The current pandemic and curious management of the economy over the past five years unequivocally testify to the bold need to do things differently over the forthcoming five years. Having put “new wine in old bottles” with the intent that things would be done differently and more progressively, begs the question: is doing the same thing repeatedly but expecting different results sensible?
In the previous term, there were repeated calls, both by businesses and economists, for certain initiatives to be pursued to better manage the economy but all seemed to have fallen on deaf ears.
A new term has begun but the same people have been retained to manage the economy going forward. Is it reasonable to expect new and different thinking from incumbents?
Realistically, none would expect a balanced budget, despite utterances to the contrary in this period of the pandemic where economies, both locally and globally, have been struggling to stay afloat. The pandemic has been devastating regarding lives, livelihoods and the economy yet it has provided a ray of sunshine to these same entities.
Focusing on the imperatives of the budget, the government should desist from seeking to balance the budget at this time, if it is in fact its intention, to one of economic management. The several sectors of the society that the government has asked for proposals would most probably seek their own interests but also provide some suggestions for generating revenue.
The government, in light of shrinking revenues, particularly from energy resources, must refocus its efforts on increasing revenues whilst more efficiently, managing its expenditures. True, subsidies and transfers may account for almost one-half of the government’s budget but reducing these arithmetically, is definitely not the answer otherwise the status quo will simply continue.
The government has more than 50 state enterprises. How many of these are profitable? How many are being managed efficiently? Wouldn’t reducing the high number of state enterprises and making the others efficiently-run, result in a decrease in subsidies and transfers?
Why continue to ask Trinbagonians to support, if not condone inefficiency and more and higher taxes?
The pandemic has presented a golden opportunity for the government to reassess its previous modus operandi and created a new normal where businesses will now operate with lesser numbers of staff, new ways of working will become more prominent and technology will be utilised more frequently throughout the workplace.
Increased focus on telecommuting, teleconferencing, video conferencing and online education will positively impact transport and real estate. This reduced need for transportation and office space will impact very positively on real estate by both government and businesses.
For decades now the government has been talking about ease of doing business yet T&T ranks about 105 out of 160 countries. Although being the largest employer, how much real effort has been placed on government’s operations in almost all spheres that require interaction with the public? Holding one’s breath for energy prices to rebound will be the death, not stagnation, of the economy. More than enough time has passed to continue paying lip service to diversification. Undoubtedly, diversification is a key pillar in revenue generation and foreign exchange management.
The government must take the bull by its horns and focus on moving the economy from its current negative to a positive growth position rather than continue to focus on tax and more taxes.
Admittedly, taxation is important but the population, as well as businesses continue to pay taxes, a few being value-added, road, health surcharge, pay as you earn, corporation and environmental yet there is no commensurate benefit to Trinbagonians and businesses. So much talk about collection but what has been done? Will the revenue authority address this when less than 50 per cent, not to mention disarray and misunderstanding, of properties have been registered?
Reducing expenditure on nice-to-have projects, whilst seriously focusing and improving revenues through better tax collection, creating additional revenue streams, greater utilisation of technology, diversification, attention to ease of doing business and examining the value-add of state enterprises will enhance the government’s management of the economy.
Government budgeting requires actively listening to new ideas of revenue-generation and innovation and not on “balancing the budget” now or cutting expenditure arithmetically. Will it seek to preserve egos or do the right thing for T&T? It’s time for a reset.