Thousands of Clico, HCU depositors to receive TT$75,000 each 

PORT-OF-SPAIN, Trinidad--In what can be aptly described as a "people's budget," the People's Partnership Government Wednesday brought relief to hundreds of thousands of distressed depositors of CLICO and the Hindu Credit Union, with a firm plan to give them their money.

Government also sought to pacify disgruntled policemen with a TT$1,000 increase in their take-home pay (via tax-free duty allowance); assuaged the suffering of 28,000 indigent Public Service retirees by giving them a minimum pension of TT$3,000 and offered an amnesty for tax penalties and interest for late filing to all delinquent taxpayers, whether it be corporation tax, land and building taxes, value added tax, income tax, business levy or environmental levy.

Finance Minister Winston Dookeran, in the two-and-a-half-hour-long presentation of his TT$49 billion budget, also announced the expansion of the GATE programme to include vocational training, a milk programme (outside of that already provided in the schools) in which people who cannot afford it would get milk in the health centres and at child welfare clinics and centres for antenatal mothers.

In addition to the pension increases, the aged would have the benefit of an Elderly Mobile Shuttle Service in 2011. First-time homeowners will receive a tax credit of TT$18,000 per household on mortgage interest paid for five years, with effect from the date of acquisition.

To hard-pressed contractors who have been owed some TT$4 billion by the Government, Dookeran showed empathy and gave the assurance that Government had already started putting measures in place to meet these commitments.

True to its word, the Kamla Persad-Bissessar-led Government gave the people what they wanted and "axed the property tax", carrying the country's happy homeowners back to last year's levels of land and building taxes.

"Old rates and old (property) values," Dookeran declared to thunderous table-thumping.

As he announced the "cherry on the top" bonus of a holiday for 2010, the Minister's budget speech reached its climax, to desk-pounding support from his colleagues, as a quiet People's National Movement bench looked on.

In this budget presentation, gone were the mega-projects and the billion-dollar "pie-in the sky" schemes. No smelter or rapid rail. Instead, the 2010/2011 budget, titled "Facing the Issues - Turning the Economy Around", focused on the "people's pains".

"Billions were spent, yet the common man's needs were neglected. Basic needs and issues like safe shelter, water, decent health care, closing the information gap and our children were cast aside as low priorities. These fundamental needs were sacrificed at the altar of grandiose schemes, including tall buildings and fancy international summits, all of questionable worth to the people's well-being," Dookeran said, looking at former Prime Minister Patrick Manning.

The Finance Minister added: "The country's Gross Domestic Product tripled from TT$56 billion in 2002 to TT$171 billion in 2008. Yet in that time the average person was no better off."

The chamber gave a collective gasp and PNM MPs flinched as the Finance Minister revealed that the last government "wasted" TT$565 million on a feasibility study and design plans for a TT$22.5 billion rapid rail.

Dookeran made it clear that Government felt the small depositors in CL Financial and the HCU should not have to pay for the sins allowed by "the regulators and (deficient) financial regulations". In stark contrast to the policy of the PNM, which provided no bailout to HCU, Dookeran expressed the People's Partnership's (the UNC's) long-held position to apply equity in the treatment of the depositors of CL Financial and the HCU.

Thus, he announced that Government would make an initial partial payment of a minimum of TT$75,000 to both groups of depositors. Those whose deposits are over this amount, he said, will collect it over a 20-year period at zero interest. The Government's IOU can also be traded on the secondary market if depositors want "immediate liquidity".

The Minister announced the creation of five economic clusters or poles in the following areas: a. Couva, Charlieville, Carapichaima and Chaguanas; b. the South Western Peninsula; c. East Port of Spain; d. the North-Coast; and e. the North East region of Tobago.

"Mr Speaker, special fiscal incentives, including granting Free Trade Zone Status, and designating these areas to allow access to agriculture, tourism and manufacturing tax incentives, will be given to provide the necessary support to ensure the success of these growth poles," Dookeran said.

There were indeed no new taxes (as Persad-Bissessar had pledged), even as Government expanded its support of the social safety net. For example, its decision to increase the minimum pension for Public Service retirees would cost Government an additional TT$280 million. Dookeran warned, however, that the tax amnesty, which will apply to returns, penalties and interest on outstanding tax for the years of income up to 2009, would end on May 31, 2011, after which the "State will enforce strict measures to ensure compliance".

In keeping with the Government's Clean up and Beautify the Country mission, the Minister announced plans to increase the penalties for littering, moving from TT$1,000 to TT$2,000 and from TT$2,000 to TT$4,000. While Government has maintained its huge gas subsidy in the face of limited revenues, Dookeran announced a programme of incentives to encourage alternative energy use.

In the area of health care, Dookeran announced that the "oft-promised and long awaited" cancer treatment centre - the National Oncology Centre - would be built next year. Also, the Point Fortin hospital would be completed, relieving the burden of people in south-west Trinidad, who now have to travel to the San Fernando hospital. San Fernando itself will have a new wing by 2013, he said.

In encouraging contributions to the Children's Life Fund, Government will provide tax incentives to companies and private individuals who make donations.

The one rub in a budget, which focused heavily on the people's issues, was the retention of the TT$9 minimum wage. The Prime Minister said the Labour Minister would address this issue in his budget contribution.

The 2011 budget calculation is based on a real GDP growth of two per cent, an average inflation rate of seven per cent, an oil price of US$65 per barrel and a gas price of US$2.75 per mmbtu. He said total revenue is fixed at TT$41.3 billion, of which the energy sector is TT$15.2 billion, and the non-energy revenue of TT$26.1 billion. Total expenditure is TT$49 billion. The overall fiscal deficit is TT$7.732.2 billion.

Dookeran concluded on a triumphant note as he itemised what he saw as the achievements of the Government in its first 120 days, eliciting a chorus of "Done!" from his colleagues.

The budget debate continues next Tuesday, when Opposition Leader Dr Keith Rowley will reply. Trinidad Express