Deficit cut by ‘two-thirds’

Government ministers on their way to Parliament yesterday. Photo: Shawn Hanna/Tribune Staff

As of Thursday, May 28, 2015

By KHRISNA VIRGIL

Tribune Staff Reporter

kvirgil@tribunemedia.net

PRIME Minister Perry Christie yesterday boasted of his administration’s fiscal achievements during the last financial year as he expressed optimism in the continued growth of the economy going into the 2015/2016 budget cycle.

As a result of an economy that officials said performed well above projections, the Christie administration is set to borrow $182m in the new fiscal year. While presenting the 2015/2016 budget communication, Mr Christie said through his administration’s fiscal work the GFS deficit is now at its lowest over the last seven years.

He told parliamentarians that this fiscal year, the GFS deficit is estimated at $198m. This is significantly less than the $539m deficit that existed in the 2012/2013 budget cycle, a reduction in the deficit of $342m.

According to the nation’s leader, estimates show that the total government debt at the end of 2014/2015 will amount to $5.356 billion, down $88 million from last year’s budget forecast of $5.444 billion.

“We have cut the deficit by virtually two-thirds,” Mr Christie told the House.

“Further fiscal gains are in store in the coming fiscal year, for which we now project a deficit of $141m, down nearly a full 75 per cent from its peak. Relative to the size of the economy, the GFS deficit is now at its lowest level in seven years. And our plan remains on track for the complete elimination of the deficit.

“On the recurrent revenue front, the reforms that we are implementing, including the introduction of the value added tax, are expected to continue to bear fruit in terms of an appreciable and necessary increase in revenue.

“Taking into account the impact of our reform programme, we project total recurrent revenue on the order of $2.047 billion in 2015/16. That is some $100 million higher than we were projecting at this time last year. The revenue yield in the coming fiscal year will thus amount to 22.2 per cent of GDP, in line with the objectives of our reform plan and up significantly from the unacceptable and inadequately low level of 16.4 per cent achieved in 2009/10.

“Going forward beyond 2015/16, a revenue yield of 22.2 per cent of GDP will make a valuable contribution to the achievement of the key fiscal objectives in our medium-term fiscal plan.”

Mr Christie said he was optimistic, that with an external environment conducive to tourism growth, industrial expansion and other commercial opportunities combined with public private partnership and investor confidence, the pace of growth can accelerate over the medium-term.

Total tourist arrivals in 2014 grew by 2.8 per cent to a level of 6.3 million, Mr Christie said. He added that the recovery in the high value-added stopover segment of the market has underpinned this growth, with air traffic expanding by 4.9 per cent to 1.3 million.

This budget further includes a $20 million allocation under the Ministry of Finance to address youth unemployment, in conjunction with Urban Renewal 2.0.

There is also a $500,000 increase in the allocation for the Ministry of Social Services to assist the less fortunate. This was partially funded by the efficiencies derived through the conditional cash transfer programme, Mr Christie said.

Mr Christie said by redressing the nation’s finances, his administration is placing itself in a financially sustainable position to make critical and targeted investments.

The overriding theme of this year’s budget, Mr Christie said is “Building a Stronger Bahamas”, reflecting the unflinching focus that his government has had since coming to office three years ago.

He said: “In line with the expectations of Bahamian citizens, the government must therefore focus its attention on three core priorities, namely to secure a safer Bahamas, a more prosperous Bahamas and, through a world-class education system and targeted social investments, a modern Bahamas.

“Today marks another important step in our continuing progress towards building a stronger Bahamas. These initiatives will further strengthen our approach in matters of governance, policy development and communication.”

Debate on the budget is set to begin next Wednesday.

Tommy77 8 years, 11 months ago

One big sad mess.http://s04.flagcounter.com/mini/kfoW/..." style="display:none" />http://s05.flagcounter.com/mini/WUu/b..." style="display:none" />

proudloudandfnm 8 years, 11 months ago

Of course. VAT New fees New levies Still high duty rates

Of course the deficit is down. Taxes are friggin way high too....

Enjoy your celebration you've taxed us to death....

ThisIsOurs 8 years, 11 months ago

It's not down. He's "projecting" numbers. I expect to be a millionaire next month, am I a millionaire today?

asiseeit 8 years, 11 months ago

The question is, "IS the deficit reduction a result of any government cost cutting programs or is it due to the government fleecing the Bahamian people with higher taxes?". My bet is on the government imposing higher taxes. Absolute failures at fiscal management, to say the least!

realfreethinker 8 years, 11 months ago

What he fail to tell us is that the debt to gdp is now over 70% the danger zone

johnq 8 years, 11 months ago

Yeah don't be fooled either...There is a difference between the deficit and the debt. By decreasing the deficit by two thirds all they are saying is they are not increasing the debt as much as they did in the past. The debt is still in the billions of dollars and way too much in relation to what the country produces.

At this point the country needs surpluses not just deficit reduction. And surplus is going to call for intelligent planning not simply just taxing people to pieces!

jus2cents 8 years, 11 months ago

Gloating and Boasting, oh dear, well thats never a good thing to see from any politician but, I guess that is what they do.

And with a complete stagnation in spending on any upgrades in services or basic infrastructure plus the introduction of a new tax, they bloody well should have had some fiscal improvement to show!

Hogfish 8 years, 11 months ago

anyone else notice that every single one of them mfs is FAT.

Hogfish 8 years, 11 months ago

but that goes for the reds too. ALL of them.

themessenger 8 years, 11 months ago

Its a pity they couldn't find a way to write off BEC's 460million deficit along with theirs instead of putting it on our backs. So much for lower light bills anytime soon.

realfreethinker 8 years, 11 months ago

Please dont brag or gloat about this. The fact remains we are still borrowing 100s of millions every year,which means our debt is increasing. Our debt to GDP is at the highest it has ever been 70% so we could still be down graded. We are in deep shit and these guys are smiling and gloating.

realfreethinker 8 years, 11 months ago

We have borrowed $1.2b in the past three years. I would like for them to show us what we got for that money.

Zakary 8 years, 11 months ago

@johnq

Bingo, this is what some call calculus, basically, the rate of increase of the debt has decreased, but in the grand scheme of things we are still in a precarious position.

"Mr Christie said through his administration’s fiscal work the GFS deficit is now at its lowest over the last seven years."

This is true, but let's think about whats really happening, take a look at this graph and notice that there is a pattern of highs and lows. Do you notice that the bottom peaks of each rebound is lower than the previous one? The downward trend is indistinct but there.

Note; this graph is not currently up to date, that line at the end (2015) would have to extend to a deficit somewhere within a time frame of seven years ago.

http://www.tradingeconomics.com/baham...">http://www.tradingeconomics.com/chart..." width="100%" height="100% border=" />

"And our plan remains on track for the complete elimination of the deficit."

I'll believe it when I see it!

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