Speaking on a Finance Bill Dookeran said that between the months of June to October 2010 "we have, in fact, spent $2.4 billion to deal with contractors’ claims."
He added that there are other claims that have been dealt with in the Ministry of Housing and the Environment as well "and that included a figure of $390 million in June, $377 million in August, $264 million in September and $911 million in October."
Dookeran said one problem in dealing with claims from contractors is the validation process.
"We are taking steps to improve that but that...we have made a dent in that situation and, therefore, hope to remove that over time. Validation becomes an issue that must be dealt with," he said.
The minister said another problem facing the government is refunds of the value added tax (VAT).
"We have, within recent times, increased our payout on VAT refunds from a level of $350 million a month as of now to a level of $400 million a month. I am hoping that the VAT office can increase that to a level of $500 million a month so that we can inject some further purchasing power into the economy," Dookeran said.
Dookeran also touched on the issue of foreign exchange, noting that while the situation continues to be good "we cannot be complacent because the trend is not always in the right direction."
He said there continues to be a shortage and endorsed the Central Bank’s recent initiative to increase its commitment to the foreign exchange market from the current level of US$150 million per month to US$200 million per month.
Dookeran said that measure would add more purchasing power into the system.
The Minister also spoke of the domestic monetary situation, noting that there has been a slight increase in reserves since he last made a public statement on the matter.
Dookeran reminded the House that in June he reported to Parliament a dramatic reduction in the country's cash balances "from $17.7 billion at the end of fiscal year 2008, to $9.7 billion at the end of fiscal year 2009; and further, to $5.43 billion as of June 2010."
He added, "In the budget debate, I further updated this Parliament that the cash balances which stood at $5.4 billion at the end of June had, in fact, reduced further to $4.3 billion as of the end of September.
"Mr. Speaker, it was imperative that we took steps to do two things, not only to change direction of the financial trends that were emerging, but to also set the platform for new trends to begin to emerge; and that is what we have been engaged in for the last six months.
"The current situation is that the Government’s cash balances held at the Central Bank have begun to show a slight increase; now at the level of $5.4 billion," he said.
Dookeran credited the improvement to "the careful husbanding of our financial resources." He said the prudence of the Government’s program has ensured that the inherited problems do not "become the dominant characteristic of our financial landscape".
He said "while we are not out of the woods, I am beginning to see the blue in the sky again."
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