RECENTLY appointed Finance Minister Visnu Dhanpaul says he will not stop questioning the feasibility of the UNC's promises of massive wage hikes for public servants if it takes office on April 28.
Dhanpaul delivered his maiden political platform address at a community meeting in Westmooring hosted by Diego Martin West candidate Hans Des Vignes. Trade Minister Paula Gopee-Scoon and Minister of National Security Marvin Gonzales also addressed the constituents and defended the government's track record since 2015.
Dhanpaul, sworn into office on March 15, also questioned the opposition’s “strange obsession with (currency) devaluation.”
Dhanpaul warned that starting public service salary negotiations with “militant trade unions” at ten per cent, as the UNC has proffered, could escalate to far higher figures, resulting in back-pay obligations of at least $12 billion.
“This is just one side of the equation,” Dhanpaul said. “On the other side, they propose revenue-reducing measures like cutting corporation tax and interfering with the value-added tax base.
“These are all revenue-reducing measures combined with expenditure-increasing promises. In your own personal life, when your expenses increase and your income decreases, what happens? That’s what they’re proposing for the country.”
He further criticised the UNC for opposing the TT Revenue Authority (TTRA), which his ministry projected would generate at least $5 billion in tax revenue, and for promising to eliminate property taxes.
“Introducing all these revenue-reducing measures in the face of massive expenditure increases drives the fiscal deficit close to $20 billion,” Dhanpaul said. “All I asked last week was, how are you going to finance this? That’s all I asked.”
He said he was attacked for asking such questions.
He warned that such a deficit would leave no fiscal space and force the government to borrow heavily, risking a downgrade by credit rating agencies to “beyond junk status.” He also raised concerns about the UNC’s silence on the Heritage and Stabilisation Fund, speculating whether it might be used to plug the deficit.
“Why have they remained so silent on the Heritage and Stabilisation Fund? Is there a plan to decimate it to finance this $20 billion deficit? That’s for you to think about,” he said.
Dhanpaul cautioned that an unsustainable deficit would exert inflationary pressures, prompting monetary tightening and worsening the balance of payments.
“There’s only one institution left to turn to, and that’s the International Monetary Fund (IMF),” he said. “The effect? You get your ten per cent increase initially, but six months later, you’re looking for a job because the IMF restructures the public service, cutting salaries and jobs.”
Drawing from his experience during an IMF programme in the early 1990s, Dhanpaul recounted how public service salaries were cut by ten per cent under the National Alliance for Reconstruction government.
“I lived through the financial crisis, the IMF programme, and I can tell you what will go wrong,”
