Government will pay a salary relief grant of up to $1,500 to all persons who are temporarily unemployed or displaced on account of the COVID-19 pandemic.
The Government will also pay all those persons who are owed income tax refunds of $20,000 or less by next week. It will pay VAT refunds to those who are owed $250,000 or less and it is aiming to extend the payments to cover those owed up to $500,000.
The Prime Minister said this was not Christmas Eve and there was “no Santa Claus here.” But Finance Minister Colm Imbert unveiled a $2b package to alleviate the hardship created by the pandemic.
Imbert said the salary relief grant will cost the Government $400 million over the next three months and would be administered through NIB “in the first instance” because it has a PAYE database. But, he said, the grant would be open to persons outside of this database, such as domestic workers and other employees who are not on the NIS database.
“We recognise that because of the measures being taken and because of the issues associated with this pandemic that there will be persons who will be unemployed....People would be going through hardship and as a government, we had to do this,” he said. He cited persons in the beverage sector, food, entertainment, hospitality sectors as persons whose jobs have been directly affected. He said the details and the qualification criteria would be worked out in the next seven days. Speaking at yesterday’s news conference at the Diplomatic Centre, St Ann’s, Imbert noted that 75 per cent of those owed income tax refunds were persons owed $20,000 and less, while 90 per cent of enterprises owed VAT refunds were owed $500,000 or less.
He said Government had to plug a hole of $6 billion to $7 billion in terms of budgetary financing for its original budget, which would be created by the anticipated decline in revenues. He said in addition of this the social programmes which were outlined yesterday would cost $1 billion and the trade payables another $1 billion. Government has also pledged $3 billion in bond to pay arrears, Imbert said the total amount of VAT refunds owed however was $6.225 billion.
Relief for mortgagors and renters
Imbert said Trinidad and Tobago Mortgage Finance (TTMF) and Home Mortgage Bank (HMB) are putting in place payment deferrals for mortgage payments of up to three months in the first instance and “depending on how this thing goes, they may take it up to six months”. Imbert said he also spoke to the Housing Development Corporation (HDC) chairman and in the first instance the corporation is looking at deferrals on payments on mortgages and rental payments for HDC customers for two months (March and April)” and then as the situation evolves “they will see whether they need to extend it”.
“These (benefits) are for people who need it, in both cases, TTMF and HMD. I encourage anyone who has the wherewithal to be current with these loan payments, if you can pay I suggest that you pay,” he said.
Imbert said Government was also injecting $100 million to be administered by credit unions to support their membership. This money is for loan financing which will allow credit union members to access funds on favourable interest rates. He said credit unions have over 100,000 members and they can benefit from this liquidity support programme if they find themselves in difficulty. He said Government expected the credit unions to advance the loans to their members and then come to the Government at regular intervals “perhaps at the end of every month” for reimbursements. He added that the interest rates would be favourable for these loans and persons who have some time to pay them back “once the situation normalises perhaps within an 18 month period”.
$50m for Tobago hotels ► sub head ◄
With respect to the commercial banks, Imbert said there was a reduction in the prime lending rates by two per cent and most commercial banks had a rate now of seven and half, “which should ease up quite a few businesses”.
On the ‘skip a payment’ initiatives, he said the banks stepped up to the plate and have published advertisements indicating that they have instituted deferral payment periods of up to six months. Some banks are three months, some are six, but the lowest period is three months, he noted. He said the banks had also agreed to waive penalty payments on overdraft facilities, as well as reduced interest rates on credit cards and were looking at other arrangements with respect to credit card users.
He also announced a $50 million grant facility for Tobago hoteliers to upgrade their hotel rooms. He said another facility that the THA administers— an Enterprise Development Facility which had an allocation of $1 million in the budget— will receive an increase in its allocation by $5 million. The THA will give grants of $5,000 to people involved in the tourism sector under this programme.
On where Government was getting the money for all those programmes, Imbert said Government would be using a “mix of approaches, tapping into all sources” of financing to find the programme. He said Government had four sources of income - Heritage and Stabilisation Fund, assistance from multilateral institutions (Andean Development Bank, IDB, World Bank and IMF). He said the Andean Development Bank had offered Government substantial sums of money with very few conditions. He said the third source of funding was loan financing on the international market (Morgan Stanley, Credit Suisse, JPMorgan, etc) and the fourth source, US dollar and TT dollars available in the local banking system.