Budget 2020/21 was possibly the most highly anticipated fiscal package in TnT’s modern history, especially in light of the ongoing COVID-19 Pandemic and its associated deleterious effects on the national economy as well as the general pre-budget austerity predictions from political punters and economist alike. Some of which I might add, were fuel by Finance Minister Colm Imbert himself in his pre-budget statements, but I suppose this may have well been calculated to have the current desired effect (relief and general acceptance). I mean if Seigonie tells me expect heavy rain, and it only drizzles then I would surely be happy it didn’t pour, despite the fact that I still got wet.
Whatever the case, the country has certainly exhaled a huge sigh of relief, as Minister Imbert steered mostly clear of severe austerity measures, during his presentation of the Government’s fiscal package on Monday, an action which itself has led to cheers and gongs from some quarters while soliciting the predictable boos and chimes from others.
As a budding economist myself, and thus wanting to give my own perspective on the Minister’s presentation. I would liken it to a sweetened purge, as it provides a healthy dose of sweeteners to mask the bitter pills for which we must now take, with the similarly delayed purgative effects. One such example is the proposed liberalisation of the retail gas sector, through the removal of the fix price/ profit margins and sale of National Petroleum Company’s (NP) service stations to the private sector. Surely, the effects will not be immediate felt at the pumps, given current world oil and gas prices, but you can be assured that its presence will be felt as the world economy recovers.
This is particularly concerning to me given T&T’s current susceptibility to exogenous oil and gas price shocks and the increase overall ripple effect this will now have on the economy as well as the downward price inflexibility with which business in T&T operate. I mean have you ever heard of the price of bread dipping when world wheat prices fall or taxi fares going down when the price of gas does. I won’t insult your intelligence by asking the reverse, or who benefits from same, but rather simply ask that you ponder on it, less you be fooled or at the least be lulled into thinking that true free market conditions (equilibrium pricing) exists in T&T and will benefit your pocket.
In this respect, while I heartily congratulate Minister Imbert, if nothing else, for his skilful presentation of a generally accepted “measured budget,” no doubt achieved through the use of his budget sweeteners and delayed economic effects, I hasten to caution the public that not everything that glitters is gold.