THE WORST BUDGET IN HISTORY OF THE BAHAMAS
The Shadow Finance Minister Chester Cooper MP for Exuma and Ragged Island answered Peter Turnquest, the Minister of Finance just after his annual budget statement on Wednesday 27 May 2020. The budget will have a 1.3 billion dollar deficit, the largest in the history of the country. The Shadow Minister’s full statement 27 May 2020:
Shadow Minister of Finance
The budget communication today was uninspiring, unimaginative, unimpressive and, quite frankly, unbelievable.
This was not a communication worthy of a Minister of Finance. Serious business people have stopped listening to this Minister of Finance. The Finance Minister must be truthful – we did not need a political rally speech, but a simple factual statement on the economy without embellishment.
It was the worst budget communication in living memory.
This is fitting I suppose, for the worst administration in the history of The Bahamas.
As expected, we heard a cocktail of blames: blame the PLP, blame Hurricane Dorian and blame COVID-19.
The precarious fiscal situation we find ourselves in today has less to do with Hurricane Dorian and COVID-19; it however represents the cumulative impact of a series of bad fiscal decisions over the past three previous budgets.
Had this administration not exacted such misery on the Bahamian people under the guise of fiscal responsibility, and instead focused on job creation and economic growth, we would be better prepared to deal with the COVID-19 crisis and its aftermath.
The Minnis administration has squandered the past 10 weeks by failing to implement the common-sense fiscal measures that the party and myself outlined months ago.
This was also to put in place the digital and public infrastructure and necessary reforms for the future Bahamas.
All of this was before the recent sovereign credit downgrade and the negative outlook which will make borrowing even more expensive.
To paraphrase the saying: You snooze, the Bahamian people lose.
As for the failures in the aftermath of Hurricane Dorian, this administration has only itself to blame.
This administration wasted time creating additional layers of bureaucracy that slowed the restoration of Abaco and much of Grand Bahama.
We need not dwell too deeply in the past for the moment, but history informs where we are today.
The disbandment of the revenue task force, and an ill-advised VAT increase led to multiple failed revenue targets and the most rapid increase in borrowing in history, without a plan, without a strategy that resulted in nothing to show
Instead of borrowing to pay bills that could have been amortized, they could have borrowed to invest in agriculture and fisheries.
Borrowing from the owner of a dilapidated hotel that every right-thinking Bahamian begged them not to, when they could have invested more deeply in technological advancement.
Borrowing to build plants at BPL that are still not fully operational, when they should have been investing in solar, wind and wave technology.
This unfocused and reckless borrowing and failure to properly examine the revenue regime have led to the largest deficits in our history, thus, the largest national debt in our history.
We warned the government to leave some borrowing headroom and a rainy-day fund, but they did not, hence, another downgrade of our sovereign credit rating.
And now, we find ourselves in the embrace of the International Monetary Fund.
We are hat in hand having to accept its “no strings attached offer”.
And this is usually where it begins.
We predict The Bahamas will have to enter into a structured lending program which will happen before this administration is voted out of office in 2022.
When you hear “IMF” from now on, remember – It’s Minnis’ Fault.
We told this administration to borrow wisely, borrow to invest in Bahamians.
In less than three years they borrowed more than $3 billion gross and close to $1.5 billion net with nothing to show.
Bahamians are still asking what in the world they did with all that money.
The self-proclaimed master deficit manager Minister of Finance has now brought us the biggest deficit and debt level in our history.
The borrowing this administration has undertaken has been of no material use to this country thus far.
The lack of financial flexibility brought about by this administration’s failed revenue and expenditure strategy is why we see such floundering in response to Hurricane Dorian and COVID-19.
This administration’s poor handling of the economic side of this COVID-19 crisis has made things worse than they ought to have been.
The most Honourable prime minister’s rank incompetence as the competent authority in this crisis has been on full display.
Businesses that did not need to close, remained closed, hampering revenue generation for a cash-strapped government.
Services that could have been an economic boon, like the real estate sector, were not allowed to conduct business.
In the communication given today, we see that this administration has decided to take some advice from the PLP and start to focus more on people.
Now the FNM wants to beef up NHI after railing against it and treating it like an unwanted child.
The new monies allocated to the social services budget increase are not robust enough.
And is a slap in the face of Bahamians after cancelling RISE and reducing other programs, like uniform assistance.
This out of touch administration gloats about having the courage to cancel breakfast and lunch at the House of Assembly after arrogantly raising the food budget last year.
The duty reductions mentioned don’t cut the mustard and building supplies should have been reduced years ago to spur construction and make home ownership more affordable.
The possibility of new fees due to cuts in subvention to state-owned enterprises now puts the burden on the public to fund entities the government should have the courage to restructure.
What exactly will we be asked to pay more for?
Had the government committed what is now saying it will to small and medium sized businesses from the outset, the economy would have grown far beyond the point it had pre-COVID-19.
Recent studies have put the gap between need and funding for SMEs in The Bahamas at between $150 million and $200 million per year.
The work of the SBDC is admirable, but $55 million per year between the SBDC and the Venture Capital Fund for a roughly $150 million issue isn’t going to cut it.
The intended investment in food security is too little and three years too late.
A food security investment of less than $2 million on a $3 billion import bill is another sign of lip service and not real action.
Where are the plans for Grand Bahama and Abaco?
These islands need very structured assistance and can be drivers of a national rebound.
The lack of planning around a new hospital and airport in Freeport is completely unacceptable and the lack of a plan for the redevelopment of agricultural and industrial activity in Abaco is a major letdown.
Again, we urge this administration to beef up BAMSI to see more production output.
If we do not use BAMSI strategically, we will not see results.
On the fisheries front, we caution the government on allowing foreign participation in this sector.
These are Bahamian waters and fishing and marine resources should be reserved for Bahamians.
Greater reliance on public private partnerships, something that we have been calling for these past three years, is also welcome.
These are precarious times for our country.
The majority of Bahamians have lost confidence in this administration.
They do not regard our prime minster as a man who is looking out for their interests, but rather the special interests he surrounds himself with.
Nor do they regard him as a man who knows what he is doing.
Their failed policies have brought us to the edge of ruin.
We only pray that it is not too late to reverse the vast damage that has been done.
We urge the Bahamian people to not be swayed by the slick videos and colourful graphics that they will endure over the next few weeks.
This will not sooth the pain, inflicted upon the Bahamian people at the hands of this incompetent administration.
Overall, this is a budget about treading water and not about moving forward.
If this administration is going to add another $1.3 billion to the national debt we all should have much more to show for it.
End