The people must
appreciate, the nation, the state, the citizenry, the economy depends on sound fiscal
policy, the means by which spending adjustments are made to
bring it in-line with expected revenues to influence economic growth, controlled by the
elected executive cabinet under the direction of the Minister of Finance. The
Ministry of Finance (MoF) is primarily in charge of the
national budget and the state of the economy; forecasting revenue and
collections, approving and disbursing funds previously allocated to budgeted
expenditure, negotiating borrowing terms and conditions within the authorized
debt ceilings, retiring debt, and dealing with unforeseen expenditures, all to
bring about a fair distribution of wealth or of sacrifice.
Noting that, fiscal
policy is akin to and heavily dependent on monetary policy, through which the Central Bank
influences the money supply. The Central Bank, in
independent control of monetary policy, primary purpose is the promotion of
monetary, credit and exchange conditions most favorable to the development of
the economy. Whereas, the MoF General Administration, has responsibility for
ensuring that Government’s fiscal policies are implemented by the respective
Divisions and provides the support services required to facilitate the
efficient functioning of all other Divisions. These other Divisions are Budget, Customs and
Excise, Inland Revenue, Treasury, Investments, Central Tenders Board,
Valuation, National Insurance Appeal Board Tribunal, Financial Intelligence
Unit and Office of the Supervisor of Insolvency.
It
is public information that, the MoF pays annual contributions to Regional,
Commonwealth and International bodies and into Special Purpose Funds, other transfers
go towards numerous revolving accounts to support statutory, regulatory and
other operating expenses; Colonial Life Insurance Company (CLICO), Hindu Credit
Union, Betting Levy Board, Infrastructure Development Fund,
Government Assistance for Tuition Expenses Fund, CARICOM Petroleum Fund, etc.
The MOF is also expected to subsidized and pay bills on behalf of commercial
entities; Agricultural Development Bank, Mortgage Finance Company Limited,
Sugar Manufacturing Company Ltd., Caroni (1975) Limited, East Port of Spain
Development Co. Ltd., Caribbean Airlines Limited, Petroleum Co. Ltd.,
International Financial Centre, Allutrint - Operating Expenses, to name a few.
The
MoF directly services debt resulting from the Crystallization of
Guarantees/Letters of Comfort, which the borrowing quasi-government entities
can no longer honor, with Interest Charges and Principal Repayments, and also
pays the Interest on its Overdraft. And estimates needing funds to upgrade
administration systems, renovate public buildings and training drug detection
dogs for the customs and excise division. Public
Officers who have given service to the nation are entitled to Pensions and
Gratuities upon retirement. Such pension, totally or partially contributed and,
if partially, deducted from the officer’s salary would have been invested,
while gratuity is seen as a gift or reward for services rendered. Noting that,
some retirees benefits are passed on to their Dependants.
Charges
on Public Debts, is the direct responsibility of the MoF’s borrowings to fund
past and present estimates of expenditure, as the management of outstanding
debts and debt servicing, have serious implications for the nation’s
international credit rating and further on the abilities to borrow. Hence, to honor the Fiscal Policy budget
will require an estimated at $17Bn., 25.68% of the total annual expenditure up
by 14.86% from the previous year. This comprises $7,437,479,750 or 43.58% for
administration, transfers, subsidies and repayment associated with Guarantees
and Letters of Comfort, another $3,112,500,000
or 18.24% to address Pensions and Gratuities, and $6,517,611,260 or 38.18% to
service the existing debt.
Rationale
T.A.J & Associates Company Limited uses this occasion to comment on topics that have been covered, both academically and by the mainstream media, to add its opinion and point out investment opportunity, not to invoke any social action.
