The Budget Process

In beginning my contribution to the budget debate, I recognize that we in the Bahamas are very fortunate to live in a democratic society. Sometimes I believe that we take this for granted.

Over the years many great Bahamian men and women have worked tirelessly and sacrificed greatly so that we today can enjoy a system where every man and woman over the age of eighteen regardless of station, may exercise the right to elect members of Parliament who will represent their views and interests and be their voices on the national stage.

An example of the furtherance of this democracy is the budget debate, the most important debate on the legislative calendar. This particular budget debate is one of the most important in many years as we are facing an economic crisis not seen before in the modern Bahamas.
Job losses, the rising cost of living, mortgage foreclosures and the loss of homes and business failures are everyday realities. The way that we, as a nation respond to these realities will determine how and how quickly and how whole we will be when we emerge from this crisis.

The livelihood of every Bahamian, those living and those unborn depends on how we confront this economic crisis.

This exercise of debating the budget goes to the very origin of parliamentary government. The first parliaments were convened to give the sovereign the authority to raise money, through taxation, mainly for the purpose of fighting wars. It was in the year 1362 that the idea that the sovereign required the consent of the people to tax their land and goods became formalized in statute. Taxation and representation became linked.

Over the hundreds of years since then, the Westminster System, which we have inherited, has evolved to a complete legislative assembly. The role of Parliament is to raise revenue and to pass laws for the peace order and good governance of the nation.

The budget remains the most important debate in the legislative calendar.

In this system, the people elect the Parliament; the Parliament, through its elected members selects the Prime Minister who appoints the government (Cabinet).

Through the budget process, the government is seeking permission to raise money, through taxes and to allocate and spend that money.

The Cabinet (Government), by coming to Parliament, is seeking the permission of the Parliament which represents the people. Therefore this exercise amounts to government of The Bahamas seeking the permission of the people, through the Parliament, to raise the revenue and to spend the money in the ways set out.

This is not an instance of the Government telling the people what they intend to do. The Government must seek the permission of the people. The Parliament represents the people.

In seeking this permission, the government must be open and forthright; they must put all of the information in the public domain so that the people may make informed decisions. Information must also be presented in the proper context. It is through having access to all of the information that the people are put in a position to either give or withhold their approval, through their representatives.

The people expect a vigorous and incisive debate. They do not expect that whatever is presented by the government be accepted without question. They expect that, when questioned, the government should happily provide information and answer questions.

This is not a back-patting session. This is not a love fest. No one should not get mad and slam the mike down and suck their teeth because they are asked to account. This is the people’s money! There will be criticism and alternative positions will be advanced. This is no place for thin skin.

I say these things to put this budget exercise in context and to assure the government side that the vigorous debate and the robust questioning that will come during the committee stage of the debate is purely in the interest of the public.

Duty of the Government to present the True picture of the state of the economy
In preparing the budget, the government is called upon to use the information before it, historical experience and forecasts of economic performance, to derive estimates for the amount of revenue that will be collected. Because they are estimates, variations from forecasts may be expected. This has always been the case. It was revealing to hear the Minister of Finance admit as much; as previously he had scorched the PLP administrations for not coming in with the exact amount of revenue projections in the past.

When preparing and presenting these projections the government is called upon to be realistic and even conservative. Over estimating revenue leaves the government in a position where if you are basing your spending on your revenue, and most of the government’s spending is fixed, overestimation of revenue leaves the budget in a deficit position.

Over the past two budgets we have witnessed instances of what we believed at the time to be overly optimistic revenue estimates. For example in the 2007/2008 budget the government estimated revenues from stamp tax on imports of $199million. Previous amounts collected in this category were $111million in 2004/2005, $134million in 2005/2006 and $143million in 2006/2007. Yet the government estimates a $50million increase in this category for 2007/2008. This represented a forecasted increase of 40% over the previous year’s collection.

In contrast, in the same year, customs duties were estimated to increase by 5%; from $576million to $605million- $29million. How is it that you can forecast only a 5% increase in customs duties but a 40% increase in the stamp tax on the very same imports?

This was totally unrealistic and we said so at the time. According to the figures for provisional revenue, the actual amount collected was $149 million and not $199million; a full $50million short. And the amount collected ($149million in 07/08) was 4.6% more than the previous year ($143million in 06/07).

In the last budge 2008/2009, in the face of a slowing economy, the government projected that international trade taxes, i.e. customs duties and excise taxes, would increase by $69million over the amount collected in 2007/2008. They forecast an increase from $693 million to $762million. This is a ten percent increase. The number for 2007/2008 is the sum of customs duties and stamp tax on imports; the number for 2008/2009 is the sum of customs duties and excise taxes. How in the face of a slowing economy, a disrupted customs department and a new tax regime, do you forecast a 10% rise in revenues? This again was totally unrealistic and we said it in here at the time.

The point is this; given the rigidity of the government’s expenditure commitments, the government can not make these projections willy-nilly and in defiance of advice saying that the economy is slowing. To do so and in the absence of spending restraint on the other side, only sets you up for failure and the creation of deficits which leads to even more debt.

No one has a crystal ball. But all efforts must be made to ensure that these estimates are realistic. Because so much of government expenditure is fixed, for example in this budget, out of expenditure of $1.53billion, over $700million goes to wages and salaries; $177 million goes to interest payments. That’s $900 million out of the $1.53 billion committed on two items. When we add in rents and leases, we get the picture; the government has very little wiggle room.

Therefore, it is absolutely necessary then, when making decisions that affect the lives and livelihood of Bahamians that the government is prudent in projections and in the assumptions that are accepted.

It is also imperative that Bahamians are presented with all of the information that they need as it relates to the economy.  Communication must also be in plain language so that people may understand and are not puzzled by fancy talk and cryptic, obscure language. Straight talk must be the order of the day.

Particularly in times like these, the worst many Bahamians have ever seen it, there should be no use of fancy words and slick language to soften or conceal the real meaning of what was being presented.

Page 28 of the Budget communication; reference to borrowing:
“A deficit of such magnitude is not sustainable over the medium term and will clearly have implications for the stock of Government Debt which, at the end of June, 2009, is expected to stand at just over $2.9 billion or 38.9 per cent of GDP.”

In plain language: if we do not get our act together and cut down these deficits, we will have to borrow even more money.

It is also the responsibility of the government, especially in hard times, to periodically update the members of the public on the true state of the economy so that, understanding the severity of the economic crisis; individuals may make prudent decisions in relation to their personal finances. The public should not be given mixed signals or false hope of a quick turnaround in the economy.

I believe that the shock and disbelief expressed by so many Bahamians at the presentation of this budget was due to the fact that utterances by the government over the past year and in particular over the past few months have sought to understate and play down the severity of the economic crisis.

Having been lulled into a sense that things were not as bad as they seemed, Bahamians were shocked when the details of the budget with all of the cuts and the dramatic increase in the level of borrowing was finally revealed in the Budget Communication.

For example during the mid-term budget presented on Monday, 25th February 2008, the Minister of Finance in rejecting of S&P projections of a slowing economy had this to say on the topic of Domestic Economic Developments:
 

“I should also mention in this context the Standard &Poor’s report on the Bahamian economy. That report noted the downturn in tourism arrivals in the first 9 months of 2007, bearing in mind that tourism contributes 60% of GDP, suggested a shrinking in the construction sector which accounts for 10% of GDP, and also suggested that the financial services sector, which accounts for 20% of GDP, could be adversely affected by the global crisis in the financial markets. While, we note with concern the views of Standard & Poor’s, framed as they are in the general context of a US and global downturn which is not yet certain, we are not yet persuaded to downgrade the growth rate, in view of the fact that it was not a particularly dynamic rate in the first instance.”

He goes on to say:

“My Government has chosen to take a balanced view of the likely growth prospects of the Bahamian economy in 2008. The current outlook for strong capital inflows into productive projects already underway may not be seriously affected by global or U.S. developments in 2008 and 2009.

This could give rise to what we consider would be a certain element of ‘decoupling’ between the performance of the US and Bahamian economies in 2008. By this I mean that while normally the health of our tourism sector, and therefore our economy, is heavily connected to prevailing conditions in North America, in 2008 matters might be a little different. This is because even if there is a more severe recession in the US in 2008, the capital inflows and the momentum of some of the major investment projects in The Bahamas will partially compensate.”

I emphasize for the benefit of those commentators who refer to the investment projects left in the pipeline by the Progressive Liberal Party as pie in the sky that the Prime Minister himself, in February of 2008, almost a full year after the elections of 2007, had sufficient belief in these projects as to refer to them as he dismissed S&P’s projections of a slowing economy. Presumably in that year he and his government would have had the opportunity to closely check out the viability of these projects. He obviously felt that they were solid enough to cause him to make the comments that he did.

On Wednesday January 14, 2009 the banner headline of the Nassau Guardian reads “Govt. Revenue Behind $60 Million” the sub-headline: “Min. Laing says current revenue level is still about $1million higher than this time last year”. The article quotes the Minister of State as saying:

“At this point its not alarmingly behind so there has been no need for us, for instance, to make any drastic adjustments in government spending or anything of that nature to respond to what we would have thought would be a crisis change or downturn in revenue performance”. Asked whether the $60million shortfall was cause for much concern, the minister of state said: “It could be only provided you were not able to organize your own spending in a way where your fiscal performance was compromised by it. So for instance, spending is not at the level of the forecasted spending so you have that tradeoff between revenue that’s performing less that you had forecasted and spending performing less than you had forecasted… We still have to examine the overall fiscal performance to really get a sense of where things are”.

Here we have the Minister of State for Finance in January of this year telling the public that revenue is ahead of last year and since spending is supposedly down, we have nothing to worry about.

On Friday 16, January 2009 the Prime Minister and Minister of Finance is quoted as saying in relation to the performance of the tourism sector;

“Despite the precipitous decline in tourism arrivals during the last quarter of 2008, overall arrivals were down for the full year by less than five percent, which is better than our forecast in November of six percent.”

The impression given to the public is that tourism, the engine of the economy, was not performing that badly.

In March of this year, the Prime Minister in wrapping up the debate on the mid-term budget in the House of Assembly says that revenue collection is “disastrous” and revenue is $100 million lower than forecast.

All of a sudden, a less than two months later in the budget communication 2009/2010, it is revealed that  revenues are $264 million less than forecast, not tracking nicely, not a disastrous $100 fall, down $264 million.

Revenues are down $264 million.

In terms of the revenue, in five short months we have gone from $1million ahead of last year, to “disastrous” to whatever the word for worse than disastrous is.

We have a total deficit of $422 billion dollars, just under half a billion dollars. People understand what total means GFS, Recurrent notwithstanding.

A resolution to borrow $309million was just passed in that other place.

In the budget, we have an estimate of proceeds form borrowing of $373million. Will we be coming back within this year to borrow more money than the $309million authorized by the resolution?

People rely on information they receive from their elected officials. They expect that that information will be complete and accurate. No spin. No watering down the seriousness of the situation. No case of one serious speech one day and the next day we are telling people that things will be just fine.

The references that I have made, to the picture of the economy being painted on occasion, by the Minister of State  and the Minister of Finance and the picture presented in this budget brings into question the faith and confidence that the public may have in pronouncements of the government and the information that they provide.

The even larger question is that given their performance so far, in reading the signs of economic slowdown, in taking advice from impartial, objective professionals, in making adjustments, and in informing the public; are we truly in steady hands? Are we on the right track?

Bahamians depend on the government not only to tell them like it is; but they also expect their elected leaders to have the ability to read the signs showing the direction of the economy and to put in place initiatives to adjust to and to withstand the effects of economic downturns.

Elected leaders do not have to derive the forecasts. There are professionals who do this. All government has to do is read the recommendations and heed the advice. They should heed the advice of the trained professionals.

The Central Bank of the Bahamas has extensive research capabilities and has been advising governments of the Bahamas for over thirty five years.

This is a sample of what the Central Bank of The Bahamas had to say about the economy of the Bahamas beginning as far back as September 2006:
    “Indications are that the strengthening in the Bahamian economy observed in the first half of the year was maintained during the third quarter, reinforced by strong consumer demand. Construction output also expanded as bank lending supported increased housing investments; however, weakness in both air and sea arrivals suggested a softening in tourism output” Central Bank Quarterly Economic Review September 2006 page 1
    “Preliminary evidence suggests that economic activity remained positive during the fourth quarter, buoyed by steady growth in construction output and domestic demand, which offset weakness in the tourism sector.”  Central Bank Quarterly Economic Review December 2006 page 1
    “Preliminary data suggest that the economy’s growth momentum moderated somewhat during the first quarter, as evidenced by a slowing in tourism output and consumer demand. However, key drivers of growth continued to be foreign financed projects in the tourism sector and steady residential construction investments.”
Central Bank Quarterly Economic Review March 2007 page 1

“Preliminary data for the second quarter of 2007 indicate that the Bahamian economy expanded at a more moderate pace, compared to the same period a year earlier, based largely on weakened tourism output and reduced growth in consumer demand and tempered foreign investment inflows”
Central Bank Quarterly Economic Review June 2007 page 1

“Preliminary information suggest some moderation in the rate of expansion in the Bahamian economy during the third quarter of 2007 as construction investments slackened,…”
Central Bank Quarterly Economic Review September 2007 page 1

For policy makers in the new FNM administration, in order to keep the economy growing, the path as evidenced by the Central Bank reports quoted above was clear:
1. Pay attention to tourism
2. Keep construction strong
3. Keep the Foreign Direct Investment inflows coming

What did they do instead?  Ignoring advice, they withheld additional funds for tourism promotion during a time when tourism was softening. They accused the former minister of overspending and ridiculed his advice to ratchet up their marketing efforts. When additional funds were allocated in February 2008, the damage had been done. There are also questions about the effectiveness of the marketing programme purchase with the additional $12million allocated in February 2008 and whether the money was well spent.

The FNM failed to renew, effectively cancelling, without explanation, the stamp tax exemption for first time home buyers for homes value $250k or less. This had a devastating effect on residential construction and on the real estate industry. Many people complained bitterly. According to the Central Bank reports cited above, construction was keeping the economy growing while tourism was weakening. Residential construction was a very important component of this. When the stamp tax exemption was reinstated by the FNM in July 2008, the damage had been done.

The FNM cancelled over $80million in duly awarded capital works projects. By so doing, the FNM undermined confidence that with the government a deal is a deal. Removing these capital works also dealt a blow to the economy by halting the economy’s momentum. Recently the Prime Minister announced that he was fast tracking these very same capital works projects to stimulate the economy.

This is a belated admission that the PLP had it right! But valuable momentum had been lost.

These are the facts. Instead of steady hands, we have experienced a government that has missed the signals, ignored advice and in the end had to reverse itself on the cancelled infrastructure projects, on the stamp tax exemption for first time home owners, on the tax exemption for public service drivers, on the increases in duty brought on by the introduction of the excise tax and the list goes on.

My question is this, having ignored advice, overestimated revenue using very optimistic assumptions, having engaged in downplaying how serious the economic situation was, can this administration be trusted to implement the right policies now? Are we now on the right track?

Members of the public who do not have access to the inside information that the government does, depend on the government to provide them with truthful timely information upon which they will base their financial decisions

So when you have storm clouds gathering we have our government talking about decoupling, talking about revenue tracking very nicely with last year people have to wonder if the government gets it.

What we need is a frank discussion of the economy. The call for a national economic discussion has fallen on deaf ears.

Thanks to the group NES (National Economic Summit), there was a summit, but who knows anything about it? The fact of the matter is without the presence of the government the coverage given to and the weight given to the findings will not be what it would be had the government led or at least participated in the exercise.
It is not too late to have such a national discussion where all the stakeholders can come together and propose solutions for this crisis that we are in.

National Debt
This brings us to the point of the national debt. I am very concerned about the size of the national debt and the rate at which this debt is being increased.
Over the past two years, according to the information presented in Table VIII at the end of the budget communication, the government has borrowed $484 million. If we add in the $50 million increase in the government overdraft authorization, the figure is $534 million.  Five hundred and thirty four million dollars, over half a billion dollars borrowed in the past two years alone. That other place has passed, as part of the package of budget bills, a borrowing resolution for $309 million.

In the estimates for revenue we have the figure “Proceeds from borrowing” of $373 million. So this year we will be borrowing an additional $373 million. At the end of the first three years of this administration we would have borrowed the $534 million that we have already borrowed in the first two years plus the $373million that we will borrow this year for a total of $907 million. Nine hundred and seven million dollars added to the national debt in the first three years of this current administration.

If we take an average interest rate of 5.5%, interest payment on that increase alone is $50million in three years. That is the increase. By 2012, we will be paying $199.8 million in interest alone.

That is if things go according to the projections.

We are borrowing too fast.

In this years’ budget $264million dollars is earmarked for servicing the debt; $177million in interest and $87million in redemptions. By 2012 we will be paying just under $200 million in interest alone. Add another $90 million for redemption and we are approaching $300 million for debt servicing by 2011/2012.

This $264 million for debt servicing this year is the largest allocation in the entire budget; more than education, more than health care, more than national security. The most money in this budget goes to debt.

The government constantly refers to the target of 40% and the need to respect this limit. By 2012 we will add an additional $1.07billion to the national debt. This is the result of forecasted deficits of $286 million in 2009/2010, $250 million in 2010/2011 and $185 million in 2011/2012.

According to the charts, in the best case scenario, by 2011/2012 we will be looking at a debt/GDP ratio of 47.4%.

That’s central government debt. When we add in the debt that the government has guaranteed, we are looking at a rate of national debt to GDP in the range of 53%. (Government guaranteed debt outstanding has averaged $450million over the past five years.) This is the figure that we must look at because if push come to shove, the government is responsible for the debt it has guaranteed. We have a request now to guarantee and additional $230 million loan for BEC.

According to these best case scenario projections, by 2012, the national debt will be $4.083billion. That’s $13,170 for every man woman and child in The Bahamas!

That is if we recover, if we get growing again, if we go back to the position that we were at before the slowdown. That is a lot of ifs.

What is particularly irksome for me and I am sure many Bahamians is the difficulty in getting information on what this money has been spent on or will be spent on. We hear phrases such as “the stimulus package” and “to cover shortfalls”.  What exactly is this money being spent on and in what proportions? We are talking about the future of this country. If I am going to owe $13,170, I believe I should know what this borrowed money is being spent on and have a say in how it is being spent.

No one should be considered a nuisance when these questions are asked.

I spoke before about how they in the United States have a website, Recovery.gov where they are showing exactly how the stimulus money is being spent. Any citizen can go and see how the $787billion stimulus package will be allocated and how mush has already been spent.

In three years we would have borrowed $907 million and when we ask about it we get the stone wall.

What does the rate of borrowing from 1982-2002 have to do with this? That is part of the problem, we spend too much time looking way back in history to try and justify today’s situation.

My concern is that with a shrinking economy, declining revenues, a ballooning debt and in the absence of a plan, any plan, to get the economy growing again, we face a situation where more and more money will be allocated to debt servicing. More and more money going to service debt means less and less money available for everything else; less and less money available for essential services.

We are indeed in for some very difficult times ahead if we can not get this economy going, erase some of the sea of red ink confronting us and get to work on reducing the level of debt.

These are very, very serious times. If we can not get this economy growing, we will be faced with some real difficult choices next year and beyond.

Amendments to the Tariff Act and Excise Act
The amendments to the Tariff act and the Excise Act reverse the increases that were put in place last year. Items that were tax free before last year’s budget are now being made tax free again.  Toothpaste, baby napkins, school books, babies clothes, colouring books among others.

Was making these items taxable and increasing the taxes on other items a mistake last year? Or was it a deliberate act? If you were to go by the response of the government to criticism last year, it was deliberate. The government said that the information was there for all to dig up and find. So it was no mistake? We are just doing an about face? After increasing the taxes last year, we reduce them to where they were before the increase. What are we doing?

If in fact the increases were a mistake, why have we waited a year to give relief when we could have done this at any time during the year or at least during the midterm budget? It would have taken five minutes. Instead we come here with these amendments as if something new and good is being done.

The people cried, the merchants cried that they were at a disadvantage to their counterparts in the Caribbean. Yet we wait a full year to make the correction? What damage has already been done? How many visitors stay on the ships because the have heard that Nassau is too expensive. How much do we now have to spend to let our visitors know that we are competitive again with our counterparts?

Yet another example of a government refusing to listen to advice, maintaining a course of action, the end result is that we all suffer.

Amendments to the Real Property Tax Act
The government is forecasting a thirty million dollar increase in the amount of real property tax collected? Recent experience showed revenue of 79mil in 2006, 72 mil in 07 we are not told what the figure is for 2008/2009 so far,  but how in an economic slowdown, with property values going down do we forecast such a massive increase. Is it realistic? What does it mean for the estimates? If we base our spending on this forecast and we do not meet it, there is another hole that we have to fill.

What additional resources are being made available to the real property tax unit to enable them to meet this target?

We have an amendment to the Real Property Tax Act on the way.

Will the amnesty on real property tax arrears really reap the benefits given that the enforcement regime is not enforced.

The Progressive Liberal Party implemented a cap of $35k for real property tax on owner occupied property. The effect was that no home owner would pay more that $35k per annum in real property tax. The rationale was that it was beneficial to the Bahamas to attract persons who could build or purchase multi million dollar homes. For example, the stamp tax alone on the purchase of a ten million dollar home would be a million dollars. This would offset any loss in real property tax. Then there are the benefits of employment in construction and after construction and in maintenance and running the properties and other contributions to the economy. The purchase and or construction of multi million dollar homes are a form of foreign direct investment.

In defending the cancellation of the $35k cap on real property tax, the Prime Minister gave some statistics in his opening of the debate on the numbers of persons affected by the implementation and subsequent cancellation of the cap. These statistics, presented by the Prime Minister, prove the effectiveness of the policy of the PLP. Before the cap there were 17 persons paying over $35k per year in real property tax, by 2007 this number had grown to 57 persons paying the cap of $35k per year in real property tax. The effort to attract these high net worth individuals to the Bahamas was successful. Under the cap the number grew from 17 to 57. Now, the cap having been removed, there are 68 persons paying over $35k. How many of that additional 11 had their homes under construction in anticipation of the cap continuing in effect? These figures prove that the policy to implement the 35k cap had the desired effect of attracting more of those individuals to the Bahamas. This is no brief for the super-wealthy; instead we recognize that there are benefits to having these individuals call the Bahamas home.

I think the removal of the cap is another case of “Christie did it, so let’s cancel it”.

Now I understand that having gotten some understanding of the aim of the policy of the cap, some compromise is being proposed by the government.

Agriculture
I listened to the Minister of Agriculture, in his contribution to the debate in the other place, wax eloquent about the plans for agriculture. He spoke about the importance of food security, the need to reduce the amount of money spent to import food. He talked about the efforts of the Ministry of Agriculture in sensitizing Bahamians once again about the importance of backyard gardening. Something we all did years ago but have seemed to forget. He spoke about the money being spent to help equip farmers and land being made available for farmers. This is all very good. The Minister of Agriculture, the Member of Parliament for Long Island and the chairman of BAIC, the Member of Parliament for South Abaco, have been making tremendous effort. They are going all out in promoting agriculture.

Yet at the very time that these two men are working so hard, their efforts are being undermined in this budget. While these two men are trying to get Bahamians to grow more, and trying to encourage Bahamians to consume more of what is being grown locally, we have in this budget, the reduction of duty on items such as cassava, okra, pigeon peas, beans, cucumber, sweet pepper, corn, guava, beets, lettuce, carrots, onions, tomatoes, broccoli, cauliflower; all things grown here in the Bahamas.

If the little protection that is available to local producers in the form of taxes on imports is removed, how are they expected to compete or even survive? This opens the door for cheaper imports. Every country in the world protects its farmers, yet we continue to pull the rug from under them and in the process undermine the efforts of the minister of agriculture who is trying to make a difference. Are we serious? On the one hand the government is talking about promoting agriculture and on the other hand, by its actions, the government is working against local growers.

Crime
Crime and the fear of crime threaten to cripple this country. Bahamians are living in constant fear that they or their loved ones may fall victim to some heinous crime. Daily, Bahamians are losing faith in the ability of our justice system to bring criminals to justice. Many do not bother to report crime anymore.  If something is not done and done quickly, this will affect our main industry. I believe it already affects the decisions of people to go into business. Why go into business when you run the risk of being gunned down any day. If business people are deterred from investing in the economy because of the fear of crime it obviously affects our economic growth and employment. We ignore these things at our peril. We can bury our heads in the sand and pretend that all is well but nothing will get better until a comprehensive plan to deal with crime is developed and implemented. This includes not only enforcement but also prevention and rehabilitation programmes.
I recall the publication of the list of persons released from HMP in May of this year. The document was circulated over the internet and caused fear and panic. The response of the Minister of National Security to this publication was that he has launched an investigation into who leaked the information. No assurance that more will be done to speed the administration of justice, no assurance that those requiring monitoring will be monitored (electronic monitoring?); no he will do his utmost to find who leaked the information. He should find them and give them a medal!

The public should have this information. How many persons are now on bail for murder? How many have been released having served time for murder after having death sentences commuted. The public deserves to have this information and not a minister who hides behind platitudes and self congratulation.

People are terrified! The minister goes on the radio and says he is doing a wonderful job! Incredible!

The fact of the matter is that with more than eighty murders in 2007, 74 in 2008 and 34 so far this year. That’s 188 murders in this Bahamas in the past two and a half years alone! If we are lucky we have had ten cases tried in that time frame. When will these cases be disposed of? What is the plan? We passed jury legislation and electronic monitoring legislation. Was that a waste of time? (Study on economic impact of crime.)

National Youth Service
When I saw the article in the Nassau Guardian quoting a report alleging abuse at the National Youth Service Programme in Andros, I knew that the programme was being cancelled. The programme is being dismantled, plain and simple. When the budget is being cut by 60%, the programme is being dismantled. I pray that we do not live to regret this move. I hope we do not regret this like we now regret that a programme of national youth service, the vision of the late Sir Lynden Oscar Pindling was not started twenty five years ago.

Many look at the state of crime in this country today and lament the fact that a national youth service programme was not started in the late 1980’s. What would be the state of crime today, had we, twenty five years ago implemented a programme to teach the young people the importance of making good choices, of having national pride, of concentrating on their education, on being good, responsible citizens. Would we be better off? Yet with the state of crime what it is today, the government is dismantling a programme that seeks to rescue young men before they descend fully into a life of crime.

I believe that the decision to close the programme is a petty political move. It is designed to erase a programme that was started by the PLP and it is designed to punish the people of North Andros for electing a Progressive Liberal Party Member of Parliament. That is sad. I believe that we will all live to regret it. In my opinion, the explanation given by the Minister responsible; that the government by cutting the allocation to the programme by 60% is seeking to expand the programme is laughable.

There are some things that should transcend politics. My fear is that by the time we truly accept this, it will be too late. I call on the government, for the sake of the future of this country, to reconsider this decision. (My conversation with RBDF officer {small country})  (Editorial defining true national service/definition of true urban renewal.)
 

Public Service Reform
The communication speaks to public service reform. Unfortunately this administration’s view of reform is to unceremoniously send people home. That’s the reform, go home. What I found intriguing was the built in excuse for future economic sluggishness and the failure to emerge out of recession. Blame the civil servants. Over the past year we have seen immigration, Police and Customs officers sent home. In all cases this was preceded by stories in the press talking about the need to weed out corruption.

The standard modus operandi, crucify them in the press so when you send them home, no one will protest.

I wonder what effect the public inquisition and subsequent retirement of senior officers of the customs department has had on customs collections. Or maybe it is all the economy.

What is the effect on the morale of current employees in the public service when they look at colleagues who have given so much for so long sent off without so much as a “thank you very much”?

One day I hope we come to appreciate that public service reform involves giving public servants the tools and the room to do their work. It is not how many people you can fire or how crudely you can do it.
 

Alternatives
· I suggest that the government immediately order an audit of government departments to identify instances of wastage of government funds. (Refurbishment of roundabouts-much fanfare)
· Implement a plan to manage and gradually reduce the national debt, with specified timelines.
· The government should study the feasibility of reducing the rental bill by constructing government buildings in parts of New Providence other than downtown or Cable Beach. This year, the government will million on rent.
· Downsize the size of the NRIP and use the remaining funds to invest in a properly managed, safe and reliable public transportation system. This will alleviate congestion and reduce the national consumption of fuel as well as create employment, reduce stress and road rage and increase productivity.
· Invest some of these excess funds in attracting stopover visitors, in retooling the educational system for the twenty first century and in retraining displaced workers. Retooling the educational system should involve making sure that every three year old has a seat in a preschool. This is a commitment that we have to make so that we may produce graduates that are competitive.
· If 50% of cruise passengers do not come off the ship and if those that come off the ship spend an average of $67, why are we spending $50million to dredge the harbour. Would those funds be better spent in bringing stopover visitors who spend on average about $1,000?
· Develop a new inward looking investment policy that will guarantee that Bahamians develop their own economy and come to own a larger share of their economy, especially the tourism economy. This may involve making the Hotel Corporation of the Bahamas a privatized tourism development corporation with shares owned by the public. This Development Corporation can obtain crown land from the government and develop properties throughout the Bahamas, properly managed and staffed for the benefit of its shareholders, the Bahamian people. This will increase Bahamian ownership and thereby deepen every Bahamian’s appreciation of the tourism industry.
· Bermuda, one of our main competitors is moving off grey list. What are we doing? Will we sit here and fall further and further behind our competitors and stubbornly stick to the view that we do not need a Ministry of Financial Services?
· We must find a way to bring our people together and make them understand that we are in a serious situation and we require all Bahamians to be on board to ensure that there is a shared sacrifice; that we respect and take care of government property. The government must lead by example.
· Immediately move to rationalize all government programmes charged with business development.

Conclusion
We are in very difficult times that require vision and fortitude. The budget gives us a description of the problem. If the textbooks have no solutions, we must call on our resourcefulness as Bahamians to bring us out of this crisis. Talking about it will not do. Borrow and spend is not the solution. Capital intensive projects that generate a few temporary jobs is not the answer, we must find a way to get the economy growing.