T&T’s 2019 BUDGET – THE TURNAROUND PT. 2

A Firstline Securities Limited Blog by: Mike

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Introduction

Following on from our first blog entry yesterday we continue our look at the 2019 National Budget of the Republic of Trinidad and Tobago – Turnaround.

The Medium-Term Outlook

With the help of the International Monetary Fund (IMF) the Government is to focus on both the short-term and medium-term when formulating policies. The setting of medium-term objectives is intended to make expenditure and revenue more predictable and sustainable.

As new energy projects come on stream, and the non-energy sector picks up, the Minister expects that the economy will:

• Grow at 1.9% in 2018 reaching 2.1% by 2021.
• Gas production will increase from 3.37 billion standard cubic feet per day to 4.14 billion standard cubic feet per day in 2021.
• Inflation will remain low and stable at around 1% on average.
• Growth in the non-energy sector will reach 2% by 2021.
• Average revenue as a percentage of GDP and average expenditure as a percentage of GDP is expected to be 28% and 32% respectively, with a budget deficit forecast of 3.1% in the period 2018 to 2021.
• Public sector debt will continue to be between 65% and 70% of GDP in the period 2018 to 2021.
• A current account surplus on the balance of payments is expected to average 7% of GDP in the period 2018 to 2021.

Global Ratings

The Minister expects that improved economic conditions would motivate Moody’s Investor Services to reverse its 2017 assessment of Trinidad and Tobago. This assessment currently rates TT bonds in junk territory.

New Legislation Covering Gambling

The Minister expects draft legislation emerging from the Joint Select Committee to be approved shortly with a new best practice regulatory system covering gambling being established in 2019.

Improving Procurement Practices

A new procurement regime under the office of the Procurement Regulator could be in place in the first quarter of 2019.

Under the provisions of the Public Procurement and Disposal of Property Act 2015, any procurement of goods, works, services, retention or disposal of public assets not done in accordance with the legislation could be deemed void and illegal by the Procurement Regulator.

Tax Administration

With technical assistance from the International Monetary Fund the government continues to address the serious problems of governance, non-compliance, and weak organisational structures inherent in the current Board of Inland Revenue (BIR).

The Trinidad and Tobago Revenue Authority is expected to come on stream in 2019 and will adopt best practice standards and greater efficiency in respect of the collection of taxes.

The Property Tax

The Minister noted that two key pieces of legislation in respect of the property tax received the necessary presidential approval on the 8^th June 2018. The current plan is for the BIR to issue notices to property owners for the payment of property tax in 2019. The Property Tax will only be implemented and collected in respect of calendar year 2019 and will not therefore be applied retrospectively before this date.

Providing Economic Resilience

The Government intends to improve the economic resilience of the country through the provision of modern physical and social infrastructure. This includes improvements to highways, hospitals, police stations, community centres, fire stations and other key elements of infrastructure.

Under this heading the following is notable of attention:

• The San Fernando – Point Fortin highway is expected to be completed in 2020.
• The Valencia to TOCO highway is moving to construction phase and will upgrade the existing route between those two locations.
• After overcoming a legal challenge, the Churchill Roosevelt extension to Sangre Grande is being constructed in phases.
• The continuation of the removal of traffic lights along the Churchill Roosevelt Highway to allow the unimpeded flow of traffic from Port of Spain to UWI.
• A proposed ferry port at Toco is in the design stage. This port is intended to provide an alternative sea route to Tobago from the east of Trinidad.
• The establishment of a dry dock facility at La Brea. On the 7^th September 2018 an agreement was reached between the National Infrastructure Development Corporation (NIDCO) and a Chinese entity for the development over a three-year period of a US$500 million facility that would allow for the construction of a large container and bulk transfer terminal, a large dry-dock facility, and an outfitting terminal for ship building, dry docking and repairing of vessels. This facility is intended to employ 2,700 directly and over 13,000 indirectly.
• A new fishing port in Moruga is in the design stage.
• The improvement of the beach facilities at Maracas Bay have been completed.
• The San Fernando waterfront will be redeveloped at a cost of TT$144 million. The project involves reclamation of land, establishment of a small fishing facility, construction of a mixed-use development inclusive of mid-income housing and the development of an administrative complex at Chancery Lane with 10 floors of office accommodation, 3 floors of commercial space, and 300 parking spaces.
• Skinner Park will be upgraded although no cost or time estimates were given for this project.

Improving hospitals

According to the Minister the administration is in the process of an extensive construction programme to expand, upgrade, and modernise the nations primary and secondary health institutions.

The Point Fortin Hospital is expected to be operational in September 2019 providing 100 beds for in-patients and 16 beds for day care patients. The opening of the hospital will provide between 800 and 1,000 new jobs and is financed by a TT$1 billion loan provided by the Government of Austria.

The Arima Hospital is scheduled for completion in July 2019 and will provide 150 beds at a cost of TT$1.2 billion.

The Port of Spain General Hospital Central Block is being re-developed at a cost of TT$1.7 billion and upon completion will provide 540 beds and clinical services.

The Couva Medical and Multi-Training Facility is in the process of being operationalised and will be jointly owned by the Government of the Republic of Trinidad and Tobago and the University of the West Indies (UWI). The facility is being marketed as Trinidad and Tobago’s first attempt to enter the arena of health tourism and the Board of the controlling company is currently seeking an operator for the facility.

A new hospital is to be constructed at Sangre Grande with construction commencing in 2019. The hospital will be built at a cost of TT$850 million and will provide 100 beds for in-patients and 16 beds for day care patients.

Improving police stations

Three new police stations have been completed and commissioned at Besson Street, St. Joseph, and at Maracas, St. Joseph. Five additional police stations are moving to construction stage at Old Grange and Roxborough in Tobago, and Manzanilla, Matura, and Matelot in Trinidad.

The Carenage and St. Clair police stations are already in construction mode.

Coming tomorrow

Tomorrow we continue our narrative with the third part of our blog series on the 2019 National Budget of the Republic of Trinidad and Tobago.

What are your thoughts on the 2019 National Budget?

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