A FORMER chairman of National Petroleum Marketing Company of Trinidad and Tobago (NP) is calling on the Government to use the windfall from oil and gas prices to pay outstanding collective agreements.
This according to Neil Gosine, an insurance executive, speaking at a pre-budget consultation of the held by the opposition United National Congress (UNC) last week.
He said the government should use the additional revenue to clear arrears, pay outstanding gratuities, subsidise fuel, social welfare and wages for public servants upon the completion of negotiations.
Gosine, who is also the treasurer of the UNC, said, “Of course again the Government hasn’t completed negotiations with public servants offering them next to nothing and nothing at all. The minister of finance have not really fulfilled his promises and nothing really came out positively in 2022.”
Minister of Finance Colm Imbet will deliver the 2022/2023 Budget in the Lower House from 1.30 pm Monday.
Gosine said the 2021/2022 Budget was laid in October last year based on assumed oil and gas prices of US$65 a barrel and US$3.75 per mmbtu respectively.
He said the total revenue based on the assumed prices was $43.3 billion and the total expenditure was $52.42 billion, leaving a fiscal deficit of about $9.096 billion. Of the total revenue, it was expected that $12.6 billion would be revenue from oil.
Gosine said, “Out of the revenue, government supposedly made plans to provide a supportive environment for growth in the private sector, for entrepreneurs, for domestic businesses and for foreign investment; and further was to help build the manufacturing sector.
“Government also planned to continue paying VAT returns to businesses to ensure that they get better cash flow. Of course this never occurred
“As a result of worldwide shocks and uncertainty however, oil prices sky-rocketed past predicted prices.
According to Oilprice.com WTI Crude oil prices as at (July 20) this stood at US$102.6 a barrel and Brent crude was US$107 a barrel.
Gosine said at the mid-year review presented by Imbert on May 16, additional revenue from higher oil prices stood at about $3.081 billion.
The thing about Politicians and Unions about using windfalls from Oil and Gas to pay Public Servants is what has this country in the mess we have today.
We simply cannot use a windfall now to commit to a settlement of $ Billions that would be paid out over 10 to 15 years, when there’s no guarantee that the windfall would last a lifetime.
We mag get a windfall of $ 5B between 2021 to 2025. But to continue paying out to 84 thousands of Public Servants every month an increase that is not justified, would put the country into the Dark Ages.
If we pay more than 4% how much that would cost over 10 years? It would be far less than $ 5Billion.
The first thing people has to do is study “Economic of Scale”.