The PNM Government did not tell the truth when it claimed the PP administration left a huge financial overdraft.
Research has found that the overdraft was used in 2015 in light of the fact that government expenditure takes place on an on-going even basis but revenues are derived quarterly.
The government does not usually utilise the overdraft.
But with the fall in oil prices, the overdraft was used to make up for the reduced revenues which had worsened the issues related to timing of inflows.
Informed sources said the government reduced spending but that this was insufficient.
So, the overdraft facility was used.
But even with use of the overdraft, the PP Government had programmed cash flows to have it liquidated at the end of the respective quarter.
The major sources of cash flow were:
· $1.5 billion from the Initial Public Offering (IPO) of the Trinidad and Tobago Natural Gas Liquids ((TTNGL), a subsidiary of National Gas Company (NGC);
· Close to $4 billion from the loan repayment due from the State enterprise, Trinidad Generation Unlimited;
· $500 million as tax/dividends from another State enterprise;
· End-of-year tax payments conservatively estimated at $6 billion were due.
In addition, arrangements were being made for a $1 billion loan to manage any delayed receipts.
The effect was that cash inflows from the seven-week period after September 7 amounted to $13 billion, more than enough to liquidate the $9 billion overdraft and to provide a positive cash balance.
Finance Minister Colm Imbert has made it appear that the PP administration ran up the overdraft to prevent a PNM regime from undertaking its programme of works.
But the PP Government was seeking re-election and would have been similarly affected.
Incidentally, the A rating of Standard and Poors has confirmed the astute management of the economy, the knowledgeable source said.
He also noted that the International Monetary Fund (IMF) recently stated that T&T is not in economic crisis but has “enormous strengths”, including financial buffers and low but rising debt levels.
The Finance Minister in the PP administration was Larry Howai.