Where did T&T’s money go? | Local company

THE TITLE of today’s comment, or derivatives thereof, has been used for years by those who oppose the ruling party to suggest that the current administration is corrupt or mismanages the economy.

In the seven years since the election of the People’s National Movement (PNM) on September 7, 2015, opposition leader Kamla Persad-Bissessar and her colleagues have repeatedly raised the question of the government at conferences in press or political meetings.

During the previous five years and four months, that is from May 2010 to September 2015, which was the period of running the People’s Partnership led by Ms Persad-Bissessar, Dr Rowley, then Leader of the Opposition , asked the question of the administration a number of times.

Interestingly, the question is now routinely asked in non-political situations.

According to a Google search using the search words “Where the money went Trinidad”, the Trinidad Guardian used the headline “Harry, where the money went”, July 5, 2011, above an article in which three Hindu Credit Union shareholders were asking the Commission of Inquiry into the collapse of CL Financial and HCU what had happened to their funds.

And the title “HDC tenants in Camille: where did the money go?” was used in the Trinidad Express as recently as July 30, 2022, to reflect requests from tenants of houses built by the Housing Development Corporation regarding the use of their maintenance fee payment.

While not neglecting the leakage of public money due to corruption and mismanagement, all politicians who ask the question “Where did the money go?” of their opponents KNOW where public money has been and is being spent.

Politicians KNOW that of every dollar the government spends on T&T, more than $0.50 is spent on a spending category called transfers and subsidies (T&S).

For example, over the period October 2015 to August 2022, total spending for the current administration, led by Prime Minister Dr. Keith Rowley, was $368.34 billion ( see table 1). This information comes from Annex 22 of the Review of the Economy 2021 and from the presentation of one of the permanent secretaries of the Ministry of Finance, Suzette Taylor Lee-Chee, during the Spotlight on the Economy 2022 on September 2, 2022. The 2022 expenditure number is a provisional estimate.

The total amount of money spent on transfers and subsidies over the seven fiscal years from 2016 to 2022 is $188.41 billion (see Table 2). This means that 51.15% of the $368.34 billion spent by the current administration over the past seven years has been allocated to transfers and subsidies.

Very helpfully, Ms. Tayloy Lee-Chee provides a breakdown of the Department of Finance’s expectations for how the $29.85 billion allocated for transfers and grants will be spent in the current fiscal year 2022.

Of the $29.85 billion, it is estimated that $10.52 billion will go directly to households, $3.70 billion will go to state enterprises, $5.89 billion to statutory boards and similar bodies, and 7 $.74 billion to other transfers.

Therefore, if total expenditures in 2022 are $55.18 billion and direct transfers to households are $10.52 billion, this means that households will receive approximately 19% of total government expenditures. government in 2022.

So if the question “Where did the money go” ever comes up in a discussion, the correct answer is that more than half goes in the form of transfers and grants and 19% is transferred directly to households. The amounts allocated directly to households vary very little as a percentage of total expenditure. And the structure of transfer and subsidy spending has changed very little between the government and the opposition over the past 20 years.

But there are other indirect ways in which T&T households benefit from government spending.

In his presentation at Spotlight on the Economy, Finance Minister Imbert estimated that the government will spend $2.64 billion to subsidize the cost of fuel in the current fiscal year 2022.

A portion of that $2.64 billion ensures that T&T households do NOT pay the full economic cost of fuel, in a year in which the world price of crude oil, from which T&T fuels are manufactured, exceeded $120 a barrel.

Part of the $2.64 billion fuel subsidy also ensures that taxis, maxi taxis and trucks do not pay the full cost of fuel used to transport people and goods across the country.

Mr. Imbert also revealed that the government spends more than $2 billion a year to subsidize the Water and Sewerage Authority and another $700 million to subsidize the Trinidad and Tobago Electricity Commission. Of that $2.7 billion spent on subsidizing water and electricity generation, I suspect a significant percentage benefits households.

If only half of the fuel subsidy and the electricity and water subsidy were attributable to households, it would add another $2.67 billion in indirect government subsidies to households.

It would be very interesting if the Ministry of Finance provided a full estimate in the 2023 budget of how government spending directly and indirectly benefits households in this country.

If the ministry were to do this, there would be absolutely no doubt about “Where did the money go”.

Table 1

Fiscal Year Total Expenditure

2016 $52,944.7

2017 $49,712.0

2018 $48,866.5

2019 $59,777.5

2020 $51,058.9

2021 $50,794.2

2022 $55,189.4

Total $368,343.2 million

Table 2

Exercise T&S

2016 $26,611.9

2017 $26030.1

2018 $25,391.1

2019 $26,377.7

2020 $26,909.6

2021 $27,245.9

2022 $29,822.3

Total $188,417.6 million