Wednesday 28th September, 2005

 
ACHIEVEMENTS IN FISCAL YEAR 2005
 
 
 
 
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I will now turn to our performance in other areas over the past year.

Mr. Speaker, it is my privilege to lead a Government that continues to record tremendous economic success. But, success has not come easy, nor has it been by chance or sheer good luck. Success has come because of our good economic polices, because of the talent of our people and the vibrancy of their entrepreneurial spirit.

Indeed, two international credit rating agencies: Standards and Poors and Moodys recognised the quality of our macro-economic management and increased Trinidad and Tobago's credit rating. Standard and Poors, in upgrading our local and foreign currency rating from BBB+ to A-, noted our growing net public sector creditor position which, I must emphasise, was considerably stronger than the 20 percent median for A-rated sovereigns. Our prudent fiscal and monetary policies were also contributing factors. In raising our foreign currency rating from Baa3 to Baa2, Moodys cited essentially the same strengths.

Mr. Speaker, real GDP increased by 6.5 percent. This was the twelfth consecutive year of positive growth in Trinidad and Tobago and could be somewhat of a record among developing countries worldwide.

Our non-energy sector has also registered positive growth rates as a result of the buoyancy of the construction sector, increased activity in manufacturing, tourism and the expansion of small business activity in distribution and services.

Economic expansion has led to the creation of more than 28,000 jobs in 2004 and a reduction in the unemployment rate to an average of 8.3 percent with the rate in the last quarter of 2004 being 7.8 percent; as a result of which skill shortages have arisen in some sectors. I wish to indicate, Mr. Speaker, that this Government is accelerating the expansion of training programmes to deal with these shortages.

Inflation, which has been subdued for several years, has risen slightly in 2005. For the most part, this has reflected high food prices due to the impact of inclement weather on domestic agricultural production and to the increase in import prices related to the rise in the international price of oil.

Our external sector has been particularly strong with the country's external reserves now at a comfortable level of US$3.8 billion, or the equivalent of 7 months of imports.

Mr. Speaker, the year 2004/05 was also another year of disciplined, efficient and responsible fiscal management.

In terms of the broad picture, the Central Government registered a surplus of $299.7 million, which is significantly larger than originally expected.

Honourable Members may recall that for revenue purposes the 2005 Budget was predicated on an oil price of US$32.80 per barrel. As it turned out, the average oil price received for our mix of crude oil exports was US$41.16 per barrel which resulted in oil revenue collections of $11.1 billion, some $3.2 billion higher than envisaged in the Budget. With non-oil revenue also slightly higher than budgeted, total revenue collections exceeded the Budget estimate by $4,185.4 million.

Total expenditure for the year is estimated at $27,901.3 million. It is important to note, Mr. Speaker, that this expenditure is $3,893.4 million more than the original Budget figure.

Permit me, Mr. Speaker, to explain to this House and to the population at large, how the Government spent the revenue collections.

(i) While in the Budget we had undertaken to transfer $1.4 billion to the Interim Revenue Stabilisation Fund, we in fact transferred $2,593 million. That is responsible fiscal management and underscores this Government's commitment to putting aside savings for the welfare of our children and grandchildren.

(ii) We spent some $1.4 billion on subsidies to maintain the price of gasoline and other petroleum products. This was partly funded by the Production Levy on oil producing companies. I am sure that Honourable Members of this House would know that fuel prices have reached astronomical levels both in the region, as well as in the developed countries. And as fuel prices go, so do the prices of bus and taxi fares, of electricity and indeed the prices of a whole range of items that are significant in the Budgets of the middle and lower income groups. Without subsidies, a gallon of 92 RON unleaded gasoline which now sells at $2.70 per litre would have to be sold at $5.20 per litre, $1.48Bn is a very significant outlay on petroleum product subsidies, and Trinidad and Tobago will in due course have to decide what would be a reasonable size for this "Oil Dividend" and at what prices it would be reasonable to sell this increasingly precious commodity on the domestic market.

(iii) Education, National Security and Health, clearly our three priority areas, accounted for $7.5 billion or 20 percent of total expenditure: interest payments amounted to $2.6 billion and pensions, another category of statutory payments, amounted to $2.0 billion.

(iv) Transfers to the THA and to local authorities amounted to $1.6 billion while other similar transfers (to deal with CARONI and BWIA, to maintain water and electricity rates and to subsidize inter-island transport) amounted to another $1 billion.

(v) Mr. Speaker, an amount of $426 million was spent on the Unemployment Relief Programme in the past fiscal year. While this Programme has had its challenges, it has been an important instrument of poverty alleviation providing approximately 50,000 temporary job opportunities for individuals.

(vi) Expenditure under the Public Sector Investment Programme (PSIP) amounted to $2,847 million.

We have reduced the ratio of public debt to GDP from 48 percent to 40.5 percent.

In the process of building such strong economic fundamentals, Mr. Speaker, the lives of many people across the country have been improving. This Government is justly proud about the successes achieved during the current fiscal year. We honoured our commitment to distribute the benefits of development to all citizens through enhanced healthcare, education reform, improvements in infrastructure, provision of housing, job creation, training opportunities and quality social services.

Mr. Speaker, while the respective Ministers will outline the achievements in greater detail, I would like to highlight the following:-

Our Successes

* The establishment and rapid development of the University of Trinidad and Tobago is nothing but a spectacular success. With the advent of UTT and the introduction of our GATE financing programme, enrolment in tertiary education has increased by forty percent.

* We have had several other successes in our thrust to develop a high-quality seamless education system - the launch of our pre-school education programme, the initiation of a programme of home-work centres and the introduction of a system of local school boards cementing the links between the schools and the community.

* The Textbook Rental Programme, the School Transportation Programme and the School Feeding Programme were all expanded. The number of books provided increased from four hundred and fifty thousand in fiscal year 2004 to 1.2 million in fiscal year 2005 and included primary and secondary schools. The provision of breakfast meals increased from 25,000 to 37,208 and lunches from 92,000 to 94,736.

* Under the GATE programme, we processed 24,117 applications at a total value of $138 Mn. This represented more that twice the number of applications processed by the Dollar for Dollar Programme in fiscal 2004.

* In health, despite all the setbacks, and all the industrial issues that always seem to arise at the most inopportune times, we have been making significant strides in providing quality health services to the country. We have drastically reduced the waiting lists and the waiting time for a whole range of surgical operations, including cataract, hernia, prostate, orthopaedic, and certain gynaecological conditions.

* The Chronic Disease Assistance Programme (CDAP) has been a phenomenal success providing thirty-six (36) drug items free of charge for persons suffering from cardiac disease, hypertension, diabetes and a host of other ailments. To September 2005, over 500,000 prescriptions were filled on behalf of approximately 150,000 citizens.

* From January I, 2005, we increased access to the Eric Williams Medical Sciences Complex, making services not provided at other public health institutions available to the public free of charge on referral from other public health institutions. The result has been overwhelming.

* Our housing programme has been an unparalleled success. Over 6,000 houses were constructed in fiscal 2005.

* We also established the Family Court Project to facilitate settlement of family disputes in an environment which is different from the confrontational atmosphere of traditional courts

* We distributed Caroni lands as promised. A total of 7,247 former workers received two-acre plots of agricultural land for intensive cultivation while 6,755 persons will receive residential lots shortly. This distribution should set the basis for a resurgence in domestic agricultural production. We also fulfilled our commitment to provide training for former CARONI workers. As much as 2,854 former daily paid and 751 monthly paid workers have already benefited from training through agricultural programmes, and technical and computer literacy courses. Mr. Speaker, this is yet another demonstration of keeping our faith in the country and to Caroni workers.

* Despite operational deficiencies, WASA improved the levels of service to more than 50,000 persons in over 32 communities including Arima, California, New Grant, Carenage, Square Deal, Maraval, South Oropouche, Carlsen Field, Siparia, Sangre Grande, Paradise Heights, Vion Hill, Buccoo and Signal Hill.

* The Municipal Wastewater Treatment Facility at the new Beetham Plant was completed and will serve Port of Spain and environs from Diego Martin in the West and Mt. Hope in the East thereby providing a better service to over 300,000 individuals.

* In 2004, our hotels recorded the highest ever occupancy levels. Trinidad averaged 80 percent while Tobago averaged 85 per cent.

Mr. Speaker, of the many successes in the energy sector, I must single out the manufacture of the second-locally fabricated platform - the Cannon-ball constructed for bpTT in our fabrication yard at La Brea, by Trinidadians and Tobagonians. This feat spells the dawn of a new industry in Trinidad and Tobago, (the platform-manufacture industry), and constitutes a significant boost for our local content strategy.

Mr. Speaker, by any standard, these are remarkable achievements that give the Government and the public sector the confidence to carry on with the transformation of Trinidad and Tobago.

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