RETRENCHMENT AND ITS EFFECT ON THE ECONOMY

[00:00:01] Speaker A: The best insight, Instant feedback Accountability the all new Talk Radio Freedom 106.5 Good [00:00:08] Speaker B: Morning Again, Trinidad and Tobago Eye on the economy, the first segment of it, retrenchment and its effect on the economy. Andrea Perez Silbers, CNC3 business reporter. Good morning to you, Andrea. [00:00:22] Speaker C: Good morning Davy and good morning to your listeners. [00:00:25] Speaker B: It's good to have you again. Welcome on this very, very important topic. Andrea. People are getting sent home left, right and center. This government, when they came into power, we saw 10 thousands of persons released from jobs in CPEP, forestry workers and of course URP workers among others who would have lost their job. How is this retrenchment affecting the economic viability and sustainability of our economy? [00:00:53] Speaker C: You mean this entrenchment retrenchment that happened before? Right? You're not talking about Nestle? Well, don't mix up the two. [00:01:01] Speaker B: I'm not mixing up the two. Nestle instead of nobody yet. [00:01:03] Speaker C: Yes. So that's what I say. Yes. Yes. [00:01:06] Speaker B: Yeah. [00:01:08] Speaker D: No, no. [00:01:10] Speaker C: Well, my colleague Peter Christopher would have done a story today in the Business Guardian stating that our debt is very troubling. We are charting into dangerous waters. We would have spoken to various people including the former minister in the Ministry of Finance, which is Brian Manning and he said the amount of money that we are borrowing, it shows that the government is trying to is struggling to keep afloat. So they are borrowing excess amount of money because from the Heritage and Stabilization Fund they took over $500 million in just in US in just six months last year. So and then they went and do the bond as well, which is the US 800. So it's a bit troubling to well economists and even citizens who are paying attention that so much money is being borrowed in just a short space of time. So it shows that they're trying to obviously pay the back pay for the public servants association and the different things to try to keep afloat and obviously they're going to be cutting in different areas where they see that is not viable at this time and in order for them to keep on the books. [00:02:56] Speaker B: But Andrea, with all this borrowing, with all this multi billion dollar borrowing to pay the back pay as you mentioned, and what is government looking at based from your perspective and your investigative reporting, to sustain and facilitate the extra money to pay to public servants going forward. The back pays, a one off payment, you pay that is done and it's not a recurring expenditure. So what happens to the increase, the 10% increase that the wages across the board, which is thousands of workers Is government looking into some avenue to generate income? How are we going to sustain, even facilitate the repayment of the loan? [00:03:44] Speaker C: Well, I think that's why they borrowed that amount of money too, to try to keep their head above the water and then study how is it going to be feasible to sustain that 10%. Well it's not really 10 percenter, it's the 4% because you remember they're getting some in non cash. So it's not the full 10% in terms of keeping afloat. They have to study what other revenues that could be brought on. Because the Finance Minister is not accessible as we would like him to be. We don't know what is their revenue stream that they're looking at and they haven't said what other revenue streams they're looking at. I see that they're cutting some programs like my lot was cut. So I think that's their way of trying to save money as well. So I think that their way of trying to get revenue is cut some of the programs that they don't see that is beneficial to the country right now in their eyesight. [00:05:10] Speaker B: But cutting these programs and you know, as one texter would have said, keeping the vulnerable at risk because they no longer have access to these training facilities, that provides a skill set and even discipline. How prudent was that? Now cutting those programs, okay, you don't pay $22 million a year and $35 million a year, but that's a drop in the bucket compared to what you have been borrowing and compared to the recurrent expenditure that is on the horizon. Outside of that, Brian Manning has said it best recently that we are over borrowing. What is the difference between, I mean you would have wrote stories coming out from the past administration to this current administration. How are we to look at that with the borrowing of this administration as opposed to the borrowing over the nine and a half years of the previous one? What's the difference? [00:06:00] Speaker C: Well, the difference is the former Finance minister, well he went on a road show as well and he would have, he would have get that same bond like, like, like this previous government. But I think what his strategy was different in terms of he didn't want to go to this kind of limit of borrowing. So where the country end up enders ends up in this kind of debt. Because when you borrow obviously you have to give back. And when you're giving back, you're not giving back in local currency, you're giving back in US currency. That's something that we are very constrained for right now. So his Terms of borrowing was totally different and they tried not to borrow, hence why they wanted to bring on the ttra, the Revenue Authority and different things to help. Obviously some people did not agree with the TTRA coming on stream, but there were different things, different approaches which the Finance Minister never told the country as a collective as to what he was doing to try to manage stuff. I have contacts in the Ministry of Finance and they have all said that what the former Finance Minister was doing was pretty good in terms of he will have conversations with them, he will have conversations with different governments in different parts of the world of how you do, how you cut spending in different places. So they told me that they were cutting spending, but we won't seeing it. So and what he was doing like in the different budgets, he was, he was putting on taxes which obviously the citizens did not like. So that's how he was trying not to borrow as much. So he was adding on taxes to kind of save face from going to borrow this excessive amount. Because obviously when you borrow, you have to pay back. [00:08:26] Speaker B: One Texas says a question for your guests. We always hear about borrowing from the hsb. How does government repay such a loan? Can the ordinary citizen track this supposed repayment as he heritage stabilization? [00:08:44] Speaker C: That's a real good question. The regular citizen cannot track it because what they do, the hsf, they send out a report ever so often. So that's how we knew how much money was drawn down from the HSF last week, because they sent out a report. So when the money is repaid, they then send out a report again and say that this money was repaid to the Heritage and Civilization Fund under the previous government. When there were talks about oh, they're drawing down a lot of money from the hsf, the former Finance Minister was able to get up and say, but no, but we repaid 2 billion so far, you know. So it is for the, the Finance Minister to tell the public how much money it was able to pay back to the Heritage and Stabilization Fund in the coming months or the coming year. So that's a question that the MPs, the opposition MPs have to ask in Parliament when Parliament resumes as well too. But as I say, the report comes out. So sometimes not, sometimes they would say, well, this is how much drawdown and this is how much was repaid. So I guess when they start to repay, we will know that from the report when they send out the report. [00:10:22] Speaker B: Because I'm now seeing a Texas saying that the Norway's oil fund has hit a $2.2 trillion, which each Citizen Paper share is now worth some 385,000. Says that's the basis why he asked the question pertaining to the repayment. Now should it be made possible, do you think it would be prudent for the government to have some kind of website set up where citizens, if they wish to get updates and insight as to what's taking place with government repayments, they can just log in freedom of information kind of thing and view this. How prudent and practical do you think that will be? [00:10:59] Speaker C: Yeah, that will be and practical. But that's if that's if they want the citizens to know, like have that kind of access freely because yes, it would be a good thing to know because obviously you want transparency when you're borrowing money and you want the, the citizens to know. But then they might say if they put it on the website, some people might be able to doctor it and, and give an inflated rate of what they did not borrow and that could cause, you know, you to go in some kind of chartered waters that you don't want to go into. So then, then there's that. [00:11:43] Speaker B: Okay, I understand. We have a text that wants to send share. Well, they have a caller first. Hello, Good morning. Hello, good morning. Good morning. [00:11:52] Speaker D: I wanted to ask Mr. Look, I don't want to get involved in politics, but I just want to ask you, have you found the reasons put forward by this present administration for the lack of implementation of the ttre credible? Because Mr. Anthony Wilson came on this program and he described it to me as the greatest white collar crime that had been taking place in this country for more than 20, 30 years. Because if it is that you are telling me that you are only collecting 60% of all legitimately collectible revenue, then something has to be wrong if other countries, Albidos, Guyana, Jamaica and even Canada, they all take the same corrective measure. That's why you don't want to take it. You find their reasons credible. I listen to your comments. [00:12:48] Speaker B: Thank you, Eric. [00:12:52] Speaker C: Oh yeah, your listeners well informed. [00:12:54] Speaker B: Boy, of course they are. [00:12:56] Speaker C: Yes, yes, yes. I'm very impressed. I don't know. I, well Anthony Wilson, as everyone knew, that's, that's my editor, what he would have said so 60 so what that listener is saying too with like with Barbados and stuff, unfortunately, Bobby, this is in the hands of the IMF and people are saying, as he just said, you just have only 60% of revenue, which is telling, right? So a lot of economists in the past, like in the past few months would have said that because of this heavy borrowing as well, we can't end up like Barbados and be in the IMF funds. Now Barbados has a huge debt as well too, so. And they have a lot to pay back the imf. So it's telling the TTRA as I say, well, they have always been against the TTRE when they were in opposition. I remember the now finance Minister saying that jobs will be lost and it is not as prudent as they say that the country will make this set amount of revenue that was just make up numbers. So they were against the TCRE from the beginning and especially when the PSA jumped on the bandwagon and they said no, they don't want it. And they went to the court and they went to the High Court as well to challenge this matter. The opposition, well then opposition they said, well yes, they agree with them because that means that a lot of people will be out of work. And that's why they saw that the TTRE was not viable. But the then government had said no, it was going to be viable and the former Finance Minister had broken, broken down as to how it was going to be viable for the country. [00:15:12] Speaker B: Now when we look at the TTRA which is the Trinity Revenue Authority that they wanted to bring in, right. How different is it from the Board of Inland Revenue that we currently have that is responsible for collecting taxes? Persons pay their taxes, their green levy funds, all these different things, business and private. Why do we need a separate body? Is it that we were going to disband and close down and take it and get rid of BIR and go with ttra or is it that TTRA was to run parallel to the BIR system? What was to happen? [00:15:50] Speaker C: Well, I think that's what they wanted for the BIR to run parallel to the TTRA system. So you were going to obviously collect the National Tax and customs collections between the, well, the two bodies, which is bir. But I think this, what the former Finance Minister was saying that this would have been more prudent in terms of they were going to be using more digital stuff to keep abreast of the taxes. Because he was saying under the BIR alone there were a lot of taxes that were not being paid. So I don't know if you would remember that they had the owner of Movietown when they asked him these are the amount of taxes that you have outside, which was 94, $94 million was his, was his taxes. So what he was saying, some people were getting to, to come through the loopholes and with this dtre that wasn't going to happen. You're going to have a more prudent approach to collect all the taxes. So the loophole that was, that were created under like the BIR and stuff, that would not have happened under the [00:17:22] Speaker B: ttre, then why not just tighten and put more stringent procedures in place to ensure that the BIR was able or to carry out the functions? Because to me, you're going to hire more persons. It's going to be more burden on the, on the public's purse as employees are now being responsible in a separate and apart department. When you say department entity, the Santa Bago Revenue Authority, as opposed to the Board of England Revenue Authority. Why not just put those same persons, hire more persons, put them in the Board of Inland Revenue, continue to look at departments, put HODs in place, KPIs and get this thing functioning. Why did we need to create the Revenue Authority? Is it that they were going to have separate legislation apart from what the current Board of Inland Revenues mandate is to do, which is to collect taxes? So if you're saying that we're not collecting because Movitong owner, as you mentioned, was owing a lot, another radio station owner was also owing and all these things. Right. Why not have, you know, hold people accountable? You're working, you are responsible for following up on these things. Why did, why, why, why create that? Why, why could that not happen now, in your respected opinion, Andrea? [00:18:45] Speaker C: Well, I don't know. Well, the then opposition had, they had expressed that because they were saying why, why bring on the, the TTRE when he could have done the same thing that you just explained. Right. But they never really went into why they thought that, you know, it, it made sense to the, the then government to bring on the CTRA instead of just having tighter legislations. Now the, the TTRA bill was. The act, sorry, was passed in 2021. Right. So that was a total debate that was happening. In addressing the Parliament on February 24, 2023, the former Finance Minister Colm Ember said with an estimated domestic tax gap of up to $10 billion, the government threw the. The TTRA is actively seeking to address their fiscal vulnerability and close the tax gap by improving the efficiency of the country's revenue. So they were saying with this setup of the CTRE they were going to collect $10 billion. And with the scrapping of it by this government means that is less revenue. [00:20:23] Speaker B: I. Okay, I take your score. Quickly, quickly. Yes, I've said morning to Davy. [00:20:27] Speaker E: Good morning to your guest and I want to thank her very much. And, and the point I'll be making David, that you all invite people to the program that are quite professional clients. Now the difference between the Revenue Authority to me and the Board of Indian Revenue is a statute. And not only that, the consequence that would shape people who don't pay taxes. Now all the people employed in the border and revenue falls under the Public Service Commission. You don't need those type of employees because. Well, all right, let me, let me put it this way. The minister save employment whether it be 300 or 400, but then he let go almost 10,000 which is a catch 22. My thing is you have a lot of escapists. Doctors, lawyers, owners of certain businesses unregistered, not in the tax bracket. The Revenue Authority would have had agents ensuring that those people come into the circle and then shape consequence. Prior you had people would make arrangement. There was a gentleman that was found with 900,000 in his account. You have to prevent those things with law. So the UNC stopped it and do have a proper explanation using the Board of Inland Revenue model, which is an archaic model that don't bring the returns that we need. And that's the problem. I'm the problem. [00:21:38] Speaker B: Thank you very much, rolly jr. I think I understand that now that that archaic situation. One question is coming. Was the TTRA going to have a permanent secretary to hold the administration accountable? That's a good question. Let me hear what Arima Banker has to say. [00:21:57] Speaker F: What's stopping the government from digitizing BIR or providing the information infrastructure to bir? Why do we have to change the organization in order to get the efficiency? If it is that the BIR is failing to collect certain taxes, what about putting people in the VIR and giving them the responsibility to pursue and follow up and collect those taxes and go after people who are not paying the taxes that are due? Why do we need a Revenue Authority to do that? Can't the BIR that if we properly equip them? Marie, what your guest is saying makes no sense whatsoever. Having two different bodies collaborating to do almost the same thing. That is added burden on the taxpayers. [00:22:40] Speaker B: So that, and that's what I was wondering, you know Andrea, if there was any fact to the, to the statement about the BIR and the TTRA running parallel to each other. If they were going to be different in terms of responsibilities, that is the part that I think we're not clear on. [00:22:59] Speaker C: Well, yeah, well, as Rowley Jr. Said it, right. A lot of people were going to go home, right? You were still going to have the bir, but the BIR was going to be put in into the ttre. So that's why it was now going to be known as the Revenue, Trinidad and Tobago Revenue Authority. So that's what I meant, that the BIR was going to go into the Revenue. [00:23:26] Speaker B: Okay. [00:23:27] Speaker E: Okay. [00:23:28] Speaker C: And what Rowley Jr. Said is that people would have gone home and that is what the PSA went to the courts for. That's what I explained. I don't know if the listener heard that. That's why the PSA went to the courts because people were going to go home. Because if you put the BIR together with the TTARI means that you're going to have an overlap and workers were going to be doing the same thing because obviously they would have brought in people to help well try to blossom the Revenue Authority. All right. [00:24:11] Speaker B: Thank you very much, Andrea, and for being with us this morning in part one of I and the Economy. I do look forward to chatting with you again next week as we continue our discussions and paying attention to what is happening in Trinidad and Tobago. Thank you very much. [00:24:25] Speaker C: Thank you. [00:24:26] Speaker B: All right, have a good one. Andre Perez Sobers, senior business reporter here at CNC3. [00:24:34] Speaker A: The best insight, instant feedback, accountability, the all new Talk Radio Freedom 106.5.