Government’s decreased costs in several areas go towards funding payment of salaries, wages, cost of living and other allowances arising from new industrial agreements for various public sector employees, Finance Minister Larry Howai announced yesterday.
Howai made the point while piloting a motion seeking parliamentary approval for variation of $2.1 billion in the 2015 Budget, via decreasing funds in four ministries and shifting them to 31 other agencies to fund important expenditure up to September 2015.
Howai said in the light of “some of the misleading reports in various media I want to emphasise this is not a supplementation request for more money, but a variation of current expenditure.” He noted that the Prime Minister, after the oil price drop, had requested that no work be started on capital projects which had not been funded and that reductions in recurrent expenditure should take place to realise a savings of approximately $3.5 billion. He said government’s Budget Division in its mid-year review, “after taking into account the considerable savings under some areas of expenditure, as well as the need for additional funding in some areas, has estimated revised total expenditure of $62.9 billion—$1 billion less than in the 2014/2015 Budget.
The majority of the variation of funding was in respect of Personnel Expenditure, he said. Variation of funds was also required for goods and services, current transfers and subsidies and current transfers to statutory boards and similar bodies.
Of the $2.1 billion figure, some $1.4 billion would go towards the payments of salaries, wages, COLA and other allowances for members of the teaching service, officers employed in the civil service and statutory authorities, monthly and daily-rated Port Authority employees, daily-rated Water and Sewerage Authority employees and four regional corporations, as a consequence of new industrial agreements.
Some $787,854,000 million will be spent on the needs of the Judiciary; Ministries of National Security; Housing and Urban Development; Trade, Industry, and Investments; Communications; and the Environment and Water Resources.
In the case of the Judiciary, he said, an additional $27 million was required to complete refurbishment of the Chaguanas ($12 million) and Old San Fernando Magistrates Courts ($15 million).
For National Security, an additional $478 million was required for the acquisition of naval assets: four coastal patrol vessels, two utility vessels and six on-board interceptors.
In the Environment and Water Resources Ministry, an additional $148 million was required to cover the cost of desalinated water supplied by the Desalination Company of Trinidad and Tobago, he added. Another $51 million was required to meet liabilities to be incurred for contract and short-term employment, fees, financial support to sporting and cultural entities and security services.
Howai explained that in the Finance Ministry, savings of $748 million were achieved because funds for capital projects in various ministries/departments were not fully used as a result of contracts not being finalised. He said savings of $100 million also accrued from the Caricom Petroleum Fund, whose current balance was $240 million. There was also a $410 million savings from the Constituency Development Fund idea which had not been operationalised.
Howai said in respect to Caribbean Airlines Limited, funds were provided to meet increased air subsidy and arrears of fuel subsidy, but no decision had been taken on the proposed increase of the air subsidy, whereas the outstanding fuel subsidy was much lower than had been projected, thereby resulting in a savings of $150 million.
Declining oil prices and their ensuing impact on petroleum product prices also resulted in a significant reduction in subsidy claims, which translated into savings of $693.8 million.
Howai said while $120 million was listed in the Budget for the Baby Care Assistance plan, based on an assessment of the demand for the facility, savings of approximately $100 million would be realised.
He said adjustments in the variation of the Budget, together “with the projected shortfall in revenue of $1,345.5 million and the impact of fiscal prudence and adjustments with expenditure will result in a decrease in the projected overall deficit on fiscal operations to $3.948 billion or 2.12 per cent of GDP.