Dookeran defends deficit financing
By Anna Ramdass anna.ramdass@trinidadexpress.com
Story Created: Oct 22, 2011 at 10:54 PM ECT
(Story Updated: Oct 22, 2011 at 10:54 PM ECT )
The 2011/2012 national budget was passed in the Senate on Friday night as acting Prime Minister Winston Dookeran claimed that Government saved the people of the country from tremendous pain through its decision to adopt deficit financing.
The budget was passed in the House of Representatives on Tuesday.
In wrapping up the third day of debate in the Upper House, Dookeran reiterated that the budgeted expenditure was $54.6 billion, projected revenue $47 billion and a deficit of $7.6 billion.
During the debate both Opposition and Independent Senators had raised concern is over deficit financing.
Dookeran said this measure was necessary and he stressed that the Government had a plan in place to ensure the economy did not collapse.
"Deficit financing is necessary at certain times and at this time we could not recoil into our revenue base and contract the economy further, we had to expand into a new level of expenditure so the economy's prospect of growth will remain alive, simple as that," he said.
"And we could afford to do it because our fiscal space was maintained and the two yardsticks that I've used to do that was one, the level of our deficit as a percentage of our gross domestic product and the upper limit to which central Government debt must be maintained," he added.
Dookeran said if Government did not turn to deficit financing there would have been cuts in expenditure such as social programmes.
"If you do not wish to have deficit financing you would have had to cut your expenditure...we must maintain that level of support because we do not believe that we must inflict the pain as was implied by the members opposite on to the working people of our country," he said.
Dookeran pointed out that world events such as the killing of former Lybian leader Moammar Gadaffi would have an impact on the economy.
"Even what is happening today in a Libya is a geo-political phenomenon, the impact of that we are still to try and ascertain and therefore as we approve this statement in this House we are already subject to some new geopolitical considerations," he said.
Dookeran also spoke to some revenue generating measures such as the establishment of an international ship building facility. He said Government is looking at Chaguaramas and Waterloo areas for this initiative.
He said it's anticipated that this project would be a private sector assisted initiative as well.
Government is also looking at establishing a renewable energy research centre he said, adding that it would be set up at the University of the West Indies. He said this is a brainchild of the former PNM Government and currently the MOU is being worked out by the Energy Ministry and the department of Energy in the US.
Dookeran said that consideration is also being given to a new integration of regional mineral economies such as those of Belize, Suriname, Jamaica and Guyana.
By Anna Ramdass anna.ramdass@trinidadexpress.com
Story Created: Oct 22, 2011 at 10:54 PM ECT
(Story Updated: Oct 22, 2011 at 10:54 PM ECT )
The 2011/2012 national budget was passed in the Senate on Friday night as acting Prime Minister Winston Dookeran claimed that Government saved the people of the country from tremendous pain through its decision to adopt deficit financing.
The budget was passed in the House of Representatives on Tuesday.
In wrapping up the third day of debate in the Upper House, Dookeran reiterated that the budgeted expenditure was $54.6 billion, projected revenue $47 billion and a deficit of $7.6 billion.
During the debate both Opposition and Independent Senators had raised concern is over deficit financing.
Dookeran said this measure was necessary and he stressed that the Government had a plan in place to ensure the economy did not collapse.
"Deficit financing is necessary at certain times and at this time we could not recoil into our revenue base and contract the economy further, we had to expand into a new level of expenditure so the economy's prospect of growth will remain alive, simple as that," he said.
"And we could afford to do it because our fiscal space was maintained and the two yardsticks that I've used to do that was one, the level of our deficit as a percentage of our gross domestic product and the upper limit to which central Government debt must be maintained," he added.
Dookeran said if Government did not turn to deficit financing there would have been cuts in expenditure such as social programmes.
"If you do not wish to have deficit financing you would have had to cut your expenditure...we must maintain that level of support because we do not believe that we must inflict the pain as was implied by the members opposite on to the working people of our country," he said.
Dookeran pointed out that world events such as the killing of former Lybian leader Moammar Gadaffi would have an impact on the economy.
"Even what is happening today in a Libya is a geo-political phenomenon, the impact of that we are still to try and ascertain and therefore as we approve this statement in this House we are already subject to some new geopolitical considerations," he said.
Dookeran also spoke to some revenue generating measures such as the establishment of an international ship building facility. He said Government is looking at Chaguaramas and Waterloo areas for this initiative.
He said it's anticipated that this project would be a private sector assisted initiative as well.
Government is also looking at establishing a renewable energy research centre he said, adding that it would be set up at the University of the West Indies. He said this is a brainchild of the former PNM Government and currently the MOU is being worked out by the Energy Ministry and the department of Energy in the US.
Dookeran said that consideration is also being given to a new integration of regional mineral economies such as those of Belize, Suriname, Jamaica and Guyana.