Home Viewpoint BUDGET REVIEW Govt goals and the Church’s social doctrine - Oct 14
BUDGET REVIEW Govt goals and the Church’s social doctrine - Oct 14 PDF Print E-mail
2012 - Viewpoint
Saturday, 13 October 2012 21:58

This review of the budget will be done looking at three broad issues. Firstly the goals/objectives set; secondly the policies required to achieve them and thirdly the implementation of the policies.

As set out in the Budget statement, the goals are lofty.

“This budget will focus on our public policy agenda for transforming this country with solid platforms for good quality job-creation and for ensuring that the wealth so created is distributed to our national citizenry in a fair and equitable manner”. Who can argue with such goals? The social doctrine of the Church says much the same thing as follows:

the outcome of the entire productive process must extend to all men--to those who are considered "unproductive" as well as to those who are actively employed--by means of a correct system of distribution. …….. since work is the means whereby persons support themselves and their dependents, the wage must take into account both the employee's personal needs and those of his family. (The Principles of the Social Doctrine of the Catholic Church by Javier Hervada)

The objectives to be achieved include:

Stimulating the economy; achieving a balanced budget by 2016; diversification of the economy; crime reduction (reducing violent crimes by 50.0 per cent within the next three years.); developing human capital; reduction of the food import bill by 50.0 per cent or just over $2.0 billion per year by 2015; expanding the health services; developing the quality of life.

And with respect to Tobago the budget statement notes that, “the Government through public-private-partnerships would seek to establish 1,000 new rooms through branded hotels”.

The objectives are laudable but they are essentially unchanged from the budgets of the last five years at least. And this is one of the first problems faced by the new minister. How to generate interest/credibility in a budget which seems like a rehash of many which went before.

In addition, the objectives are generally so vague that there is really no way for us (or for the Minister) to gauge if they are being achieved. Few are “smart objectives” (e.g. reduction in food import bill by 50% by 2015; reduction of violent crime by 50% in the next 3 years) i.e. those specific enough to allow for evaluation.

This is one reason why the budget is silent on the achievements of the previous budget. Another reason is the lack of up-to-date, accurate data in the country generally.

What are the policies outlined in the budget for achieving these goals and objectives?

With respect to stimulating growth, the minister intends to:

Increase the Public Sector Investment Programme; Build Infrastructure through Public-Private Partnerships; Stimulate the Construction Sector; Undertake a Programme of Public Offerings (i.e. selling of some or all shares in publicly held companies e.g. FCB)

Crime reduction “will rely on three distinct strategies viz. strong law enforcement; sustained social interventions, especially for at-risk youth; and strengthening of the criminal justice system.”

Initiatives for Diversifying the Economy will focus on the following sectors:

Financial Services; Tourism; Information and Technology; Gasoline vehicles conversion to CNG; Creative Industries; Maritime; Agriculture; Manufacturing; Energy; Small and Micro-Enterprise and Developing National Sports

Developing Human Capital is to be achieved through:

Access to Higher Education; Skills Training; Expanding Health Services and Restructuring of CEPEP and URP

Developing an improved Quality of Life is to be achieved through:

Maintaining social protection (“we shall undertake a rigorous review of our social welfare programmes with a view to assisting, comprehensively and cost effectively the differently-abled, senior citizens, single mothers, children and all those in need of assistance.”); increased NIS benefits; projects for Housing and Home Ownership; Environment and Water Resources; Transport and The Gaming Industry

These policy initiatives are generally not significantly different from those proposed in the recent past and they are in large measure so vague as to be no guide to the citizens (investors and consumers alike) as to what is really likely to happen.

To be taken seriously, a budget should be a clear guide to government’s intentions. Almost immediately after the statement was read in parliament for example, we began to sense prevarication about the subsidy on premium gasoline vis à vis diesel and super. As one of my colleagues put it, with respect to the budget “Errors are acceptable but being in doubt is not”.

One perhaps significant difference between this budget and those of the recent past is the emphasis on “public-private partnerships”. While there may be considerable agreement on the need for such “partnerships”, the issue arises as to who will be lucky enough to constitute the “private” part, and how will they be selected. This is especially relevant in the light of the fact that the public procurement legislation is yet to be passed and that the “Clause 34” issue has not been resolved to the satisfaction of many.

The implementation of the policy initiatives is problematic from the viewpoint of the public because of the lack of credibility in the governance systems now in place. Will the CEPEP and URP programmes and the housing and agriculture initiatives for example be administered in a “fair and equitable manner” as stated in the Budget? This is what concerns the “man in the street”

Similar questions arise with respect to:

  1. PSIP-State constructing activities (cannot ignore the procurement process);
  2. High income Land development (cannot ignore the challenge of affordable housing);
  3. Offshore/onshore drilling (incentivising exploration and foregoing revenue);
  4. Gas-based industrial processing (subsidised natural gas prices to downstream enterprises);
  5. Real Estate Speculation (possible money laundering activity);
  6. The illegal drug trade (this also has “a multiplier with trickle down income effects”)

Ultimately, the budget will be a success or a failure in so far as it promotes the “common good”. The social doctrine of the Church says in this regard that:

The purpose of public administration is to direct and ordain all activities pertaining to the common good, to promote it, and to choose the best means to attain it. Not only does the common good legitimize public power; it is also the supreme law concerning the exercise of that power.

The Minister must use his Budget presentation to interpret his measures to the populace in terms of the common good or else he runs the risk of having most of the population think of his initiatives for growth and prosperity as an exercise in futility. For, even with commendable goals and objectives, he must somehow demonstrate not only that they are achievable, but will be executed in such a way as to be fair and equitable. – Louis Bertrand

 
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