Wednesday, 12 October 2011

Divvy it up directly among the poor!

 Subsidies are existential: they exist to buffer the weak from the buffeting of economic vicissitudes.

To be effective therefore, subsidies must be progressively applied rather than in across-the-board fashion. So, who have more than enough corn already need crocus bag to store the excess, not more corn; and who have no corn or not enough, need!

Trinidad and Tobago's population presently hovers around 1.32m; and, with the average family unit comprising 5 persons, that means there are 264,000 households in this twin-plus-five island state.

Now, in delivering the 2011-2012 National Budget, the erstwhile Minister of Finance disclosed:

"...in Trinidad and Tobago poverty is estimated at 17 percent of the population with the level rising to 30 percent in some geographic areas..."
(See: Managing Our Social Safety Net, page 23 of the 2011-2012 Budget, at: http://www.finance.gov.tt/content/Budget-Statement-2012.pdf)

In layman terms, what he really meant is:
"...in Trinidad and Tobago, it is estimated that every sixth person you meet, or, a total of 225,000 persons comprising 45,000 households, live in poverty: in other words, they do not even earn enough income to eat..."
(See your calculator for the computation.)

Wherefore then, may anyone in their right mind justify the untouched continuance of the Fuel Subsidy, a subsidy which comes at a cost of TT$4.8b per annum and whose true cost is much higher, given that a quarter or more of the subsidized fuel is siphoned off at will and with impunity?

Wherefore then, too, would anyone in their right mind object to the following suggestion?

If one quarter of the Fuel Subsidy be redirected straight onto the pockets of those 45,000 households (by way of the Ministry of The People and Social Development's Direct Cash Transfer Programme?), then, after allowing for a management fee of 5%, each presently-poor household would get TT$25,300 per annum, or $2,100 per month.
(See your calculator for the computation.)

Subsidies are existential: they exist to buffer the weak from the buffeting of economic vicissitudes.

To be effective therefore, subsidies must be progressively applied rather than in across-the-board fashion. So, who have more than enough corn already need crocus bag to store the excess, not more corn; and who have no corn or not enough, need!

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