The Employers’ Consultative Association of TT (ECA) said it acknowledges government’s modest attempts to rebalance the economy while attempting to address some long-standing issues, especially in the context of continued geopolitical tensions that are affecting commodity prices, fuelling inflation globally and threatening the recovery efforts of many economies.
In a release, the ECA said some of the aspects of the budget it liked included the projected budget deficit of $1.51 billion, the lowest deficit since 2015; the efforts to improve the ease of doing business and improving the business environment, especially the SME mentorship programme; the grant fund facility administered by ExporTT; the export booster initiative; the adjustment to the VAT registration threshold; the long-term loan guarantee scheme for SMEs; digitalisation of government services; and incentives for greater use of renewable energy in various sectors, including agriculture.
“Even as we acknowledge the importance of oil and gas to our economy, economic diversification and the creation of diversified, sustainable revenue streams is equally important if we are to improve our resilience against future commodity market shocks. In this regard, we commend the ongoing support to promote the development of the nonenergy sector, such as the manufacturing tax credit (up to a maximum $50,000) for companies investing in new machinery, production lines and equipment, and the establishment of the TT Trade and Investment Promotion Agency (TTTIPA).”
It commended the government for improving access to education through adjusting criteria for accessing GATE, as it said human-capital development is essential. It welcomed the promotion of apprenticeships through the School-to-Work Apprenticeship Allowance for businesses.
The ECA said the increase in personal tax allowance from $7,000 to $7,500 will have a direct benefit on low-income earners, who will stand to be most affected by the rising cost of living owing to inflation, fuel-price adjustments and the loss of income and jobs that many experienced during the past two years.
The organisation said it was concerned about several announcements in the budget, the most immediate of which was the unavoidable hike in fuel prices.
“This will undoubtedly have a negative impact on the population, especially given that this is the second increase in 2022, coming out of a difficult pandemic period for many.
"While we understand the high cost of subsidising fuel, we must also be cognisant of the social cost when fuel prices increase." It said access to transport was a necessity and people "will need to make further sacrifices, some with already limited resources, to absorb the cost of this increase.”
The ECA said the protracted nature of ongoing public-sector negotiations is a continued area of concern.
It also said it was concerned over the continued escalation of serious and violent crimes that continue to plague both businesses and citizens.
“There is immense fear among the business community of operating beyond certain hours, which ultimately translates into a loss of taxable revenue for the State.
"It is also not useful to develop a national tourism product if safety and security is not assured.”
It said the efficiency of the VAT refund system remains unresolved, while the modernisation of labour legislation and labour market policies seems to remain on the backburner.
The ECA said there continues to be a fundamental disconnect between the education curriculum, the skills that employers and the future of business require, and the development objectives of the Government.
It said it looked forward to much more detail on specific allocations, programmes and initiatives as the budget debate ensues and supporting documents are released.