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  • 3 months ago
Former Permanent Secretary and Finance Minister Vishnu Dhanpaul is warning that the 2025 UNC Budget is built on shaky foundations — and could collapse early in the new year.

He accuses the government of inflating oil and gas projections to justify withdrawals from the Heritage and Stabilization Fund.

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00:00Former Finance Minister Vishnu Dhanbal says the UNC budget will collapse early in the new year,
00:07describing it as fundamentally unsound.
00:10This budget will be derailed early in the new year, in the new calendar year, or before.
00:17It will collapse and will need to be recalibrated within the first quarter of the new calendar year.
00:23And this is nothing new. Several budgets have had to be recalibrated, one day the UNC and the PNL.
00:33Dan Paul, who served briefly as minister before the election, says the budget starts off with a flawed foundation
00:39based on an oil price of $73.25 per barrel of oil and $4.25 per MMPTU for gas.
00:49In the case of the barrel of oil, it's a full $20 above the current global projections.
00:56A $20 reduction in the projection could have a significant hit on total revenue.
01:04Madam Vice President, the oil and gas prices assumptions are unrealistic.
01:11We must remember that we are dealing with two exogenous factors here that we have no control over.
01:17We are price takers. We have no control over the price of oil and the price of gas.
01:24These assumptions on prices are some of the main risks to the budget.
01:29He suggests there's a reason behind these inflated estimates.
01:33There is a method to demand this.
01:35The government's strategy is to use an inflated oil price assumption
01:40to trigger the withdrawal clause of the heritage and civilization.
01:44Dan Paul points out that mandatory expenditure now totals $54 billion annually
01:52or about $4.5 billion every month, leaving the government with little fiscal room.
01:59Are you aware that mandatory expenditure in this country totals $54 billion annually,
02:08an average of about $4.5 billion a month?
02:12So if your budgeted revenue is $55 billion, a little over,
02:18and your monetary expenditure is $54 billion,
02:22you understand, and you have some very unrealistic assumptions
02:26generating revenue to generate revenue,
02:29you understand how precarious the budget is.
02:34He says the deficit will only widen,
02:36especially since several major costs were not fully accounted for.
02:40And this is where the derailment is going to take place.
02:48Back pay for 10 percent, the 10 percent increase in salaries.
02:54The addition to the recurrent expenditure for salary increases,
02:59which now become part of monetary expenditure.
03:01Debt payment, a direct charge on the exchequer,
03:07is underestimated by $5 billion.
03:13Dan Paul also notes that the VAT refund figure is missing,
03:17another sign, he says, of what he calls creative accounting.
03:20And I say this as someone who has worked many years in this arena as a technocrat.
03:24It is clear that expenditure has been underestimated and revenue overstated.
03:31The budget will collapse.
03:34Give the fiscal package as presented.
03:38The budget will collapse.
03:40And this is deeply alarming.
03:43Dan Paul had served as Permanent Secretary in the Finance Ministry
03:45before taking over as Minister under the Stuart Young administration.
03:50Arvishita Mwari, Rupnarein, TV6 News.
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