Colm Imbert___use-new

Minister of Finance Colm Imbert

THE Government expects to spend $107 million on Covid-19 vaccines to allow vaccination of 85 per cent of the population, or about 1.2 million people.

So said Minister of Finance Colm Imbert yesterday, at the Red House, Port of Spain.

He also defended the Government’s decision to increase expenditure for fiscal 2021 by $2.9 billion.

He said the Government needs the additional funds to address inescapable obligations.

Therefore, the supplemen­tation of appropriation was “necessary” and “not frivolous”, he said.

Piloting the motion to adopt the Report of the Standing Finance Committee on the consideration for proposals for the variation and supplementation for the fiscal year 2021, Imbert said:

“We are of the view that these supplementations are inescapable. We need to do these supplementations to ensure that salaries and wages are paid on time, that essential goods and services are provi­ded, particularly in the health sector, which is our number one priority.”

He said there was a supplementation of $267 million for the Ministry of Health.

However, he pointed out that this ministry was also assisted by way of loans for the procurement of pharmaceuticals by the National Insurance Property Development Company (Nipdec) with a Government guarantee.

He said contained within the $267 million supplementation was also a significant sum for ambulance services since arrears were owed to the ambulance provider because there were additional trips by ambulances.

Imbert said there was also supplementary funding for the regional health authorities which were on the front line of the Covid-19 battle.

He said any time the Ministry of Health requests funding, for example, for vaccine purchases, the Ministry of Finance has complied, even using its own allocation to ensure that payments are made on time.

Imbert said: “So far, the Ministry of Finance has made arrangements or has already spent (US)$10.3 million ($70.2 million) on the procurement of vaccines. And the balance to be paid with the current arrangements for the procurement of vaccines is US$5.4 million.

“If you add that all up, we expect that we would spend, at the end of the day, approximately US$15.7 million on the acquisition of vaccines ($107 million).... That would allow vaccination of 85 per cent of the population, or approximately 1.2 million people.

“We have already paid for a significant quantity of vaccines and we have made the necessary downpayment for the vaccines to come, especially those that are coming from African Vaccine Trust.... At 85 per cent of the population, we will be able to achieve over time the objective of the Ministry of Health of herd immunity.”

Imbert said there was a block allocation of $250 million for various forms of Covid relief.

He said some was used for salary relief grants (SRGs) and some had been appropriated to the Ministry of Social Development for income support, and some would be allocated towards additional food cards.

He said as of June 4, there were 19,030 applications for SRGs and 10,937 applications in progress.

“So we are looking at 30,000 applications,” he said, adding that 35,000 people indicated an intention to apply for the grant.

Overall revenue shortfall

of $2.5 billion

Imbert said the Govern­ment had asked for the sup­ple­­mentation against the backdrop of the performance of the economy for the period October 1, 2020, to May-June 2021.

Saying that oil companies had been “profoundly affected by Covid-19”, Imbert said the major producer of natural gas—BP—had significant problems with the delivery of infrastructure platforms to the country to maintain the supply of gas.

He said BP had contracted Mexico, which had been under prolonged lockdown, and a number of items had not arrived in T&T as a consequence.

He said there had been a reduction in terms of taxes on income and profits from oil companies, other corporations, withholding tax and business levy, which were all affected by the situation in the energy sector of some $500 million.

He said in terms of royalties, there had been a significant shortfall.

Government had anticipated that by the end of April, it would have received $2.9 billion in royal­ties on oil and gas, but the actual receipts were $1.1 billion, a shortfall of $800 million.

In terms of extraordinary revenue from the oil and gas sector, there was a shortfall of $230 million because the price of gas and production were suppressed.

“All in all, in terms of income from royalties and income from extraordinary revenue, our oil and gas companies were short by $1 billion. So that the fiscal out-turn up to April, there has been a shortfall of approximately $2.5 billion,” he said.

He said the average price from October 2020 to April 2021 of local crude was US$52.76, which was above the budget figure of US$45 a barrel.

Average oil production for the period October 2020 to May 2021 was 57,889 barrels a day, which was a little beyond the projected production in October 2020.

He said with respect to gas production, it was in the range of 2.6 billion standard cubic feet per day (scf/d), rising to three billion scf/d and dropping to 2.77 billion scf/d in March, to 2.56 billion scf/d in April and 2.5 billion scf/d in May.

He said the budget figure was of the order of 3.2 billion scf/d and “therefore, we the country, that is, are somewhat below that”.

He said with respect to the netback price of gas, it varied from US$2.34 in October 2020, rising to US$3 in April in 2021.

He said the Henry Hub price for the last couple days has been above US$3.

“But on average, the netback price of gas has been lower than estimated in the budget,” he said.

Imbert said the lower production of natural gas had affected Government’s revenues significantly.

“We expected income (taxes on income and profits) from oil companies to be in the vicinity of $1.3 billion, and it is in fact $900 million.”

Imbert said the Government expected income from other companies of $3.1 billion and received $3 billion.

With respect to income from taxation of individuals, the Government had projec­ted it would receive $3.5 billion, and it received $3.48 billion.

At the start of his contribution, Imbert said he had checked with the Budget Divi­sion to ensure that questions emanating from Opposition members at the Standing Finance Committee meeting on Monday would have been delivered to the Parliament by 1.30 p.m. yesterday or before.

He said he was advised that a very unfortunate incident in the Budget Division, a medical emergency, caused difficulties and the Budget Division was unable to prepare the documents within the required time.

“It was a medical emergency. These things are not planned,” he said.

He said however as he made his way to the podium, one of the attendants handed him the document with the responses.

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