Young: Goverment committed to transparency in spending

The content originally appeared on: Trinidad and Tobago Newsday

Energy Minister Stuart Young. – File photo

ENERGY Minister Stuart Young said Government was committed to transparency and responsibility in spending as he contributed to debate on the Finance (Supplementary Appropriation) (Financial Year 2024) Bill in the Senate on Tuesday. He added that Government had been proactive in taking steps to strengthen the energy sector since 2016.

Young was responding to accusations of “renegade” government spending by Opposition Senator Wade Mark earlier in the sitting as the chamber debated a $2.3 billion increase to the 2024 budget.

Mark had said, “We have a revenue crisis in this country where expenditure and revenue are far apart. The minister is admitting that we could find ourselves with this supplementary appropriation being approved, resulting in a $9 billion budget deficit.”

Mark also questioned the allocation of the supplementary budget, claiming almost $2.3 billion was going towards recurrent expenditure while only about $4 million was directed towards the capital programme.

In response, Young pointed to Government’s efforts in securing energy-sector revenue, in particular, the government’s decision to move away from “outdated contracts,” which adhered to the Henry Hub index for gas prices. He said the government had established its own pricing formulas to break free from colonial-era constraints.

Young countered Mark’s concerns about economic instability by referencing a recent International Monetary Fund (IMF) Article IV consultation. He said the IMF praised TT for its sustained economic recovery, sharp decline in inflation and strong external position.

Young addressed the government’s approach to managing the fuel subsidy, which is projected to cost over $1 billion this year. He said government must balance spending on subsidies with other essential services like education and health care.

The additional $570 million requested was for maintaining this subsidy, illustrating the government’s commitment to alleviating fuel costs for citizens.

He denied claims about the benefits of reopening the Petrotrin refinery and provided “historical data” on fuel subsidy expenditures. Young said significant amounts were spent on subsidies even when the refinery was in operation.

“In 2014, the subsidy cost was $7.2 billion, which could have funded multiple government budgets.”

Young denounced the personalisation of attacks on the Chief Medical Officer and emphasised that decisions on drug importation are made by a body of experts, not individuals.

He compared the government’s “commitment” to transparency and responsible governance with the UNC administrations, when, he said, large sums of money went unaccounted-for.

Young said the government has been successful in maintaining public-sector debt below targets and supporting economic recovery without resorting to IMF programmes.

Young discussed the positive economic indicators noted by the IMF, including expanding private sector credit and a sound financial sector. He said the government is working “diligently to manage resources effectively and foster economic growth.”

Young questioned the necessity of spending billions on the fuel subsidy, saying even when the refinery was operational, significant amounts were allocated to it.

“In 2013 and 2019, the fuel subsidy costs were $1.9 billion, with further fluctuations in subsequent years, including $1.6 billion in 2022 and $1.8 billion in 2023.”

He said the allocations demonstrated the refinery’s operation did not eliminate the need for a subsidy and buying nearly 100,000 barrels of oil daily required substantial foreign exchange, denying arguments that the refinery was a net forex earner. He said declining domestic oil production from 144,000 barrels per day in 2005 to 98,000.

Young defended the government’s decision to secure future gas supplies from Venezuela.

Despite criticism, he said, the government has been successful in the oil sector, including obtaining a 30-year exploration licence for the Dragon gas field. He criticised the opposition’s attacks on the government’s initiatives to secure energy resources, citing the opposition’s letter to the US vice president asking for sanctions on the government.