Minister Patrick Manning yesterday took close to three
hours to present his 2004/2005 Budget presentation.
The package is $27.9 billion. Following is his speech.
Mr. Speaker, I am pleased to present to this Honourable
House and the Nation, the Appropriation Bill for fiscal
I wish to thank the Ministers, Parliamentary Secretaries
and other members of Government, as well as those organisations
and individual citizens who made proposals for shaping this
Budget. We pay special tribute to all public officers who,
with great dedication, produced the comprehensive documents
that are an essential part of the Budget exercise.
Over the last two years this government has been taking
action to create a better quality of life for all our citizens.
With this Budget, we maintain our unwavering focus on transforming
Trinidad and Tobago into a developed country by the year
2020. Our theme for this year is "ensuring our future
survival". Consistent with this theme, this budget
represents another building block towards the social and
economic development of the country.
Mr. Speaker, experience world-wide has shown that accelerated
and balanced development can only be achieved through deliberate
action and planned intervention in support of market forces.
Let me therefore outline to the national community the three
main pillars of our economic strategy.
Firstly, it is directed towards maximising returns from
the energy sector, through increasing our participation
in the value chain and raising the Governments tax-take
in a manner that is consistent with promoting a high level
of investment in the sector.
The second pillar is to diversify the economy to reduce
dependence on the energy sector and to achieve self-sustaining
growth. Our diversification strategy focuses on six main
the traditional manufacturing sector
a new technologically based industrial sector
the small-business sector.
The third pillar of the Governments economic strategy
is ensuring that the benefits of economic growth and development
are shared by all sections of the population. This implies
that growth must be accompanied by the creation of full-employment
involving permanent jobs and a high quality of health, education
and general welfare.
Mr. Speaker, these objectives are attainable over the next
few years. However, as we set the basis for medium term
prosperity, this years budget will contain specific
measures to improve the welfare of the poor, the aged, the
less fortunate, the retired those at the lowest rung
of the income ladder. We feel strongly that no one should
be left behind.
Additionally, Mr. Speaker, this budget will emphasise steps
to improve transparency and governance in the public sector.
We are committed to being a Government, accountable to the
people and absolutely rigorous in the management of public
funds. In this context, this budget will propose a transparent
and effective mechanism to ensure that the rents from higher
oil prices are not frittered away but are utilised for revenue
stabilisation, for inter-generational transfers and for
strategic high quality investments that will benefit the
people of Trinidad and Tobago.
Mr. Speaker, this budget is set in the full context of the
International Economic Environment.II REVIEW OF THE ECONOMY
IN FISCAL YEAR 2004
The International Economy
Since the last budget presentation, positive developments
have emerged in the international economy. The two largest
economies of the world are showing signs of recovery, and
Emerging Asia is contributing significantly to the global
upturn. Global trade has increased sharply and recent Doha
framework agreements provide new hope for a further expansion
of international trade. Financial Markets are now more buoyant,
and we have witnessed a return of financial flows to emerging
markets and to some developing countries, including Trinidad
and Tobago. The prospects are for a sustained global economic
After two years of recession, economic activity in the Caribbean
had begun to rebound on the strength of the global economic
recovery and an increase in tourism. Unfortunately, the
onslaught wrought by hurricanes has set back this recovery
and created major problems of rehabilitation and reconstruction,
not to mention the tragic loss of lives.
As for the global outlook, there are several risks. The
transition to higher interest rates coupled with persistently
high energy prices, could pose challenges for most countries.
The threat of terrorism continues to impact negatively on
most countries, undermining both investor and consumer confidence;
while the AIDS pandemic continues its ominous spread in
many regions of the world.
What this means, Mr. Speaker, is that we need to continue
to manage our economy with discipline and foresight. We
must, improve our macro-economic framework and implement
the essential structural reforms to ensure the continuing
success of Trinidad and Tobago in a world of uncertainty
Recent Macroeconomic Achievements
Mr. Speaker, the economy of Trinidad and Tobago has continued
to enjoy excellent health, thanks to high international
energy prices and enlightened economic management. Our economic
performance this year, augurs well for a rapid transformation
towards Vision 2020.
Trinidad and Tobago recorded its tenth consecutive year
of economic growth in 2003, and we are well on the way to
another year of strong growth in 2004.
The rebased national accounts series, which uses the year
2000 as the base year instead of 1985 in order to capture
our expanded energy sector, put real GDP growth in 2003
at 13.2 percent, almost double the rate of the previous
year. Economic growth in 2003 was led by the energy sector,
whose expansion largely reflected the burgeoning activity
in the petrochemical sub-sector and the commissioning of
the third LNG plant.
Based on data for the first half of the year, real GDP growth
is projected to be 6.2 percent in 2004. While the energy
sector continues to be the main driver, indicators suggest
faster growth from the manufacturing, distribution and construction
Headline inflation continues to be under control at 3.8
percent in 2003 and 3.3 percent in the 12 months to August,
2004. However, we are concerned about the rapid rise in
food prices, which reached 13.8 percent in 2003, and 10.5
percent in the 12 months to August 2004. This Mr. Speaker
we will address.
Mr. Speaker, the latest data provided by the Central Statistical
Office put the unemployment rate in the second quarter of
2004 at 7.8 percent. This is the lowest rate since the PNM
came to power in 1956. I must note that this is about the
same rate quoted by the IMF, based on the standard ILO definition.
The CSO report estimates that some 22,000 jobs were created
between the first and second quarters of 2004. Of these,
4,600 were in construction; 4,200 in banking, insurance,
real estate and business services; 3,600 in manufacturing
and 3,400 in the energy sector.
Mr. Speaker, Trinidad and Tobago recorded an external trade
surplus of US$ 1.6 billion in 2003. This was due largely
to the sharp rise in gas exports, combined with an upswing
in international oil and natural gas prices. I should note
that Trinidad and Tobago also had a substantial trade surplus
of US$952 million with our CARICOM neighbours.
Reflecting this strong export performance, the countrys
external reserves position strengthened further and now
stands at a healthy US$2.7 billion, the equivalent of 6.2
months of imports.
Preliminary data indicate that central government fiscal
operations resulted in an overall surplus of $437.1 million
or 0.6 percent of GDP in fiscal year 2004, after taking
into account transfers to the Revenue Stabilisation Fund,
in the amount of $1,263.2 million.
Total Revenue and Grants received amounted to $20,448.7
million, or 28.4 percent of GDP, this sum includes Repayment
of Past Lending of $256.1 million.
Petroleum Revenues generated $6,916.0 million, or approximately
one-third of total revenue. Taxes on income, excluding petroleum,
amounted to $10,768.0 million. Taxes on Goods and Services
including VAT provided $4,296.4 million while taxes on International
Trade was $1,208.2 million.
For fiscal year 2004 total expenditure is estimated at $20,011.5
million, with Recurrent Expenditure estimated at $18,295.0
million and Capital Expenditure at $1,716.5 million.
This level of capital expenditure is the highest it has
ever been and does not include additional investment by
state agencies including state enterprises amounting to
This increased expenditure results from the recently implemented
quarterly release of funding to line Ministries and Departments,
the increase in expenditure limits delegated to Permanent
Secretaries under the Central Tenders Board Ordinance, and
the building of capacity in the Public Service to implement
Mr. Speaker, we expect that as we build further project
management capacity in the Public Service, expenditure under
the PSIP will continue to grow.
Mr. Speaker, it should be noted that Central Government
debt, including contingent liabilities, fell from 55.9 percent
to 52.7 percent of GDP. The external debt also declined
from 16.2 percent to 13.8 percent of GDP. During the year,
Mr. Speaker, the Government took advantage of the low interest
rate environment to refinance a sizeable proportion of its
Mr. Speaker, as a significant endorsement of the strength
of our economic performance and our prudent economic management,
in June of this year, Standard and Poors upgraded Trinidad
and Tobagos credit rating on its foreign long-term
debt to Triple B Plus (BBB+). This was the second successive
upgrade for Trinidad and Tobago in just over one year.
I now turn to our programme for the new fiscal year.
III AGENDA 2005 2007
Mr. Speaker, our budget plans for 2005 are firmly grounded
in our long-term economic strategy and take into account
our very favourable economic outlook for the next three
Our economic projections, endorsed by the recent IMF Mission,
indicate that over the next three years Trinidad and Tobago
will enter a period of even more dynamic growth. In 2005,
real GDP growth is projected at 6.7 percent, rising sharply
to about 8-9 percent in 2006, and stabilising around 5 to
6 percent thereafter.
Growth in 2006 will be fuelled by the coming on stream of
ALNG Train IV and several new projects at both Pt. Lisas
and the La Brea Industrial Estates. Non-energy sector growth
is also expected to increase considerably during this period.
Construction activity will continue to be buoyant with our
on-going house construction programme, intensified infrastructural
development and private sector projects.
While buoyant oil and natural gas revenues and government
capital spending are expected to put pressures on domestic
prices, the Governments target will be to contain
the rate of inflation to around 4 percent. We will achieve
this through the continued implementation of disciplined
fiscal and monetary policies, which should facilitate a
continued low interest rate environment, a further steady
reduction in public sector debt as a percent of GDP, and
a continued strong foreign reserve position.
Vision 2020 Sustainable Employment
Mr. Speaker, one of our most important targets over the
medium-term is the attainment of full employment
which means an unemployment rate of no more than 5 percent.
With the growth path we have charted, this is a realisable
goal. We intend to create 34,000 additional jobs in three
years with a focus on five main areas:
High-tech growth industries which will position us in the
global knowledge-based industry;
Light-manufacturing which will further our diversification
efforts and increase our productive capacity;
Agriculture which will provide an increasing proportion
of the countrys food requirements;
Services Sector which will strength our diversification
Construction that will provide homes for our people and
expand our infrastructure network.
IV Main Growth Sectors
Energy & Energy Industries
Mr. Speaker, the energy sector will continue to be the main
engine of growth and development in Trinidad and Tobago,
and as such continued development of this sector is critical
to our attainment of developed country status as outlined
in Vision 2020.
Our plans therefore are to leverage the energy sector to
create conditions for sustainable growth and development.
Mr. Speaker, the main elements of our policy with respect
to the energy sector are:
i. to attract foreign investment in exploration activities
so as to increase our hydrocarbon reserves;
ii. to increase the value added from our natural gas production
capacity. This involves participation at every stage of
the value chain including shipping, re-gasification terminals,
the pipeline system and even the market place; and
iii. to increase the revenue take through the introduction
of a new energy tax regime for oil and gas.Exploration Activities
In the exploration sub-sector, the Government has employed
a sustained policy of attracting foreign investment to explore
and increase our hydrocarbon reserves. Signing is imminent
with respect to four (4) of the ten blocks that were offered
for exploration in the 2003 Competitive Bid Round.
The Government continued to promote its policy of diversification
by encouraging a deepening and broadening of the domestic
gas processing industry. Another dimension of this policy
is its potential impact on the development of small and
medium sized enterprises.
New petrochemical plants, namely, CNC II ammonia and the
Atlas methanol, among the largest in the world, came on
stream while construction of the M5 methanol plant by Methanol
Holdings Trinidad Ltd. progressed and is scheduled for completion
in June 2005.
We are advancing our gas processing activities further along
the chemical chain to downstream ammonia and methanol products.
We are taking steps to construct an ethylene petrochemical
complex with a minimum of four plants, and a gas refinery
complex comprising at least five plants. These investments
offer great potential for spin-off industries and provide
avenues to create and enhance linkages between the energy
and non-energy sector.
Our focus is no longer on first stage processing in the
natural gas industry and instead we are rigorously promoting
second stage processing of petrochemicals. In this regard,
Methanol Holding Trinidad Ltd. has been progressing plans
to establish additional ammonia and urea plants as well
as diversification into the production of melamine. Another
local investor, in partnership with a foreign company, plans
to go into the production of ammonia,urea, nitric acid and
urea ammonia nitrate. It is anticipated that these plants
would be phased over the 3-year period ending 2007.
The NEC and ALCOA signed a Memorandum of Understanding (MOU)
for the construction of a 250,000 tonnes per year aluminium
smelter including an anode plant and associated facilities.
Independent Power Producers (IPPs) have been short-listed
to bid for an up to 750 MW power-plant to supply the smelter
and provide for normal increases in electricity demand.
The smelter is expected to come on stream by 2008 while
the power plant will be in operation one year earlier.
The construction of an aluminium smelter in Trinidad and
Tobago is predicated on the sourcing of alumina from both
Jamaica and Suriname. This project has implications for
the expansion of intra Caribbean business activity as it
is anticipated that it will generate trade in the order
of US$200 million on a yearly basis.
Further, as part of a new downstream aluminium industry,
we have approved a joint venture arrangement between the
National Energy Corporation (NEC) and SURAL, a Venezuelan
company, to create an integrated automotive wheel development
and production centre using their newly developed technology.
Once proven to be commercially viable this joint venture
will compete internationally in the Original Equipment Manufacturing
(OEM) market for high-value added wheel products. This facility
is to be located in the Wallerfield Industrial Park. The
total investment will be US$87.5Mn.
This also recognises that even before the ink dries on the
paper, the aluminium smelter capacity is being expanded
to 322,000 tonnes per year.
Iron and Steel
Mr. Speaker, there is increasing global demand for steel
and the outlook is that this will persist over the long
term. Consequently, plans are apace for an expansion of
the local iron and steel industry. NUCOR was granted approval
to build a 1,500,000 tonnes per year mega DRI plant. Meanwhile,
another international company, International Steel Group
(ISG) is now concluding the purchase of the local Cliffs
and Associates Ltd. plant, which has been closed since 2003.
This plant will produce 350,000 tonnes per year of Hot Briquetted
It is anticipated that these additional iron and steel facilities
would be in operation by the end of 2005. The companies
have also pledged US$100,000 to fund the establishment of
a Steel Development Authority to examine the downstream
potential of the industry. The possibilities include the
establishment of a foundry to manufacture parts for automobiles,
valves for pumps and taps and a pipe mill to produce pipe
for the oil and gas industry. The companies NUCOR, ISG,
ISPAT and the Government have set a target of creating five
thousand jobs in the Iron and Steel sector by 2010. In addition,
Mr. Speaker, the NUCOR plant also raises the very exciting
possibility of a Steel Smelter at the Union Industrial estate
at La Brea.
Liquefied Natural Gas
ALNG commenced construction of its fourth LNG Train at an
estimated cost of US$1.1 Billion, during the second half
of 2003. The construction of this 5.2 Million tonnes per
annum plant is scheduled for completion in first quarter
Parroting will soon embark on a gasoline optimisation programme
consisting of the construction of five plants over the next
four years. Upon completion of this upgrade, Parroting will
be well placed to be the premier supplier of high quality
environmentally friendly gasolines in the region. Gas-to-Liquids
An opportunity has arisen for Petrotrin to establish synergies
with at least one gas-to-liquids facility, which will produce
high quality, clean burning and environmentally friendly
diesel fuel. Diesel fuel produced from the GTL plant will
be blended with Petrotrins refinery diesel stream.
Local Content Development
Mr. Speaker, the government shall ensure that all participants
in the energy sector are selected, engaged and managed in
a manner that supports the objective of maximum local content
The Permanent Local Content Committee established earlier
this year will be responsible for developing specific subsidiary
policies and strategies to ensure the transfer of technology
and know-how to improve local skills, businesses and the
capital market as well as other related matters.
Fabrication Yard and Dock Facilities
The Labidco fabrication yard is a prime example of an initiative
to promote local content. In April, BHP Billitons
700-tonne Kairi-1 Platform was completed at the estate and
loaded out from the adjoining La Brea Dock at the Port of
Brighton. In addition, BPTTs Cannonball Platform is
currently under construction at the fabrication yard.
Concrete coating of pipelines has also found a home at the
site thereby presenting another opportunity for the involvement
of local labour and materials in the deepening of the energy
In tandem with discussions taking place for the establishment
of additional heavy industries, we have been pursuing the
development of the 750-acre site at Union Estate. This estate
is earmarked to accommodate new industries including the
aluminium smelter and associated power plant and downstream
The development of the Union Estate for industries is consistent
with Government policy to create new nodes for social and
economic growth throughout the country. Additional sites
for the location of energy-based industries are also being
identified and in this regard, the NEC has been mandated
to identify suitable locations between Pt Lisas and Icacos
for the siting of plants. Environmental Awareness
The maintenance of the environment remains high on the list
of the Government priorities. In the continuation of this
policy the National Petroleum Marketing Company will embark
upon an upgrade programme for its entire retail network
including the current gas stations, new and abandoned sites.
The programme will involve remediation work on 211 sites
over a period of five years. The National Petroleum Marketing
Company will in conjunction with the site remediation efforts
replace all single wall tanks with double wall fibreglass
tanks. The cost of the remediation and tank replacement
programme is estimated at $414,000,000.
We will also be giving consideration to pursuing an initiative
to distribute natural gas to homes in an attempt to enhance
the quality of the environment for future generations. We
now propose also to pursue with added vigour the use of
natural gas as a motor fuel.
Mr. Speaker, our manufacturing sector is now a leader in
the Caribbean. We intend to build on this, and position
Trinidad and Tobago as a major manufacturing and commercial
centre in Latin America and the Caribbean. We shall therefore
maintain the appropriate domestic macro-economic environment
including a competitive exchange rate, and provide infrastructure
and institutional support for the sector.
Accordingly, the Government has begun implementation of
the Trade Sector Support Programme to support manufacturers
in enhancing their international competitiveness. This will
be followed with a comprehensive business expansion and
industrial restructuring programme formulated in conjunction
with the various private sector organisations.
We are also targeting a number of specific areas for further
commercial expansion including:
Fish and fish processing;
Music and entertainment;
The Film Industry;
Printing and Packaging; and
Food and beverage.
In 2005, additional initiatives will include:
The continuing development of the Industrial Park at Wallerfield;
Development of an Investment Policy and a Services Trade
Policy for Trinidad and Tobago;
A new Foreign Investment Act;
Establishment of a Trinidad and Tobago Trade Facilitation
Company in Cuba to promote trade and investment activities
between the two countries; and
Establishment of a Research and Development Fund to finance
the development of unique products from Trinidad and Tobago
for the global market.
Small and Medium Enterprises
In the Small and Medium Enterprise Sector, EXIMBANK, in
collaboration with BDC, NEDCO and NAMDEVCO will execute
an outreach programme to Small Business by providing information
on market access as well as financing options for exports
to overseas markets. In addition, the guarantee limit under
the Loan Guarantee Programme administered by BDC will be
increased from $250,000 to $500,000.
These initiatives will be supported by a new marketing thrust
to be undertaken by an export marketing company.
Mr. Speaker, we believe the Venture Capital Regime in Trinidad
and Tobago could play a greater role in financing economic
activity and in the diversification of the economy. The
Regime has remained at an embryonic stage, due largely to
the restrictions prescribed in the Venture Capital Act,
1994. To correct this, we brought to the Parliament a number
of amendments to the Act, to improve the effectiveness of
the Venture Capital Regime.
We propose to amend the Act further to strengthen the effectiveness
of the Regime and facilitate the development of the business
sector, particularly those small and emerging businesses
engaged in research and development, and innovative activities.
Mr. Speaker, development of the Tourism sector is a major
pillar in our economic diversification and employment generation
platform. Last year we attracted a record 407,000 visitors
to Trinidad and Tobago and indications are that 2004 could
see a significant increase.
We have been very successful in attracting new airlifts
to Tobago, and the number of visitors has been increasing
steadily. In 2001, the number of visitors to the island
was 49,441. In 2002, this increased to 56,565. By 2003,
the figure increased further to 67,240, and by August 2004
had reached 61,754. It is now projected that by the end
of 2004 the number of visitors to Tobago will exceed 100,000.
Mr. Speaker, this has significant implications for the Tourism
industry in Tobago. There are now not enough hotel rooms
in Tobago to meet the increasing demand, and perhaps of
even greater significance is the shortage of labour in the
Tourism industry on the island.
To address these issues, as well as increase the sectors
overall contribution in the development thrust, we created
a dedicated tourism agency - the Tourism Development Corporation,
which will be charged with the responsibility for tourism
investment promotion, product development and marketing.
In 2005, we plan to accelerate our efforts to market Trinidad
and Tobago internationally. Negotiations are underway with
several major US television networks, which are considering
the destination as the backdrop for programmes that can
highlight the culture and scenic beauty of Trinidad and
Tobago. The print campaign will allow for a more targeted
approach to the markets in which we have a competitive advantage.
Mr. Speaker, to attain the critical mass of international
quality business and resort hotel rooms, we propose to attract
major brands that will bring with them, their own advertising,
marketing networks and destination profile enhancement.
Simultaneously, we will target hotel chains as well as potential
developers and investors with the ultimate objective of
placing Trinidad and Tobago on their investment list and
selling them on specific project concept possibilities.
Mr. Speaker, while most of these strategies and activities
will be driven by the Tourism Development Corporation, they
require the full collaboration of all the stakeholders.
Mr. Speaker, we believe the agricultural sector can make
a significant contribution to the national development effort.
Our goal is to increase the sectors contribution to
economic and social development, and employment creation
while providing an increasing level of the food requirements
of the nation.
In pursuing this objective, we have been upgrading the agriculture
infrastructure. We constructed access roads and bridges,
established water management and flood control systems,
and upgraded a number of fishing centres and markets to
HACCP standards. The Ortoire Fishing Centre has been completed
while construction of fishing centres in San Fernando and
Toco are near completion.
We have made additional lands available for agricultural
production at Oropouche and Plum Mitan by improving water
management systems and agricultural access roads and bridges.
We installed three pumps at Depot Road, Longdenville and
irrigated 160 acres of land, which will facilitate 35 farmers.
We provided increased access to agricultural credit and
protection for domestic agriculture producers from unfair
foreign competition through the CET and import surcharges.
Mr. Speaker, our programme for revitalising the Agriculture
sector is expected to gain momentum in the next fiscal period.
Last year we trained 1,254 individuals between the ages
17 to 25 years under the Youth Apprenticeship Programme
in Agriculture, which is designed to develop practical skills
in the area of farm management, production, marketing, post
harvest management and food processing. An additional 1,500
individuals will be trained this year.
We will strengthen the current agricultural incentives programme
by making it more production-based, and accelerate the distribution
of agricultural State lands and Caroni lands to farmers
and in particular to graduates of the faculty of Agriculture
of the University of the West Indies, Eastern Caribbean
Institute of Agriculture and Forestry (ECIAF) and the YAPA
programme. The Government has implemented through NAMDEVCO
a food packaging and warehousing facility for the effective
preservation of food products. The company will be establishing
a multi-product processing facility that provides opportunities
for product development. Our distribution of State lands
for agriculture will therefore take into account the objective
of establishing modern agro-processing facilities.
We will launch the National Agriculture Information System
for the further modernisation of the sector. Databases already
have been developed on technology, markets, livestock, crops,
disease control, fertiliser use, seeds and other relevant
To increase competitiveness, priority will be given to developing
and enforcing grades and standards; enhancing veterinary
diagnostic laboratory facilities; and expanding and strengthening
sanitary and phytosanitary, and food safety capabilities
to international standards.
We shall promote fish production through the establishment
of the Fisheries Monitoring and Surveillance Unit, and will
put sustainable management techniques in place for renewable
marine and inland fisheries.
Mr. Speaker, the principal objectives of the Caroni reform
programme are to create employment-generating alternatives
for workers in a declining industry and to reverse the economic
waning of many communities which were dependent on the sugar
industry. The objective is to ensure a secure and sustainable
livelihood for former employees of Caroni.
Many former employees of Caroni (1975) Limited are now actively
engaged in the operations of the Sugar Manufacturing Company
Limited and so too are approximately 4,000 private farmers
who cultivate sugarcane for the Company. We intend to establish
a Sugar Industry Authority to implement a quality based
payment system for sugar cane.
In addition, Government is acting to catalyse economic activity
and create growth poles on vacated Caroni lands through
the establishment of light industrial, commercial and agricultural
estates and development of residential sites. The focus
at this time is on provision of agricultural plots and residential
lots to the former employers of Caroni as part of the enhanced
Voluntary Separation of Employment Programme (VSEP). The
agricultural plots would expand agricultural production
in approximately seventeen (17) locations. Work is far advanced
on preparing the residential and agricultural plots for
occupation by eligible former employees. Distribution of
agricultural plots will begin as soon as surveys have been
completed.V. New Areas of Focus
Mr. Speaker, a country cannot progress or secure its future,
without constantly seeking to chart new directions. No matter
how much you are succeeding with present activity, you must
always seek to capitalise on new opportunities. You can
never stand still, sit on you laurels or be complacent.
This Budget reflects that creative drive of this administration,
which I have the honour to lead. There are consequently
new areas of focus.
Mr. Speaker, Trinidad and Tobago has now emerged as the
financial centre of the region. In 2003, bond issues for
regional governments and corporations amounted to over US$500
million while investment in the region by TT financial institutions
amounted to some US$250 million. The financial sector in
Trinidad and Tobago now accounts for 12.5 percent of GDP
and employs 7.5 percent of the labour force.
We are convinced that we have an excellent base to become
the Pan Caribbean Financial Centre. We have the advantages
of our ideal geographical location, good air links and a
well-developed legal code.
The legislative agenda for the financial system in fiscal
2005 will include the amendment of the Financial Institutions
Act and the Insurance Act, as well as the modernisation
of legislation relating to the Credit Unions and private
pension funds. We are also examining a proposal whereby
credit unions with an asset base of $100 million and higher,
as well as those undertaking business of a banking nature
will be brought under the supervision of the Central Bank.
We are moving towards a modern regulatory and supervisory
framework. The White Paper on the Reform of the Financial
System has set the agenda for the upgrading of relevant
legislation and the development of the entire range of financial
infrastructure including the introduction of a Single Integrated
Regulator for all financial institutions.
We shall also address the need for the establishment of
a Development Bank, largely funded by the Credit Union Movement,
to service, inter alia, the requirements of the Small Business
sector. We intend to engage the services of an international
consultant to guide our future course of action.
Wallerfield Industrial Park
Mr. Speaker, two other areas of economic activity identified
for special focus are the Information Technology/Industrial
Sector and the development of the Wallerfield Industrial
The Park will encompass four zones of activity:
A Mixed Business Industrial Zone focusing on Technology
and Software Development and Incubation Facilities;
A Manufacturing Zone concentrating on Light Manufacturing
and Downstream Manufacturing from the Energy Sector;
A Knowledge-Based Zone which will house the University of
Trinidad and Tobago together with a significant on-line
distance learning capabilities; and
A Commercial and Services Zone.
The Incubation Facilities will enable small businesses to
start operations with minimal capital outlay and will offer
the latest technological advances including Broadband Internet
Access and Real Time Video Conferencing Facilities for the
UTT and Industry use.
The Park will house Engineering Technology including Optical
and Microsystems Technology; Material Technology and Software
Development; Light Manufacturing including Plastics, Electronic
Device and Petrochemical Manufacturing; and Services including
Industrial Maintenance, Logistics and Distribution, and
Training and Human Resource Development
The University of Trinidad and Tobago will provide synergies
for industries on the Estate.
Mr. Speaker, this Government believes that a competitive
Telecommunications Sector can add to the diversification
and development of the non-oil sector. We have therefore
established an independent regulator for the sector, the
Telecommunications Authority of Trinidad and Tobago, which
will implement policies to facilitate competition in a fair,
equitable and transparent manner.
In the broadcasting sector, the Authority has a mandate
to award additional concessions for television and multi-channel
(cable) video broadcasting. In addition to more choices
for the consumer, the licensing of additional multi-channel
broadcasters will provide additional opportunities for the
provision of broadband Internet access at affordable prices
to homes nationwide.
Within the first quarter of 2005, the Authority will be
awarding further concessions to provide public mobile communications
services. We expect competition to produce significant rate
reductions, improve our service delivery and wider access
to the service among other benefits.
Competition will also be introduced in the provision of
international telecommunications services. This development,
together with the registration of the international call
centres, will result in a further reduction in rates for
international calls. VI Investment in Human Capital
Mr Speaker, Education and Health are critical to meeting
the developmental goals of this Administration. We have
initiated comprehensive reform agendas in both areas, which
are already beginning to show positive results.
In keeping with our vision 2020 to position Trinidad and
Tobago in the global economy we are in the process of revamping
the entire education system to deliver total quality education.
As part of our efforts to ensure quality education for all
we are expanding from early childhood care and education
to adult literacy.
In the New Year we shall construct 43 Early Childhood Care
and Education Centres as we pursue our objective of universal
access to pre-school education by the year 2010. This will
make us one of the very few countries in the world to have
targeted such an achievement.
In pursuing our agenda for quality education we have signed
on to several international agreements as a means of benchmarking
We established the National Curriculum Council with a mandate
to review and revise, if necessary, the national philosophy
and goals of education. The Council will be responsible
for recommending curriculum policy for all levels of the
The Government has also put in place research, development
and evaluation committees to assess and make recommendations
for the development of a textbook industry in Trinidad and
In order for the education system to provide effective resources
for our thrust in the knowledge-based industries, the government
is pursuing a total infusion of technology into the system,
which would involve the distribution of 3,000 computers
at the primary school level, the establishment of IT Units
in each educational district, and the implementation of
a Wide Area Network connecting all schools. The Schoolnet
project will begin the transformation to deepen the use
of computers and the internet as an integral part of the
teaching/learning process in our schools.
Continuous professional development of the Nations
teachers is a critical component of our total quality education
agenda. To date, a total of 1,000 teachers have benefited
from training aimed at improving the quality of education
in secondary schools.
The Government recognises that education involves a holistic
development of the student and therefore requires effective
support services. The Ministry of Education has recently
acquired 120 new members of staff to support the psychosocial
development of the student.
161,000 students are benefiting from the Textbook Rental
Programme for primary schools, which commenced in January
2004. We propose this year to distribute 400,000 textbooks
on loan to students and to extend this programme to include
large print copies for visually impaired students.
The Government is also providing 95,000 lunches and 30,000
breakfast meals under the School Nutrition Programme. This
programme ensures that our students receive the recommended
daily nutritional requirement.
The Government is pursuing a restructuring and decentralising
of the Ministry of Education to provide for greater efficiency
in management, service delivery and governance. To this
end, we expanded the Local School Boards Pilot project to
include 36 selected Government Secondary Schools for a period
of two years.
Another aspect of our approach to delivering total quality
education is our comprehensive programme for school construction
We intend to double the number of A level places
in the Nations Secondary School System. As part of
our $2 billion dollar school building programme, we shall
provide 16 new Secondary Schools and upgrade 100 others
throughout Trinidad and Tobago. The programme also includes
the construction of 13 replacement primary schools and the
upgrade of 10 schools for special children.
Tertiary Education and Training
Mr. Speaker, the Government has embarked on a revolution
in tertiary education.
We aim for a Tertiary Education sector that is responsive
to the socio-economic needs of the country. In last years
Budget statement we stated our intention to establish the
new University of Trinidad and Tobago. It has to be an extraordinary
feat that in only one year we have already established this
new University and admitted almost 2,000 students at the
The University of Trinidad and Tobago will focus on programmes
in engineering and technology, research, innovation, entrepreneurship
and the humanities. Over the next three years, the UTT will
expand its course offerings to include graduate programmes
in the field of Offshore Technologies, namely: refining,
gas processing and marketing, petroleum management, natural
gas technology and electrical management. Degree programmes
would be extended to manufacturing engineering, computer
technology, earth sciences and maritime technologies.
In the new fiscal year we shall continue the expansion of
the University of Trinidad and Tobago towards our ultimate
objective of a networked multi-campus institution, including
COSTAATT, CARIRI, the Institute of Marine Affairs, Metal
Industries Company, San Fernando Technical Institute and
John Donaldson Technical Institute. We shall also increase
enrolment and offerings at the UTT through a complement
of certificate and diploma programmes and Bachelor of Technology,
Bachelor of Science and Master of Science degree programmes
in engineering and technology disciplines.
Additionally, we have introduced a Transitional Studies
Programme under the direction of UTT to prepare CXC graduates
and persons wishing to re-enter the education system for
entry into the Universitys programmes. The programme
is to be conducted at four locations in Trinidad and one
We have upgraded the campuses of the College of Science,
Technology and Applied Arts and shall further expand COSTAATT
to focus on improvement of facilities, new programme offerings,
establishment of communications networks, student support
programmes, and staff training.
We have established the Accreditation Council of Trinidad
and Tobago to foster and maintain quality in national tertiary
education and have also prepared a National Policy on Distance
One of our key objectives is to improve access to tertiary
education. This is the essence of the Government Assistance
for Tuition Expenses program (GATE), which is available
to all citizens, at both public and private institutions,
and is of special significance to those whose financial
situation does not allow them to immediately finance their
development themselves. The programme is already very effective
and it is no wonder that we have already witnessed an increase
in enrolment in tertiary education in Trinidad and Tobago
from 17,000 in 2003 to 24,000 in 2004; an increase of 40%
in just one year.
In the new fiscal year, we shall increase the number of
approved programmes and approved private institutions, thus
increasing access to the GATE Programme. We have also decided
to increase the scope and quantum of the GATE grant, to
cater for additional categories of expenses that students
We shall also launch the Higher Education Loan Plan (HELP),
which is an amalgam of the Student Revolving Loan and the
University Student Guarantee Loan Fund, to provide low interest
loans to students attending local and approved overseas
Skills Development and Human Improvement
Mr. Speaker, through skills development, we are ensuring
that our citizens can take advantage of the employment opportunities
created by the nations development.
In this regard, another achievement of which we are justifiably
proud is the re-introduction of the National Examinations
Council programmes at the John Donaldson and San Fernando
Technical Institutes. This is being done at no cost to the
students of these institutions and will play a most significant
role in the development of the skills required in an increasingly
industrialised Trinidad and Tobago.
We have also established the Multi-Sector Skills Training
(MUST) Programme in July 2004 to address training for employment
in the construction industry for some 10,000 persons, particularly
those who are at risk, financially or academically
challenged, vulnerable or differently-abled. This will now
be expanded to include the agriculture, tourism and hospitality,
and the process manufacturing sectors.
Additionally, we have included the associate degree programmes
at the Trinidad and Tobago Hospitality and Tourism Institute
and will develop human resource systems and international
training opportunities for students at this institution.
We have now re-directed and enhanced the YTEPP, and merged
the Helping You Prepare for Employment (HYPE) with the National
Skills Development Programme (NSDP) under the Metal Industries
Company; graduated almost 700 retrenched and displaced citizens
through the National Re-training Programme; and graduated
over 5,000 On-the-Job trainees from the National OJT Programme.
We have identified national labour market needs through
appropriate surveys to encourage priority training for employment
and constructed and equipped the Laventille Technology and
Continuing Education Centre, which is already accepting
students and will be formally opened next month.
Mr. Speaker, to crown all this activity, I am pleased to
advise this Honourable House and the national community
of the following. This Government intends to ensure that
by 2008, all nationals of this country will have access
to tertiary education in Trinidad and Tobago, free of charge.
I repeat. All Nationals, Free of Charge.
We also intend to achieve a participation rate in post secondary
and tertiary education of 60 percent by 2015. In other words,
our objective is that within the next 10 years, 60% of our
Secondary School graduates will proceed to attend university
level or post- secondary level institutions. This is five
times the current level of participation in tertiary education
and will place us on par with the countries of Europe, North
America and the Far East.
The revolution in Education and Training must and will continue.
Mr. Speaker, I now turn to another of our priorities
the health of our People. We intend that by 2006 this country
will enjoy a health care system that will set new standards
of quality and accessibility.
In 2005, we shall commission the new wing at the San Fernando
General Hospital, which will include an Intensive Care Unit,
the out- fitting of a Burns Unit and theatres for Same Day
Surgery. The outfitting of the Burns Unit will be in the
coming year. We shall continue work in the Scarborough Regional
Hospital, the National Oncology Centre, and the construction
of a number of District Health Facilities and Enhanced Health
Centres. Upgrade works will begin in 2005 at the Sangre
Grande Hospital and construction of an Enhanced Health Centre
in Sangre Grande will be completed in 2006.
Construction of the new Point Fortin Hospital will also
start in 2005.
In addition to infrastructure development, we will also
implement the Primary Health Care Systems Development, and
the Training and Health Promotion Project.
The Government recognises the need to have adequate numbers
of trained personnel at public health facilities. As part
of this training programme, we will begin in 2005 to offer
scholarships to train radiation oncologists and pathologists
Most importantly, we will ensure a continuous supply of
Registered Nurses by training approximately three hundred
and fifty (350) Basic Nursing students annually and by providing
post Basic Nursing Education for Registered General/and
Mental Health Nurses.
To address the shortage of medical practitioners in the
country we shall:
collaborate with the University of the West Indies to expand
the Medical Faculty at Mount Hope to increase the intake
of doctors and pharmacists;
pursue the provision of training for our medical students
in Jamaica and Grenada;
expand the GATE programme to include the cost of accommodation
and books for all students and extend its applicability
to medical studies undertaken in Jamaica and Grenada;
provide additional medical practitioners, including nurses;
undertake, through COSTAATT, an urgent programme to provide
assistants to doctors and allied professionals
Mr. Speaker, implementation of the National Strategic Plan
for HIV/AIDS has begun. Particular attention is being paid
to controlling the spread of the disease through voluntary
testing and counselling, treatment of people living with
HIV/AIDS, and the provision of anti-retroviral drugs.
Mr. Speaker, the Chronic Disease Assistance Programme that
provides free medication for persons afflicted with any
number of Chronic Diseases, was initiated in October 2003.
This programme has been highly successful and over 50,000
citizens have benefited from this programme to-date. During
2004 the scope of the programme was expanded to include
Arthritis, Asthma and mental depression. In November 2004,
the programme was made universal so that all citizen are
now able to access free medication through this programme.
Mr. Speaker, the expansion in the scope and eligibility
of the CDAP Programme by removing the age restrictions now
means that over 500,000 of our citizens would benefit at
a cost of $50 million.
In order to increase accessibility of renal dialysis services
to the general population, we will be providing before January
1, 2005 two renal dialysis treatment centres, one in the
north and one in the south, each providing treatment for
200 persons. This will be supplemented by a Renal Transplant
Surgery Programme to provide renal surgery at the Eric Williams
Medical Sciences Complex at Mount Hope.
The Charitable Cataract Surgery Programme, in conjunction
with the Ophthalmology Society of Trinidad and Tobago, will
continue to provide surgery for patients on waiting lists
at the San Fernando and Port of Spain General Hospitals.
To date, over 1600 surgeries have been done and we intend
to eliminate completely the waiting list for this procedure.
The Eric Williams Medical Sciences Complex will be expanded
to include facilities for the treatment of cataract, glaucoma
and a dedicated theatre for all types of eye surgery, as
well as a full Cardiac Centre performing increased heart
We are providing open-heart surgery to the indigent and
already 120 persons have benefited. We propose to expand
There exists in this country today an inequitable and pernicious
system whereby residents of the Mt Hope and surrounding
areas receive free medical treatment at the Eric Williams
Medical Sciences Complex, while other citizens have to pay.
We shall put a stop to that. With effect from the First
of January 2005, all medical services including the use
of the medical facilities offered at the Eric Williams Medical
Sciences Complex will be free to all nationals of Trinidad
in Tropical Medicine
As we build the knowledge-based society, we propose to facilitate
the expansion of research in many fields, including the
development of tropical medicine. For this purpose, as part
of the new University of Trinidad and Tobago, a State of
the Art Laboratory facility will be provided for research
into herbal medicine and tropical diseases. Another new
initiative of a creative Government!
Mr. Speaker, a well-developed, modern infrastructure network
is critical to the countrys economic and social development.
To this end we have awarded a contract to the firm Parket,
Parson, BrinkerHoff/Trintoplan to undertake a comprehensive
National Transportation Study to address the sea, air and
land transportation needs of the country over the next 30
years. The study commenced earlier this month and is expected
to last eighteen months.
In the case of land transportation, our policy objective
is to develop a road network to ensure that within Trinidad
no place will be more than 2 _ hours away. Priority would
be given to the development of a light Rail Mass Transit
System from Arima to Diego Martin and from Port-of-Spain
to San Fernando. A full feasibility of this proposal will
be completed by July 2005 at which time an investment decision
will be taken. If feasible, we expect to have a system in
place by the year 2012, with some segments operational by
In addition, we propose to introduce a Roads Concessionaire
System where developers would design, finance, build, maintain
and operate specific highways. The road network will also
be expanded to include the extension of the Solomon Hochoy
Highway to Point Fortin, which will be given highest priority
to facilitate development of the deep south and, in particular,
the industrial development of La Brea and Point Fortin.
This highway will also include a spur that parallels the
SS Erin Road to cover areas from Debe to Erin. Other major
projects include a highway from San Fernando to Mayaro,
via Princes Town and Rio Claro, a highway from Port-of-Spain
to the Chaguaramas Peninsula and an Eco Roadway on the North
Coast from Mata lot to Blanchisseuse.
The extension of the Churchill Roosevelt Highway to Manzanilla
via Sangre Grande will support the growth and development
of the light manufacturing industries at Wallerfield as
well as encourage the opening up of new lands for development
in the East. Design engineering contracts have already been
awarded for these projects.
Construction of the interchange at the intersection of the
Churchill Roosevelt Highway and Uriah Butler Highway, as
well as ancillary works before and after the intersection
will be accelerated this fiscal year. The engineering consulting
firm of EDM Cansult has already been engaged to work on
In the case of sea and air transport, the National Transportation
Study would determine the best mix of transport between
Tobago and Trinidad, and between Port-of-Spain and Point
Fortin. In the case of the latter, it also involves sea
Our National Drainage Programmes primary objective
is the provision of adequate drainage and irrigation infrastructure
to alleviate the perennial incidence of flooding throughout
the country. Flood mitigation works are on-going to key
rivers including the Marabella, Cipero and Vistabella Rivers
in the South; Richplain Ravine, North Oropouche and Watercourses
in Maraval/Diego Martin areas in the North; and the Caroni
River in Central.
These works will be supplemented by the construction of
the Mamoral Dam and Reservoir over the period 2005-2007.
This project is the key component of the Caparo River Basin
Flood Mitigation and Water Resources Development Project.
This project should alleviate flooding in the Brasso Caparo
and Mamoral Areas.
The Government Shipping Service (GSS) facilities at the
Ports of Port-of-Spain and Scarborough are to be upgraded
at a preliminary estimated cost of $20 million. The upgrade
will include the construction of a new terminal building
at Port-of-Spain, upgrade of the terminal building at Scarborough,
and construction of berthing facilities at Port-of-Spain
and Scarborough. Work on the upgrade is expected to commence
in January 2005.
Mr. Speaker, we continue the battle to curb the unprecedented
level of criminal activity plaguing the country today. We
would have been in a better position to wage this war had
we the support of the Other Side in our attempts to institute
more effective systems of management and accountability
in the Police Service through the package of legislation
that we introduced to the Parliament earlier this year.
Unfortunately, narrow political preoccupations were placed
before the welfare of the national family.
This notwithstanding, we continue with the battle on several
fronts including increasing the capability and effectiveness
of the police and the introduction of legislative measures.
This Governments policy is to ensure the safety and
security of all residents and citizens of Trinidad and Tobago.
To achieve this objective the Ministry of National Security
and its various Divisions and Agencies have embarked on
a wide-ranging series of initiatives.
The Special Anti-Crime Unit of Trinidad and Tobago, under
Brigadier Joseph, is now fully operational and is performing
an increasingly important role in the countrys fight
Further, the Government introduced new and stricter legislation
to deal with illegal firearms and kidnapping and, Mr. Speaker,
had we obtained the support of the opposition, the Anti-Kidnapping
Act would have been even stronger.
The Firearms Amendment Act has now been passed and measures
are now being implemented, using modern technology and co-ordination
among the various intelligence units to get illegal guns
off the streets.
As part of the Governments expanded fight against
the importation of illegal guns and illicit drugs, a new
radar system, which will give us 360-degree coverage of
our entire coastline on a 24-hour basis has been acquired.
This system is expected to be fully operational by the end
of the year.
We have also improved the effectiveness of our port security
by satisfying the provisions relating to Port Facility Security
and Ship/Port Interface as set out in the Chapter XI-2 of
the International Convention for the Safety of Life at Sea
and International Ship and Port Facility Security (ISPS)
This, Mr. Speaker, was a major accomplishment.
The implementation of cutting-edge technology combined with
improved intelligence is being accelerated and allocations
to the Ministry of National Security have been increased
with special funding being provided to treat with certain
crime hot spots.
We are currently upgrading the IT infrastructure of the
Police Service and the Automated Fingerprint Identification
System project is being expanded.
The mug-shot system has been installed at all divisional
headquarters and equipment has been procured to expand the
Communication Network and extend its point to multipoint
systems to additional users within the security sector.
The Global Maritime Distress and Safety System has been
installed and the final batch of officers trained.
In terms of equipment, the Service was provided with, among
other things: 16 Computer Systems, 2,050 Bullet Proof Vests,
630 Police Safety Vests, and 100 new vehicles to be deployed
to Police Stations in specific crime prone areas.
A total of 1,112 Police Officers have received training
in Forensic Investigations, Criminal Justice, Behavioural
Science, Information Technology, Human Resource Management,
and other areas intended to improve management standards
in the service.
We have included a component on community policing in the
training programme for recruits, as well as in the developmental
programme for supervisors.
We increased the strength of the Service with the intake
of 744 new officers and the creation of 118 new posts on
the staff establishment.
Refurbishment works have been completed on the Couva Police
Station and construction of the Chaguanas Police Station
(Phase II) has begun. Designs for the construction of Police
Stations at Gasparillo, Belmont, Mayaro, Tunapuna, Carenage
and Toco will be completed in the coming year. Work has
started on the designs for stations at Oropouche, Brasso,
Maracas Bay, Maracas St. Joseph, Maloney and Roxborough.
In 2005 there will be:
12 new police stations and continued refurbishment to existing
the expansion and modernisation of the vehicular fleet;
the application of a greater measure of technology in the
conduct of police work;
the provision of computers to all police stations; and
The introduction of an integrated IT platform and communications
Concurrently, the Service is undergoing a detailed transformation
programme. To this end we will establish a Police Training
Academy for the continuous training and retraining of police
The Trinidad and Tobago Defence Force is also being made
more effective to confront the security challenges facing
the nation by being provided with the right mix of skills,
competencies and manpower. TTDF has adopted a strategy of
simultaneous engagements on several fronts and will be given
additional assets, including:
3 Offshore Patrol Vessels (OPV) and 3 Fast Inceptor Vessels;
Armed Helicopters for surveillance and drug interdiction;
Armoured personnel carriers for force protection;
Communications systems; and
Prison reform is also an integral aspect of our crime prevention
programme. We are currently transforming the prison service
to a rehabilitative and restorative mode. To ease the over
crowding at the nations prisons the facilities at
the Maximum Security Prison are being refurbished and upgraded
to house 2,400 inmates.
Mr. Speaker, the Forensic Division in law enforcement is
critical and has received the Integrated Ballistic Identification
System (IBIS) and has also refurbished its DNA equipment.
This will allow for improved forensic science analysis and
more effective case management. In the coming year, the
Forensic Division will expand its facilities and capabilities.
Given the global reality of terrorism and trans-national
criminal activities perpetrated by individuals using fraudulent
passports, the Government intends to introduce modern machine-readable
passports and the supporting infrastructure. These passports
will contain electronic photos and biometric data (fingerprints
or iris prints), which are difficult to substitute and which
will readily identify travellers.
The supporting infrastructure will provide travel information
to law enforcement agencies both at home and abroad.
This is yet another key component in our fight against crime
and criminal activities.
Mechanisms have been put in place to ensure the integration
and collaboration of the nations law enforcement agencies.
This will be effected primarily through the real-time sharing
and dissemination of intelligence information.
The Government will enhance the capabilities of the Fire
Services to ensure that they can respond more effectively
to emergencies, which are peculiar to an energy-based economy.
Mr Speaker, you would recall in last years budget
Statement, I expressed concerns for the misguided young
people of our nation. In this regard, we have strengthened
the Civilian Conservation Corps and have established three
new programmes for youth development. They are:
1. Military Led Academic Training Programme (MILAT), which
is designed to allow young adults, 16 to 20, to pursue academic
disciplines as well as socially transform their behaviour
in a highly structured and regulated environment.
2. Military Led Youth Programme of Apprenticeships and re-orientation
Training (MYPART) which is designed to expose, train, develop
and certify young people between the ages of 14 and 22 years
in Technical/Vocational disciplines in a highly structured
and regulated academic or skilled based training environment.
3. National Youth Service which is intended to engender
in young adults between the ages of 18 and 25 years, the
values and benefits to their communities and the nation
through selfless service.
Additionally, the Ministry of National Security has teamed
up with the Ministry of Education and developed a joint
action plan for school discipline. This will cater for the
expansion of the Cadet Corp, Scouts, Girl Guides and Brownies,
Boys Brigade and other similar organisations within the
Mr. Speaker, in the aftermath of Hurricane Ivans ravaging
of Grenada, I must commend the members of Trinidad and Tobago
Defence Force who continue to perform most admirably in
Grenada. They have displayed true grit and professionalism.
However, the Grenada experience has taught us the very important
lesson of the need for preparedness and the need for an
organisation responsible for spearheading the response to
such a national emergency. In that regard Mr. Speaker, it
is the intention of this Government to move from the National
Emergency Management Agency to a new Office of Disaster
Preparedness and Management. This Office will be responsible
for all disaster response natural or otherwise and will
also co-ordinate the efforts of the private sector in this
regard.VIII Social Agenda
Mr. Speaker, this Government is committed to the social
progress of the population by fostering an environment that
promotes the continuous improvement of the individual.Housing
One of the main goals of our social development programme
must therefore be access to adequate shelter. Accordingly,
the Government has sought to widen the range of alternatives
for housing and living environment available to the different
segments of the population, especially the lower middle
and lower income groups.
Our approach to meeting the nations housing requirements
is to actively facilitate the construction of housing units
as opposed to the settlement-approach pursued by the previous
Administration. Our national housing programme anticipates
the construction of approximately 100,000 homes over a ten-year
period, with an average of 10,000 homes per year. In 2004
we completed a large number of homes for distribution to
a wide cross-section beneficiaries. Mr. Speaker, the Government
is cognisant of the potential impact of such an ambitious
home construction programme, together with its other infrastructural
works and private sector infrastructure development, can
have on the absorptive capacity on the domestic economy.
Accelerated Housing Programme
Construction of 3,249 housing units have been completed
at Rio Claro, Mayaro, Sangre Grande, Barataria, Diego Martin,
DAbadie, Arima, Malabar and Pleasantville and are
currently being handed over to beneficiaries. Construction
of additional units are continuing at Pleasantville, Rio
Claro, Palo Seco, Plaisance, Malabar, DAbadie, Kelly
Village, Barataria, Debe, Tarouba North, Carlsen Field,
Sangre Grande, and Mount Hope.
Additional housing units will soon be constructed at St
Augustine, Corinth, Morvant, Arima, Castara, Roxborough
Construction of 1,000 housing units has been completed under
the Infill Lots Programme and a further 1,000 targeted for
completion this year, the final year of this particular
The Joint Venture Programme is an arrangement between the
National Housing Authority and private Contractors/Developers
to construct low-cost and middle-income houses to be sold
to pre-qualified beneficiaries at pre-determined prices
agreed to by the Cabinet. The contractors/developers would
design, finance and construct the houses. An additional
6,336 units at 14 sites are targeted for completion during
this fiscal year.
Urban Renewal and Development
Mr. Speaker, the Urban Renewal and Development Programme,
which commenced in July 2003, is designed to improve the
quality of life in low and middle-income residential areas
in our older neighbourhoods and communities. The programme
addresses redevelopment problems in targeted urban areas
by providing improved services and infrastructure, including
commercial redevelopment and social and recreational facilities.
Construction has already begun on ten (10) three-storey
apartment blocks comprising 120 apartments at Beverly Hills,
Laventille, and twenty (20) residential three-storey buildings
comprising 120 three-bedroom units at Roy Joseph Street,
San Fernando. The time frame for completion is 18 months.
The anticipated improvements of these programmes will of
necessity directly assault a significant facet of many of
the social ills associated with existing urban decay. To
this end, the revitalisation of our capital city, Port-of-Spain,
as well as San Fernando and Chaguanas, are targeted for
major improvements under the urban renewal programme of
the Ministry of Housing.
Sites and Services Programme
Under the Sites and Services Programme, the Sugar Industry
Labour Welfare Committee is about to award contracts for
the completion of infrastructure works on 107 lots, as well
as contracts for the design layout and infrastructure works
for four (4) sites comprising 811 lots.
In addition, SILWC expects to complete an additional 50
housing units by the end of fiscal 2005.
Regularization and Containment of Squatting
The Governments squatter regularization programme
is being undertaken by the Land Settlement Agency (LSA),
the mandate of which, under law, is the regularization of
squatters, including physical upgrades and security, and
The LSA has completed physical infrastructure works on four
sites at Harmony Hall, Gasparillo; Southern Gardens, Pt.
Fortin; La Paille, Caroni; and Rice Mill Road, Arouca. Infrastructure
works are approximately 75 percent complete at KP Lands,
Valencia. Twelve other sites are under various stages of
regularization ranging from invitation to tender, planning
designs and engineering designs.
A total of 5,400 families are expected to benefit from infrastructural
upgrade of squatter sites and regularization of tenure.
As at the end of September, 850 lots would have been regularized.
The LSA expects to regularize 2,150 lots in 2004/2005, and
a further 2,400 lots in 2005/2006.Housing Finance
Mr Speaker, a critical factor in our housing strategy is
the availability of financial resources to support our various
housing programmes. We have entered into an agreement with
a Consortium of local Banks (FINCOR, RBTT, Scotia and FCB)
to secure financing for the construction and purchase of
housing units under the joint venture arrangement between
the NHA and private sector Contractors. As part of this
historic Agreement, the Consortium has pledged an initial
$1.2 billion towards the construction phase; takeout mortgage
financing in the amount of a further $700 million; and the
provision of mortgages for houses in the $150,000 range
and lower under the IDB subsidized loan programme.
In addition, the Government has renewed the Approved Mortgage
Companies Programme and a number of financial institutions
have pledged their commitment to provide mortgage loans
at preferential rates between 6 and 8 percent to persons
purchasing houses under the Governments housing programmes.
Mr. Speaker, under the Second Stage of Phase 1 of the IDB
Assisted National Settlements Programme, approximately 3,000
beneficiaries will receive subsidies for new housing, while
1,400 beneficiaries will receive matching grants up to a
maximum of $15,000 for improvements to existing houses.
This programme is targeted to commence in this fiscal year.
The beneficiaries of the family subsidies will be persons
in the $2,000 - $4,000 income range who will not otherwise
qualify for conventional mortgages. Similarly, the matching
grants are for persons in the $2000 - $4000 income range
who own their homes but are unable to repair them due to
their lack of financial resources.
Rent to Own Programme
Mr Speaker, the Governments Rent-to-Own Programme
is now re-scheduled for implementation in this fiscal year.
The program will target low and middle-income beneficiaries.
These individuals will be considered for rental accommodation
based on their income level.
The beneficiary will be allowed occupancy of a unit under
agreement of a License to Occupy for a period of five (5)
years with the option to purchase. At the end of the five
years, two-thirds of the rental payment will be applied
as a deposit towards the purchase of the Unit, and the rental
tenancy will be converted to mortgage status.
Where Units are maintained by the NHA during the period
of the Agreement, one-third of the rent paid will be retained
by the NHA to offset maintenance expenditures. All other
charges relevant to the property will be borne by the beneficiary.
House Improvement Grant
In an effort to improve the quality of the existing housing
stock, the Government has implemented a programme to facilitate
repairs to dilapidated homes by homeowners who are unable
to finance repairs due to their modest means. A maximum
grant of $10,000 is made available in two tranches of $5,000
each to successful applicants who are selected via a random
selection process. To date 980 grants have been issued.Social
Mr. Speaker, last year we spent $2,649.9 million, approximately
13.2 percent of the national budget on our social programmes.
Our social programmes are grouped into three (3) major categories:
developmental programmes which empower clients; remedial
programmes which alleviate existing problems; and preventive
programmes, which prevent problems from arising.
Several programmes were expanded and strengthened in 2004,
with the goal of facilitating greater programme reach and
impact while concurrently seeking to improve service delivery
and programme monitoring. Skills training remained a priority
of many of the programmes as we sought to empower the less
fortunate to become self-sufficient.
We identified twenty six (26) new programmes for implementation
in order to widen the social safety net. These initiatives
sought to address a multitude of social issues, including
skills training, unemployment, poverty eradication, and
health and nutrition, affecting various groups in society.
We are currently reviewing the Policy on Persons with Disabilities
with the aim of ensuring conformity with international human
rights standards. We are also undertaking a review of the
Homes for Older Persons Act of 2000, which provides for
the licensing, regulation and control of Homes for senior
citizens throughout Trinidad and Tobago, and the establishment
of an Older Persons Care Board which guides and assists
in the implementation of the Act, and advises on matters
relating to the care of older persons. The government is
currently addressing the very important issue of the decentralization
of social services delivery to communities. The new system,
which has turned out to be very difficult to design, will
focus on the diagnosis of the needs of individuals, households
and communities, the delivery of services within communities,
the institution of appropriate supervisory mechanisms and
a strategy for effective collaboration. Regional offices
will be established in the fourteen (14) regions of Trinidad
and in Tobago and each region will be sub-divided into community
grids based on socio-economic factors.
It is envisaged that the introduction of the new system
will facilitate greater contact and closer interaction between
social workers and citizens to enable more effective identification
and treatment of the needs of clients.
The Government has drafted a National Policy on Ageing in
recognition of the growing size and specific needs of this
sub-population. Emphasis will be on the promotion of self-sufficiency,
independence, participation, recreation and active and healthy
ageing. Implementation of the policy will also involve a
comprehensive upgrade of the delivery of social services
to older persons.
Recognising that the institution of the family is facing
serious challenges, the Government will address the task
of the rehabilitation and reconstruction of this important
institution as a feature of the culture. We propose to address
such areas as, marriage and family counselling, domestic
violence, parenting skills and family relationships.
The Government is determined to ensure that with the significant
investments in human and social capital development, that
programmes are effective and efficient and are relevant
to the needs of the people. Consequently, a draft policy
on Monitoring and Evaluation for the social sector has been
developed and will be implemented in the new fiscal year.
Of the many social programmes and services, which are available
to citizens of Trinidad and Tobago, the Government has recognized
that due to a lack of awareness, some deserving citizens
may not be accessing the programmes. The Manual on Social
Programmes and Services, which is now available, is designed
to provide information on the range of social sector programmes
and projects being undertaken and the social services made
available to the general public by the Government. It is
expected that the manual would contribute to the empowerment
of citizens as they utilize it in their efforts to access
Mr. Speaker, in the new fiscal year, we will strengthen
our service delivery. We intend to expand to a national
level those development-type programmes, which are currently
conducted in specific geographic areas. Seventeen (17) critical
social sector training programmes which focus on training
and equipping persons with marketable skills have been identified
for review, rationalization, and where necessary, strengthening
and expansion to a national level. These programmes include:
The On-the-Job Training (OJT) Programme
The Retraining Programme
The Multi-Sector Skills Training (MuST) Programme
The Helping You Prepare for Employment (HYPE) Programme
The Military Led Academic Training (MILAT) Programme
The Military Led Youth Programme of Apprenticeship Re-orientation
training (MY PART) Programme
The Civilian Conservation Corps (CCC)
The Youth Training and Employment Partnership Programme
The Geriatric Adolescent Partnership Programme (GAPP)
The Non-Traditional Skills Training for Women
The Export Centres Programme
The Transformation and Development Centres (TDC)
The Youth Apprenticeship Programme in Agriculture (YAPA)
The Community Education Programme
Women in Harmony
The Adult Education Programme
The Patient Assistance (PAC) Programme
Emphasis will be placed on such issues as geographic coverage
and location of training centres, trainee/trainer ratio,
management structures, accreditation/certification status,
post-training job placement opportunities and monitoring
and evaluation mechanisms.
Establishment of the Childrens Authority and the survey
of needs of Childrens Homes, which commenced in fiscal
2004, will be finalized in the new year.
Mr. Speaker, given the tremendous cost of family dysfunction
to the State, the National Family Services Division of the
Office of the Prime Minister will initiate a co-ordinated
strategy aimed at addressing the various issues associated
with family dysfunctions. This strategy will utilise the
media in information dissemination and the services of NGOs,
communities, the education system, religious bodies and
other relevant stakeholders.Poverty Alleviation
Mr. Speaker, we place special emphasis on eradicating poverty
and inequality of opportunities; increasing investments
in human and social capital; and promoting social inclusion
and cohesion as part of our social objective.
We recognize that some citizens will be in perpetual need
of assistance. However, we must identify those who can be
rehabilitated and facilitate the socio-economic transformation
of such individuals.
This will require life skills development, literacy, training
and skills upgrade, and access to credit and other opportunities
for the generation of sustainable incomes. This shift in
emphasis will be pursued through an integrated service delivery
approach among Ministries and Departments of Government,
the SHARE Secretariat, and the newly approved Development
This added focus in our approach to poverty eradication
will be strengthened by our existing empowerment initiatives
including the SHARE Secretariats programmes of development,
implemented through NGOs participating in the hamper
programme, the Micro Enterprise and Training and Development
Grant Programme, the Micro Enterprise Loan Facility, and
the Multi-Purpose Community Based Telecentre Project. Additionally,
the Regional Councils on Social and Human Development will
implement a micro project grant programme through which
support will be provided to civil society organisations
undertaking development initiatives within municipal regions.
As I indicated earlier, Mr. Speaker, the Government is concerned
about the rapid increase in food prices, and in particular
its impact on the poor and more vulnerable groups. We have
taken the decision to mitigate the impact of rising food
prices on the needy and vulnerable groups.
Mr. Speaker, the case of Retired Public Officers also needs
to be addressed. As at the end of July 2004 there were 27,565
retired public officers. Of these:
- 2,007 are in receipt of a public service pension of $1,000
per month or less;
- 11,271 receive a public service pension between $1,001
and $2,000 per month;
- 10,379 receive a pension between $2,001 and $3,000 per
Put another way, 23,657 or eighty-five percent of retired
officers are in receipt of a public service pension of $3,000
or less per month. Public officers pensions were last
increased in October 2000.
I shall return to the matter of the impact of price increases
on the more vulnerable groups in society.
IX Reform Agenda
Mr. Speaker, modernization of the Pension Industry in Trinidad
and Tobago is another major component of the exercise to
reform the Financial Sector. The Pension Reform Working
Group, established in 2003, is committed to gearing this
reform initiative to completion and is working closely with
the Implementation Team on the Financial Sector Reform.
The magnitude of the Pension reform exercise requires segmentation
into different phases and components with responsibilities
In phase one, the Central Bank will deal with the Legal
and Regulatory Framework, focusing on such issues as the:
- Development of a new Pension Act governing the pension
- Establishment of the supervisory and regulatory agency;
- Portability and transferability;
- Prudential criteria for the management of Pension Funds;
- Fit and proper criteria for Fund Managers and Trustees;
- Entry and exit criteria;
- Corporate Governance;
- Introduction of International Financial Reporting Standards
- Reporting requirements and information disclosure.
A Team comprising members of the Pension Reform Working
Group, the National Insurance Board and the Office of the
Prime Minister will oversee the administrative integration
of the Old Age Pension and the National Insurance Scheme.
The Pension Reform Working Group, while maintaining overall
responsibility for the Reform of the Pension Industry, will
be responsible for the development and introduction of a
contributory, occupational pension plan for the Public Service,
including Public Officers, Teachers, Police Officers, Prison
Officers, Fire Service Officers, the Judicial and Legal
Service, Statutory Authorities and Municipal Corporations,
members of the Defence Force, members of the Higher Judiciary,
members of the Industrial Court, members of the Diplomatic
Service of Trinidad and Tobago, Parliamentarians, and hourly,
daily and weekly rated employees.
In addition, the Working Group will be addressing such issues
Taxation issues in the pension industry;
Treatment of pension fund surpluses;
Minimum levels of income maintenance in retirement;
Minimum income replacement ratios;
Indexation of pension benefits;
Changes to the retirement age in the Public Service; and
Spousal, parental and children benefits.
Mr. Speaker, implementation of Phase 1 is expected to be
completed by December 2005.
Phase 2, which deals with the review and modernization of
the National Insurance Scheme, will take place upon completion
of the Seventh Actuarial Review of the NIS, and its findings
and recommendations thereon.
But perhaps, of greater concern, Mr. Speaker, is the urgent
need for individuals to ensure they are in receipt of an
appropriate level of income in retirement thereby reducing
the risk of poverty in their retirement years.
The responsibility on the State to provide for ones
welfare in retirement must be reduced and eventually removed.
It is imperative that there be a shift in the culture to
one of individual responsibility. Such a fundamental shift
in responsibility will require an aggressive programme of
information dissemination to educate the public at large
on the benefits of individuals taking increasing responsibility
for their own welfare during their retirement years. During
the course of the coming year, the Government proposes to
commence discussions with the relevant private sector groups
to develop an appropriate programme and information content
for dissemination to the public.
of the Non-Energy Tax Regime
Mr. Speaker, in the 2004 Budget Statement I indicated that
there are considerable leakages in the Tax System due to
weaknesses in the Tax Administration, and the absence of
simplicity in the Tax Regime. We recognized the need for
a comprehensive overhaul of the Tax Regime.
The process of simplifying and modernizing the tax system
has begun. A Non-Energy Tax Reform Committee has been established
in the Ministry of Finance and is currently developing a
plan of action aimed at modernizing and improving the efficiency
of the tax regime. The Committee has already requested the
assistance of the Caribbean Regional Technical Assistance
Centre (CARTAC) in this exercise.
Mr Speaker, I expect that the Committee will be meeting
with the various stakeholder groups during the course of
its work, and will be submitting its Report to the Minister
of Finance not later than June 2005.
Public Sector Reform
Mr. Speaker, an efficient and effective public sector is
an important element of good governance. To achieve these
objectives we will intensify implementation of the Public
Sector Reform Initiation Programme launched in March this
year. The goal of this programme is to make the Public Service
a client-centric, high performance organisation capable
of meeting the developmental challenges of the day.
A key objective of the transformation process is the establishment
of Electronic Government in Trinidad and Tobago. This is
being done through Fastforward our National ICT Plan. The
Public Service information backbone is now being put in
place to create interconnectivity among all Government Ministries
and Departments for more efficient information flow and
decision-making. This is the first step to eventually placing
all appropriate government information and services online.
Local Government Reform
Mr. Speaker, as an essential part of our ongoing efforts
to reform the countrys institutional structures, we
have now developed a Local Government Reform and Decentralisation
programme. The objectives underlying the programme are the
achievement of greater operational efficiency and effectiveness,
the decentralisation of more responsibilities and autonomy
to Local Government Bodies, and the promotion of greater
citizens participation and involvement in the affairs
of Local Government.
We recently concluded a series of Public Consultations on
this matter. In addition, a Local Government Inter-ministerial
Transition Task Force has been established to review and
advise on functions to be decentralised to Local Government
Bodies Municipal Corporations and to co-ordinate and manage
the Transition Process.
The Reform Initiative will be intensified in 2005 with the:
Production of the White Paper on Local Government Reform;
Identification of functions to be decentralised to Local
Review of the existing Legislation, By-Laws, and Regulations;
Review of Local Government Boundaries;
Restructuring of the Ministry of Local Government and Municipal
Establishment of Tax Collecting Units in regional Corporations.
We believe the reform of the Local Government Administration
can facilitate the more efficient delivery of services to
the public and the deepening of the democratic process in
Trinidad and Tobago.X TOBAGO
Mr. Speaker, permit me now to turn to Tobago.
My Government wishes to congratulate the Tobago House of
Assembly for their continuing efforts to develop Tobago;
and for the genuine partnership that has been forged with
the Central Government to ensure that Tobago, as I have
indicated in a previous budget statement, "catches
up" with the rest of the country. I am pleased to report
that among the principal fruits of this partnership are:
The record expansion of the Tourism Sector to an expected
100,000 visitor arrivals this calendar year;
The significant improvements in the operations of the air
The commencement of work on the new Scarborough Library;
The Buccoo Integrated Community Development Project;
The purchase of the Courland Estate; and
The settlement, once and for all, of the Pigeon Point issue.
And, we are pleased to announce that, in a matter of weeks,
the first phase in the long-term improvement of the service
on the sea-bridge will begin. The Cabinet looks forward
to the imminent submission of the Report of the THA-led
Task Force on natural gas and Tobagos future development;
and to the Report of the recently established THA Task Force
on the Cost of Living in Tobago.
Looking ahead, we are once again encouraged by the proposals
emanating from the Tobago House of Assembly for the next
fiscal year; and this is why this Budget, includes important
Enhanced Human Resource Training and Development;
The Tourism Rolling Plan;
The Scarborough and Roxborough Police Stations;
The Tobago Heritage Land Trust;
The Roxborough, Blenheim, Castara and Adelphi Housing Estates;
The LAnse Fourmi/Charlotteville Road.
Accordingly, bearing in mind this PNM Central Governments
firm commitment to ensuring adequate funding for the Tobago
House of Assembly, the 2005 Budget includes an allocation
of $822.9 million for the recurrent expenditures of the
Assembly; and a further $200.9 million for development programme
expenditures. To further facilitate the development of Tobago,
the Minister of Finance will assist the THA in accessing,
by way of borrowings, additional funding up to a maximum
of $500 million. Such funding will be subject of course
to the explicit approval of the Minister of Finance. XI
CARICOMMr. Speaker, Trinidad and Tobago benefits a great
deal by being a member of the CARICOM Community. We are
the largest exporter in intra CARICOM trade, accounting
for over eighty percent of exports within the Community.
CARICOM is our second largest export Market after the United
States and is therefore a significant contributor to employment
levels and the economic strength of Trinidad and Tobago.
Trinidad and Tobago is also the largest market for regional
Caricom exports. Additionally, in recent years, there has
been a significant outflow of Trinidad and Tobago investments
into Caricom destinations, as some of our leading Companies
expand beyond our shores. The integration process is clearly
irreversible and will be cemented even further with the
soon-to-be- established CARICOM Single Market and Economy.
Our future is therefore inextricably bound up with that
of our regional partners.
Our Caricom partners are now severely challenged by volatility
in both the weather and the price of oil. I have already
informed this Honourable House of steps we are taking to
bring relief in both these areas to our Caribbean family
and which will ultimately be of benefit to Trinidad and
Tobago. We have now also decided to establish the CARICOM
Trade Support Programme, to redress the trade imbalances
between Trinidad and Tobago and its CARICOM partners by
helping them to build capacity and expand their export capabilities.
A major component of the programme is the provision, by
the Government of Trinidad and Tobago, of a revolving loan
fund in the sum of TT$100 million to be disbursed on an
interest free basis to firms in CARICOM except those in
Trinidad and Tobago. May I also add that the feasibility
study on the Caribbean Gas Pipeline has been completed.
The Company interested in developing the pipeline is prepared
to deliver gas at stable and predictable prices. We also
want to ensure that prices are low if the real benefit of
stimulating economic development in participating countries
is to be realised. This may require significant adjustment
to our approach with this project.
Disaster Relief and Management
Mr. Speaker, the vulnerability of the Caribbean to natural
disasters has been accentuated in a most graphic manner
during this hurricane season. Thankfully, Trinidad and Tobago
has so far been spared the worst of these storms. We all
pray for the persistence of our good fortunes, but there
must now be further efforts to empower this country to cope
with the effects of natural disasters.
In addition to strengthening existing institutions, we will
establish the Office of Disaster Relief and Management,
a civilian agency responsible for the management of the
Disaster Relief Programme. We see a most significant role
for the Private Sector in this agency in terms of co-ordination,
resource mobilisation and logistical arrangements. We shall
also access the expertise of a similar agency of the Jamaican
Government. This initiative will be buttressed by the Engineering
Division of the Trinidad and Tobago Armed Forces, which
will be upgraded and equipped to provide disaster relief
at the community, country and regional levels. We have budgeted
$15 million for the establishment of this office and the
Disaster Relief Programme this year.XII ENHANCING TRANSPARENCY,
ACCOUNTABILITY AND GOVERNANCE
Mr. Speaker, my Government is committed to good governance.
For us, this means putting systems in place to ensure transparency,
accountability, the highest level of efficiency and effectiveness,
equity, and adherence to the rule of law.
An important element of good governance is the transparent
and effective utilisation of our oil resources, which we
must manage prudently taking into account the fact that
oil and gas are non-renewable assets; that petroleum prices
are inherently volatile and that we need to be mindful of
Mr. Speaker, total transfers to the Interim Revenue Stabilization
Fund to date now stands at TT$2,775.6 million.
It should be noted that following the Supplementary Appropriation
Bill passed in September 2004, the total amount transferred
for the last two years was $1,760.6 million; $497.4 million
in 2003 and $1,263.2 million in 2004.
The prognosis for higher levels of oil and gas revenues
is based on the current increase in and demand for energy
production both in oil and gas - and its prospects.
Firstly, oil production is expected to reverse its steadily
declining trend over the past two (2) decades and increase
from about 125,000 barrels of oil per day to about 203,000
barrels of oil per day by 2006. Secondly, Liquid Natural
Gas (LNG) production has been increasing and by 2006, with
Train IV becoming fully operational, the LNG industry in
Trinidad and Tobago would have an overall production level
of about 15.6 million tonnes per annum. Thirdly, the demand
for natural gas will continue unabated due to the establishment
of a number of natural gas-based plants.
The Cabinet has had intense discussions on various proposals
for putting aside part of these oil and gas revenue resources.
I would now like to report, Mr. Speaker, that the Government
has finally decided to formalise the interim Revenue Stabilisation
Fund, albeit with a broader, more comprehensive mandate.
While details are still to be finalised the Fund will seek
to satisfy the twin objectives of revenue stabilisation
and inter-generational equity.The main principles underlying
the design of the RSF will be as follows:
(i) the annual estimate of oil and gas revenues would be
determined by the long-term prices of crude oil and gas;
(ii) the larger part of the excess reserves (up to 60 percent)
would be earmarked for stabilisation or inter-generational
(ii) the remainder of the excess (up to 40 percent) will
be available to be allocated to strategic investments.
The resources earmarked for stabilisation and inter-generational
transfers will continue to be managed by the Central Bank
as part of the countrys reserves with appropriate
regard for the rate of return and risk diversification.
The part earmarked for strategic investments will be managed
in accordance with the highest standards of transparency
The proposed design of the Governance structure and the
investment criteria governing this part of the Fund will
need to be worked out. Overall responsibility for the management
of these resources will be vested in a Board of Trustees,
chaired by the Minister of Finance.
The Government will produce a public report on the Fund
on a quarterly basis.
Mr. Speaker, to further ensure transparency, accountability
and good governance, this Government is undertaking a fundamental
reform of its procurement process. The imperative for reform
centres on the need for good governance, public confidence
in the integrity of the procurement process, conformity
with international best practice, and regional and international
developments. Prevailing deficiencies in the legal and regulatory
framework, human resource limitations and lack of regulatory
oversight, further add to the urgency for a new objective
and comprehensive approach to the Governments acquisition
of goods and services.
In recognition of the importance of an appropriate procurement
policy, we appointed a Procurement Reform Committee which
has completed a Green Paper on the Reform of the Governments
Procurement Regime and which is now out for public comment.
The Green Paper identifies current international best practice,
suggests an appropriate procurement model for Trinidad and
Tobago, and makes recommendations for an efficient procurement
process. These recommendations include:
Decentralising the procurement process;
Establishing procurement units in all Government Ministries,
Departments and other State Agencies and Organizations;
Repealing the Central Tenders Board Ordinances, 1961;
Developing new legislation incorporating the fundamental
procurement principles of Value for Money, Transparency
Appointing an Independent Regulator to monitor and audit
the procurement process of all state agencies and organizations
spending public funds;
Recognising the Procurement Function as a profession in
its own right;
Providing education and training in procurement; and
Developing a cadre of procurement professionals and specialists
for the Public Service in the first instance.
Implementation of the new procurement regime is targeted
for June 2006.
Mr. Speaker, the new procurement regime will signal to the
local, regional and international community, this Governments
commitment to a quality of governance that reflects the
highest standard of Ethics, Transparency and Accountability
in the conduct of the peoples business.Reform of the
State Enterprise Sector
Mr. Speaker, during the past fiscal year, this Government
has undertaken several measures to ensure that the fundamental
principles of good governance, namely: integrity, transparency,
accountability and responsibility are embedded at all levels
of the State Sector.
State Enterprises have been mandated to publish a summary
of their un-audited half-yearly financial statements within
two months of the mid-year date, as well as a summary of
their audited financial statement within four months of
the end of their financial year. These requirements have
improved considerably the accountability of State Enterprises
by bringing information on their performance to the national
public in a timely manner.
Two seminars aimed at imparting good corporate governance
practices were held in 2004 for Boards of Directors of State
Enterprises and Statutory Authorities, and new Standard
By-Laws and a Code of Best Practice for State Enterprise
are currently being finalised.
Mr. Speaker, we are well aware of the importance of energy
revenues to Trinidad and Tobago. As part of Governments
commitment to transparency Trinidad and Tobago expressed
its support for the Extractive Industries Transparency Initiative
at a multi-stakeholder conference in the United Kingdom
A number of multi-nationals with operations in Trinidad
and Tobago have also agreed to support the Initiative. The
Government intends to work with these multi-nationals and
other relevant entities in this country to develop a reporting
format for revenues generated in the extractive industry
and the oil and gas industries in particular. This represents
a joint public/private sector approach to transparency.
Integrity in Public Life
We shall do more. We have implemented the new law pertaining
to integrity in public life; a law, which is consistent
with international best practice. We have gone a bit further,
however, and strengthened the mechanisms for detection and
investigation of all acts of malfeasance conducted by public
officials. We intend to take all measures necessary to prevent
the illicit enrichment of individuals at the expense of
the People of Trinidad and Tobago. In other words Mr Speaker,
we shall deal clinically and comprehensively with corruption.XIII
Analysis of the Budget
Summary Analysis of the 2005 budget
Mr. Speaker, I now turn to the fiscal measures of this Budget.
Total revenues are budgeted at $24,015.5 million, of which
petroleum revenues will amount to $9,580.5 million; taxes
on income, excluding oil, will generate $6,112.4 million;
VAT will provide $3,045.0 million; and Taxes on International
Trade of $1,200.4 million.
Mr. Speaker, total central government expenditure including
capital repayments and sinking fund contributions for fiscal
year 2005 has been budgeted at $27,917.9 million, of which
the sum of $20,769.4 million will be provided for by way
of the Appropriation Bill. The sum of $6,798.4 million will
be a direct charge on the Consolidated Fund, while the Government
proposes to spend $300.0 million from the Unemployment Fund
and $50.0 million from the Road Improvement Fund. These
items of expenditure do not form part of the Appropriation
Mr. Speaker, our Revenue Estimates are based on an average
oil price of US$32.80 per barrel (Galeota mix) along with
an netback gas price of US$1.50 per cubic foot for fiscal
However, our expenditure programme for fiscal 2005 is based
on an oil-planning price of US$25 per barrel with a netback
gas price of US$1.50 per cubic foot. The difference between
the oil-price on which our revenue estimates are based,
i.e. US$32.80, and our expenditure planning price of US$25.00
is estimated at $1,356.9 million .We are appropriating 100
per cent for transfer to the Interim Revenue Stabilisation
Fund. This would bring the balance in the fund to $4,209
Mr. Speaker, consistent with our commitment to fiscal discipline
to support our strong macro-economic environment, the budget
for fiscal year 2005 envisages a fiscal surplus of $7.7
million, after taking into consideration transfers to the
Interim Revenue Stabilisation Fund.
Total expenditure for fiscal 2005 is disaggregated as follows:
Total Recurrent Expenditure $25,492,851,946
Personnel Expenditure $5,372,108,455
Goods and Services and Minor Equipment $3,141,379,574
Current Transfers and Subsidies $7,660,674,822
Transfers to the Tobago House of Assembly $822,900,000
Transfers to Statutory Boards and Similar Bodies $1,753,540,255
Debt Servicing $6,742,248,840
Total Development Programme $2,075,000,000
Total of the Draft Estimates of Expenditure $27,567,851,946
Unemployment Relief Programme 300,000,000
Road Improvement Fund 50,000,000
Grand Total $27,917,851,946
The recurrent and capital expenditure on Governments
fiscal operations is projected at $24,007.8 million, which
represents total expenditure of $27,917.9 million less principle
repayments and sinking fund contributions of $3,910.0 million.
The level of capital expenditure included in the budget
(the development programme) is $2,100.0 billion, an increase
of 22.3 percent over last years outturn. This figure
does not include capital expenditures executed by state
agencies on behalf of the central government as well as
state enterprises in the sum of $7,402.5 million.
The Governments expenditure priorities as reflected
in the allocation to the following key Ministries as follows:
(i) Ministry of Education $3,140.3 million;
(ii) Ministry of National Security $2,331.5 million; and
(iii) Ministry of Health $1,861.4 million.
While expenditure in social services is estimated at $3,080.2
Mr. Speaker, I will now wish to give a summary of the major
fiscal measures being introduced in the context of the 2005
to recipients of Pensions and Public Assistance
We propose to increase the maximum old age pension from
$1,000 per month to $1,150 per month. This measure will
take effect from the first of October 2004;
We propose to recommend to the Public Assistance Board that
payments of public assistance be increased by $150 per month
and that this increase takes effect from the first of October
We propose to increase the level of disability assistance
grants from $650 per month to $800 per month. This measure
will take effect from the first of October 2004;
These measures relating to the increase in Old Age Pension,
Public Assistance and Disability Assistance Grants will
benefit 98,065 individuals and will cost approximately an
additional $177 million per annum.
Measures to address the rise in prices
We propose to reduce the surcharge on the importation of
chicken and turkey parts from 86 percent to 40 percent.
This measure is expected to reduce the price on these specific
products, improve the level of competition in the market,
and hopefully lower chicken prices in general. This measure
will take effect from the First of November 2004. If this
measure does not generate an appropriate reduction in poultry
prices, the surcharge will be reduced further until the
expected benefits to the consumer are realised. Mr. Speaker,
we should note that under the Seventh Schedule to the Miscellaneous
Tax Order of 1997 this surcharge would come to an end on
the 31st of December 2004, unless renewed;
We propose to remove the Common External Tariff (CET), subject
to the approval of the CARICOM Secretariat, on;
Black eye Beans; and
We propose to Zero-rate for VAT purposes and with immediate
Orange Juice.Poverty Alleviation
We propose to expand the SHARE Programme from 15,000 Food
Hampers per month to 20,000 per month, as well as increase
the value of each hamper from $200 to $250 per Hamper. This
measure will take effect from the first of November 2004
and will now cost the Treasury $60 million annually;Relief
to Low Income Wage Earners In order to directly help the
lowest paid of the labour force deal with recent price increases,
We propose to recommend to the Minimum Wages Board that
the minimum wage be increased from $8 per hour to $9 per
hour with effect from the First of January 2005;
To help small businesses deal with this increase in the
minimum wage, we propose to remove the Business Levy from
registered small businesses; this will take effect from
the first of January 2005.
To provide relief to low income taxpayers, We propose to
increase the personal allowance for tax purposes as follows:
(i) For individuals with a gross income not exceeding $30,000
per annum, the personal allowance will be increased by $5,000
from $25,000 to $30,000 per annum;
(ii) For individuals with a gross income exceeding $30,000
per annum, the personal allowance will be increased by $5,000
less $1 for every dollar of gross income above $30,000.
To address the plight of retired Public Service Officers,
we propose to grant an ex-gratia award to retired Officers
Public Service Officers who retire on or before 31st December
1984 will receive an exgratia payment of $400 per month;
Public Service Officers who retire Between 1st January 1985
and 31st December 1994 will receive an ex-gratia payment
of $300 per month; Public Service Officers who retire between
1st January 1995 and 31st December 1999 will receive an
ex-gratia payment of $150 per month;
Widows of Public Service Officers will receive an ex-gratia
payment of $150 per month.
This measure will take effect from the first of October
2004 at an additional cost of approximately $62 million.
Free AllowanceMr. Speaker, individuals travelling abroad
currently enjoy an exemption from customs duty (Duty Free
Allowance) in respect of goods belonging to them not exceeding
$1,200 in value per annum. The goods covered by this exemption
are goods which accompany the passenger and which were acquired
abroad or in local In-Bond shops for personal or household
use or as souvenirs or gifts.
We propose to increase the exemption from $1,200 to $3,000
Tax AdministrationMr. Speaker, in order to improve the efficiency
of the Tax Administration, we propose to put into effect
a number of measures designed to close some of the loopholes
in the tax regime.Set-Off of LossesMr. Speaker, Section
16(3) of the Income Tax Act prohibits the set-off of losses
from any trade, business or farming against income from
employment or profession. However, losses from other sources
of income such as rental income may be set-off against income
from employment or profession. Taxpayers have been utilising
increasingly losses from sources other than trade, business
of farming to reduce their income from employment or profession.
We therefore propose to amend section 16(3) of the Income
Tax Act to prohibit the set-off against employment or professional
income of losses from any other source of income specified
in section 3 of the Act. Taxation of Benefits in KindSections
133 to 141 of the Income Tax Act provide a scheme for the
taxation of benefits in kind received by employees and directors
of companies. However, section 136(5) provides that these
provisions do not apply to persons employed by schools or
other educational establishments. There is no justification
for this exemption.
Further, section 139 of the Income Tax Act provides that
the benefits in kind provisions apply only to companies
carrying on a trade or engaging in investment. The provisions
also do not apply to persons employed by charities or municipalities.
There is no justification for the favourable treatment of
We propose to delete sections 136(5) and 139 of the Income
Tax Act with effect from the coming into operation of the
new Finance Act.
Deed of CovenantMr. Speaker, the Finance Act, of 1997 abolished
claims for deeds of covenant by individuals. One of the
amendments made to achieve this was the deletion of section
21 of the Income Tax Act, which provided for one-year deeds
of covenant. Section 21 had been applied to the Corporation
Tax Act. The effect of deleting section 21 from the Income
Tax Act means that since 1997 companies have been entitled
to only deductions via multi-year deeds of covenant and
not one-year deeds. This was obviously an oversight in the
drafting of the Finance Act of 1997. In fact, the Board
of Inland Revenue continued to approve one-year deeds of
covenant submitted by companies since 1997 even though the
legislation does not provide for such deeds.
We therefore propose to amend the Corporation Tax Act to
include a provision similar to the former section 21 of
the Income Tax Act and that this amendment be made retroactive
to January 1, 1997 to validate the deeds of covenant already
Application of VAT Refunds to Other Tax Liabilities
Mr. Speaker, Section 11(a) of the Finance Act. 2004 sought
to amend the Value Added Tax, 1989 to permit the Board of
Inland Revenue to apply a persons VAT refund to any
other type of tax liability such as income tax or corporation
tax. However, there was an error in the amendment contained
in section 11(a) in that the section in the Value Added
Tax Act, 1989 to be amended, namely section 35, was not
We propose to amend Section 35 of the Value Added Tax Act,
1989 to provide for the application of VAT refunds to outstanding
taxes under any other Act administered by the Board of Inland
This amendment should take effect from the first of January
Waiver of penalties Under the Stamp Duty Act
Mr. Speaker, Section 87(2) of the Stamp Duty Act gives authority
to the Minister of Finance for waiving stamp duty penalties.
The current practice as prescribed in other tax legislation
is to confer on the Board of Inland Revenue the power to
waive penalties. This simplifies the procedure instead of
having to obtain Ministerial approval.
We propose to amend Section 87(2) of the Stamp Duty Act
to confer on the Board of Inland Revenue the power to waive
This amendment should take effect from 1st January 2005.Energy
Mr. Speaker, I indicated earlier that notwithstanding the
significant increase in the price of oil, the tax accruing
to this country from our hydro-carbon resources was considerably
less than expected, due to a number of reasons, including
a tax system that needs to be reviewed and modernised.
Mr. Speaker, the current tax system came into effect in
1992 at a time when the energy landscape was considerably
different from what obtains today.
Today, our gas and gas-based industries are poised to dominate
the energy sector, surpassing the once dominant oil sub-sector.
Today, we are a contributor to the energy security of the
US, and in particular to the US Eastern Seaboard. Gas is
now the preferred source of energy for the US.
This notwithstanding, the oil sub-sector, would continue,
and must continue to make a significant contribution to
the development of the domestic economy by providing its
fair share of revenues to the national treasury. Accordingly,
we propose to review the current petroleum tax regime, and
have already begun discussions with the oil producing companies.
Given the highly complex and technical issues that need
to be resolved, we expect that these discussions will take
upwards of six (6) months before a new tax regime is hammered
In the interim, we propose to:
Review and re-negotiate all existing Production Sharing
Re-activate the Petroleum Crude Oil Pricing Committee
Monitor exports of crude oil on a destination basis
Review the tax liability of the oil companies over the last
six (6) years as provided for in the current tax lawsApplication
of Sport Allowance to Petroleum Companies
Mr. Speaker, Section 10 I of the Corporation Tax Act provides
for a 150% allowance up to $1,000,000 for the sponsorship
of sporting activities and sportsmen. However, petroleum
companies have been unable to access this allowance since
the provisions of section 10 (I) were not applied to the
Petroleum Taxes Act. It should be noted that the Finance
Act, 2004 extended the 150% allowance for art and culture
and sponsorship of audio and video productions to the Petroleum
Taxes Act. We propose to extend the 150% sport allowance
to petroleum companies with effect from the first of January,
2003 when the incentives extended to Petroleum Companies
under the Finance Act, 2004 took effect.XIV Conclusion
Mr. Speaker, with this Budget, we take the country forward
into a future of continued prosperity and stability, greater
equity and enhanced opportunity for all.
We shall make the economy stronger through increased investments
and further diversification.
We shall continue to invest significantly in the countrys
human resource, as a principal factor in social and economic
We shall improve the nations infrastructure for the
better comfort, convenience and security of the citizenry,
and for greater economic efficiency and productivity.
We shall modernize the administration of the nation at both
central and local government levels.
We lead the way in saving for a rainy day.
With these Measures, we move towards our goals of full employment,
poverty eradication, and vastly improved opportunities for
We shall attain enhanced security and greater social cohesion
We shall improve care for the elderly, disadvantaged and
We are setting the standards and establishing the mechanisms
for openness, transparency, accountability and integrity
in the conduct of public affairs.
We shall fulfil our regional and international commitments
Ours is heading to be a model nation of the modern world.
This Budget shall strengthen our foundations and create
room for the planned expansion and managed development that
will take us to our goal of transforming Trinidad and Tobago
into a developed country.
Let us therefore move forward with greater determination
than ever before. Let each individual try harder than ever
to improve his or her life through legitimate means. Let
us build friendships and strengthen the family. Let us practice
equality of treatment and respect for all. Let our spirit
be always nourished by our rich diversity. Let us build
our Communities and love our Country. Let us ensure a secure
legacy for the children of Trinidad and Tobago.
Mr. Speaker, I beg to move.