The Road Map to Recovery Committee has identified some 527 State construction projects—at a total cost of $3.2 billion—to restart once the COVID-19 restrictions are rolled back.
Those figures are contained in the committee’s first report which Guardian Media received Saturday. Guardian Media, however, has not been able to independently verify if this is, in fact, the final first document.
Guardian Media understands that a final version of the first report is expected to be handed over to the Prime Minister. Prime Minister Dr Keith Rowley was contacted to find out when the final report is expected and when he is going to present it to the public, but there was no response.
The committee detailed a multi-pronged approach to jolting the economy and the country after the COVID-19 restrictions are eased with a specific focus on three priorities—addressing and mitigating the hardship inflicted by COVID-19, restarting the economy, and laying the foundation for sustained recovery.
Under the heading “Increasing spending in the construction sector”, the committee recommended the facilitation of the “acceleration of shovel-ready projects which conservatively exceed $600 million.”
The plan is to speed up the time frame for regulatory approvals to reduce wait time for projects to begin.
Under the same construction banner, the committee also identified 72 projects with a $1.8 billion price tag to start in 2021.
Under the heading, “providing appropriate relief to business enterprises particularly MSMEs (Micro, Small and Medium Enterprises)”, the committee recommended that Government accelerate the VAT returns payment.
According to the VAT refund figures contained in the report, the Government identified over 3,800 businesses entitled to less than $250,000 in VAT refunds. Refunding that group carries a projected cost of $260 million. The report did not say how many businesses had refunds that exceeded $250,000 but owed less than $500,000, but pegged that cost at $260 million.
According to the report, businesses that required VAT refunds that were greater than $500,000 were also not established, but the payout cost was estimated at $200 million.
It also called for the suspension of VAT on technology-related products to increase the move to digitisation.
The committee also recommended making US dollars more accessible to the local non-energy sector.
According to the report, the Government moved to mobilise international financial resources to address the critical demands created by COVID-19 and sourced TT$2 billion from five various multilateral agencies
*US$20 million from the World Bank
*US$130 million from the Inter-American Development Bank (IDB)
*US$150 million from the Development Bank of Latin America (CAF)
The Government is also negotiating a further TT$3.4 billion in budgetary support from “other external sources.” It has also raised TT$500 million on the domestic market to pay for the increased goods and services for the Regional Health Authorities (RHAs) and to settle aged trade payables in the Health Sector.
“Cumulatively, the increased Government expenditure to combat COVID-19 has been ring-fenced through a comprehensive social, financial and economic support package of measures,” the report noted.
“The fiscal deficit for FY (Financial Year) 2020, which was originally estimated at $5.3 billion, is now projected to expand to $15.5 billion, $10.2 billion higher than was envisaged in the FY 2020 Budget to ensure the health and personal well-being of our population.”
The revised deficit is predicated on conservative prices of US$25 per barrel for oil for the rest of the year and US$1.80 per MMBTU for natural gas.
“This results in a projected loss of revenue in FY 2020 of $9.2 billion, to which must be added another net $1 billion in extraordinary expenditure,” it said.
Government has also indicated that it will seek to utilise money from the Heritage and Stabilisation Fund, not exceeding TT$10 billion in any given year, for budgetary support in exceptional circumstances, such as the current pandemic.
“Various innovative financing sources have been identified for mobilising additional resources for the next three months with the possibility of further funding in six months to one year if needed,” the report stated.
The Recovery Committee has also examined the agriculture industry and ways to improve the local product.
Under the banner “Expanding Agricultural Activity”, the committee detailed plans to explore new and innovative farming techniques such as aquaculture, in order to achieve increased food production.
Its plans include increasing and improving agro-processing facilities to add value to primary agricultural products.
The plan is also to develop a “labour swaps and skills alignment programme” in the Tobago House of Assembly (THA) aimed directly at the CEPEP and graduates from the relative tertiary institutions to move to the agricultural and agro-processing sectors.
The plan also includes a reduction of the minimum acreage to qualify for the recent incentives by the Department of Food Production and to allow farmers with land title issues to utilise affidavits and Certificates of Comfort to access services and support.
There is also a plan to intensify the “Eat Local Campaign” and review Tobago’s School Feeding Programme towards incorporating more locally produced products in its meal plans.
The Government is also seeking to discourage the importation of luxury goods through increased taxation.
“With an appropriate sunset clause, to discourage the importation of luxury goods across all categories and save on foreign exchange reserves. The Committee recommends that the Ministry of Finance develop a list of the luxury goods to be targeted.”
The committee also recommended the establishment of an Execution Task Force which will be responsible for developing a detailed implementation plan, implementing a monitoring plan, providing oversight and accounting for deliverables and to liaise directly with the Prime Minister to assess progress.