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  • 6 months ago
Economist Dr. Dave Seerattan says all borrowing is not bad, he says given the current State of the country's economy, borrowing is a credible option.

However he believes the real question is, how big is the debt ?

More from TV6's Nicole M Romany.
Transcript
00:00Prime Minister Kamala Passat-Bissasa told media last week the projected deficit for 2025 is $11 billion.
00:09Today, Dr. Dave Siratan tells the TV6 Morning Edition countries borrow all the time to manage their cash flow.
00:17He says while there are various steps that can be taken, there is a much bigger problem.
00:23You have a mix of options here that they have decided to go with.
00:30There are, of course, longer-term solutions to the whole issue of the fiscal challenge that we face, of course.
00:38You could only fundament a lot of these policies that were talked about in the aftermath of the cabinet meeting,
00:47the press or the Prime Minister had.
00:50It's basically short-term measures.
00:52They do not solve the fundamental structural issue that we have.
00:57Dr. Siratan says the country is in disequilibrium due to the shake-up in the international energy market,
01:06noting that revenue earned from that sector has significantly decreased by 50% or more since 2014.
01:13So we have a fundamental disequilibrium, and one of the ways you could fix it is if all of a sudden the energy sector was up and running,
01:21as it were in those holicom days, when oil was $147 a barrel, I think, in 1945 and so on.
01:28But most people don't think that is going to happen anytime soon.
01:32So you have this fundamental disequilibrium.
01:35He explains that while the country may not need a revenue authority,
01:48there is need for a major restructuring of the entire tax collection system at Borden Inland Revenue.
01:54The focus of the people in the tax authority will be to go out and order people who should be in the tax base
02:02but are not for a number of reasons, a big one of them being that we do not have the reach
02:09to kind of make sure that people who should be paying taxes are paying taxes.
02:14Additionally, Dr. Siritan tells us, one of the major fears people expressed over the former government's property tax regime
02:22was the potential to lose their property.
02:26He says it is part of our culture in this country to own land.
02:30He explains that there are many citizens who are property rich and income poor,
02:35preferring to elderly people and retirees.
02:38We need to increase the amount of money we collect from property taxes,
02:41but we need to re-look at the regime that was being put in place
02:47because there are some equity issues involved in there that I don't think we adequately resolve.
02:55Nicole M. Romany, TV6 News.
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