Pre-Budget Presentation 2011/2012

The Budget Statement for Fiscal 2011/2012 will be presented against the backdrop of the recent downgrade of the US credit rating by Standard and Poor’s from triple A (AAA) to double A positive (AA+) as well as the turbulent industrial relations climate on the domestic front.

These issues will, no doubt, influence the fiscal package to be unveiled by the Minister of Finance as he attempts to strike a balance between the pressing need to curb recurrent expenditure and providing the necessary stimuli to return the economy to a growth trajectory.

The Chamber in its submission for the 2011/2012 Budget outlined a number of recommendations which it deems critical, from a business perspective, in addressing the themes on which the Budget will be couched, namely: economic growth, social cohesion and revenue mobilization.

The Chamber is again recommending a clear articulation of the government’s diversification strategy.  This should be completed after a full review of the seven (7) sectors previously earmarked for diversification in order to ascertain their performance and current relevance.  The Chamber has noted that two (2) additional sectors have been identified for the diversification thrust, namely, the fashion and shipbuilding industries. However, there is also no clear strategy for achieving growth and development in these sectors.  The Chamber is of the view that if we are to attract investment into these sectors, there should be consultation with all the relevant stakeholders, after which a Working Group should be established for each sector supported by action plans and performance measures.

The Chamber also supports the broadening and deepening of our markets for goods and financial services beyond CARICOM and into Latin America, more particularly, Central and South America.  Last year’s budget presentation spoke about the replacement of the International Financial Centre (IFC) with the International Business Centre (IBC). However, we at the Chamber recommend the retention of certain elements of the IFC model as Trinidad and Tobago, by virtue of its location, has a natural advantage in the provision of financial services to this region.

Another burning issue taken from our submission last year is the reduction in the cost of petroleum fuels subsidy. In order to strengthen our previous position, we have made additional recommendations in the area of legislative reform for renewable energy adoption in Trinidad and Tobago.  There is growing awareness regionally and internationally of the importance of renewable energy.  Industrialized countries like Norway and Finland, like Trinidad and Tobago, are hydrocarbon-exporting countries.  Within the Americas, Brazil and Jamaica have also made substantial investments in renewable energy.

It is our hope that private sector and Government would collaborate to introduce renewable energy products which are environmentally friendly; thereby reducing our dependence on subsidised, depleting supplies of fossil fuels.

In Tobago, the THA remains resolute in its commitment to make Tobago the tourism destination of choice.  In order to support this thrust, the Chamber has recommended the provision of a Tourism Loan Guarantee Facility to be accessed by hotels and all other service providers.  This will be supported by a Refurbishment Programme Facility with very soft repayment terms but with proper structures in place to facilitate transparency and accountability.

The Chamber waits with bated breath to see how the Minister of Finance will approach this daunting and unenviable task.