#GrandBahama, June 19, 2018 – Bahamas – The government has made provisions to empower people during this current budget period, said Deputy Prime Minister and Minister of Finance, the Hon. Peter Turnquest during the Grand Bahama Chamber of Commerce Business Luncheon, June 15, at Pelican Bay.
Minister Turnquest, in explaining why the government will increase VAT from 7.5% to 12% to increase revenue, presented to Chamber members what the government faced when coming to office on May 10, 2017. As a result of the large commitments due, the government borrowed some $1.4B to cover those expenses. This, he said, was not the end of it, as there were other outstanding bills amounting to millions of dollars.
What previous governments have been doing is using the current budget to pay last year’s bills, and rolling it over continuously. He said, there were a number of times he called for outstanding bills that were not brought to his attention until months later amounts to hundreds of millions of dollars and added that he has advised the staff that if it happens again, “when you bring me that next bill and it relates to the previous period, bring me your resignation the same time.”
This resulted in more bills coming, but the government will partially deal with those this year.
With a debt of $7.2B, and interest on that debt in the amount of $381M annually, which increased by $89 in the past year, the government is faced with a serious challenge.
“That $381M represents more than our National Security budget, our Health budget, or Educational budget by over $100M. Obviously that is not sustainable.”
He continued, “For years, we have been borrowing to meet our commitments rather than trying to make government more efficient and roll back our expenditure.”
A lot of money was spent when a previous administration created programmes to employ people, he said. The economy was slow and people were losing jobs at an alarming rate. While the government employed some individuals, it cost a lot of money. It is difficult to adjust government spending, continued the Deputy Prime Minister, adding that whenever someone is let go, there is the political side, and that person is in a position of having no safety net. This results in their having to go back to the government for assistance.
“So have you really won anything? Not really because you’re taking them off of the government payroll where they are doing something and putting them on the social roll where they are only getting into mischief. It isn’t really the answer, certainly not in the short term.”
The government went through the process of trying to cut costs without causing social upheaval and they started by looking at contract workers who had been on the payroll for the 52 week job programme, which became 104 weeks. “There was no off ramp provided for them. They were left just as vulnerable one year later, as they were when hired.” This, he said, is not sustainable, productive or empowering to the people. To deal with this, the government has provided not only free education at BTVI, but established a Small Business Development Centre which will come on stream in July.
“The change is not a simple one. It is not like in the private sector who know what to do.” He continued, “It’s not all bottom line. You have to maintain a stable environment and recognize that these are people that you’re dealing with. That’s a little bit different than just looking at a profit motive. “Whatever approach you take, it has to be gentle, accommodating and it has to make provision for those being transitioned out.”
By: Robyn Adderley (BIS)
Photo Caption: Deputy Prime Minister and Minister of Finance, the Hon. K. Peter Turnquest, made a presentation on the 2018/2019 Budget, currently being debated in the House of Assembly to the business community at the Grand Bahama Chamber of Commerce Business Luncheon on Friday, June 15, at Pelican Bay resort.
(BIS Photo/Lisa Davis)