further support to those affected. As of 6th November the relevant staff conducted 2615 assessments in the affected areas and payments from an emergency allocation of $35M are currently being paid out.
MORE BORROWING IN 2018
* "In 2014/2015 the net Public Sector Debt was 79,363,826,145.0.
By 2015/2016 this debt rose to …………………..88,304,618,796.0
By 2016/17 this public debt has risen to……… 92,801,106 939 and we still have to borrow again in 2018 to keep the commitments of the priorities I just made to keep the essentials going": Rowley
* "Of the $93b of public debt that I have just referred to $38b is debt incurred by the state enterprise sector and the Statutory bodies like WASA and TTEC."
GOVERNMENT ENTERTAINS NEW ALUMINUM PROJECT
* "After months of discussion an international consortium has completed a feasibility study on their interest in an aspect of the aluminium industry in Trinidad. A presentation on this proposal is scheduled to be made to the Energy Sub Committee of the Cabinet on Wednesday of this week": Rowley
ROWLEY: TRINIDAD & TOBAGO'S 12.5% ROYALTY RATE STILL AMONG LOWEST IN THE WORLD
* "They criticized the Minister of Finance when he imposed the 12.5 per cent royalty on gas at the wellhead. The royalty was already applied on oil and is now being extended to apply to gas": Rowley
* "In the United States, royalties for onshore production ranges from 12.5 per cent to a maximum of 30 per cent. Offshore production ranges from 12.5 to 18 per cent. In Canada, typical royalties range from 10 per cent to 45 per cent. In Ecuador, oil royalties range from 12.5 to 18.5 per cent. So what is so wrong when we apply 12.5 per cent? It is still one of the lowest royalty rates in the world": Rowley
PETROTRIN LOSING MONEY ON EVERY BARREL OF OIL IT REFINES
"It is no secret that all is not well with Petrotrin. Petrotrin’s debt is now a massive $13 billion. The refinery is losing money on every barrel of oil it refines and the company is not doing that which all oil companies must do, that is, drill to find and extract more oil": Rowley
TRINIDAD & TOBAGO LEAVES $7B-$9B IN TAX UNCOLLECTED
* "'When disaggregated we found the Corporate Tax Gap to be between TT$5.1 billion and TT$6.6 billion and the VAT gap between $1.9 billion and TT$ 2.4 billion.' What that is saying ladies and gentlemen is that in Trinidad and Tobagostudies have shown that there is uncollected tax of between $7.0 billion and $9.0 billion. With respect to levels of taxation the report had this to say: "For corporations facing a 25 percent statutory rate the effective rate was found to be in the range 14 percent to 18 percent. For those corporations facing a rate of 30 percent the effective tax range was found to be between 17 percent and 21 percent. For the VAT at 15 percent the estimated effective rate was in the range 8 percent to 11 percent, and for the more recent 12.5 percent the expected effective rate is between 7 percent and 9 percent": Rowley
For the full speech, visit: http://www.opm.gov.tt/wp-content/uplo...Speech.pdf