In T&T: Central Bank governor – Govt must cut subsidies

1 December 2011

No more handouts! Governor Williams also says no need to devalue TT dollar.

Concerted efforts need to be made to reduce subsidies funded by the Government if Trinidad and Tobago is to move to a more sustainable fiscal position, Central Bank governor Ewart Williams has said.

Speaking at a luncheon meeting of businesspeople on the state of the economy at the Chamber of Commerce, Westmoorings yesterday, he said the country also needed to prepare for a “gradual reduction in our dependence on energy sector taxes”.

“This strategy will require a combination measures to increase non-energy tax collections and concerted efforts to reduce the share of subsidies and transfers in total government expenditures,” he said. “This kind of fiscal consolidation will allow a return to fiscal balance, while leaving adequate room for productive investment in education, health and infrastructure.”

Williams said this would also allow an increase in the rate of savings in the Heritage and Stabilisation Fund.

Government subsidises a number of goods and services including fuel, tertiary education and travel with a jet fuel subsidy to Caribbean Airlines and support on the airbridge ticket price.

Williams said also there was no need for the State to look at a devaluation of the TT dollar as the Central Bank continues to manage the exchange rate.

Opposition Leader Dr Keith Rowley also attended the luncheon yesterday and commented that since the Opposition’s comment on the national budget in Parliament, Government had not said anything about addressing transfers and subsidies.

He said Government also did not address how it was going to retire debt or address unemployment.


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