By NEIL HARTNELL
Tribune Business Editor
The Democratic National Alliance’s (DNA) leader yesterday said today’s economy would prevent him from entering business in the manner he did 20 years ago, describing the Budget as lacking vision and providing “no light at the end of the tunnel”.
Branville McCartney said the Government’s 2013-2014 fiscal programme offered nothing in terms of how to grow the economy, and attract new businesses and industries to the Bahamas.
And he described the various new and increased taxes as “not good for business”, especially small companies, while decrying the absence of incentives for Bahamians to become entrepreneurs.
The DNA leader added that many Bahamian firms were now being “taxed to kingdom come”, and the lack of consultation with affected industries meant many had been hit “out of the blue” - creating much ill-will.
“We have been in an economic recession for the last five years, and there seems to be no light at the end of the tunnel,” Mr McCartney told Tribune Business.
“That is very concerning, as we can’t say whether in the next year, year-and-a-half, we will see an improvement.
“When you can seen an economic pick-up coming, you can budget and prepare for that, but you can’t see the light at the end of the tunnel and there is no one with a flashlight to guide you out. That’s how the business environment is.”
Noting that his wife was in the process of expanding The Meridian School via a second educational institution in western New Providence, Mr McCartney said the duo had been in business for 23 years.
“We were saying that some young person trying to make it in this Bahamas, even to buy a home, it’s virtually impossible,” the DNA leader said.
“The banking system is difficult, the red tape you have to go through with government is discouraging, and I don’t see where the Budget is able to assist in that regard.”
Speaking from his experience as an entrepreneur, Mr McCartney told this newspaper: “I’m involved in the legal profession [Halsbury Chambers], real estate, the pharmaceutical business and education.
“It is not easy. My wife and I, collectively, we’re responsible for a hell of a lot of people in terms of their families every month, and we want to make sure the economy is stable and growing.
“When we don’t see that and are taxed to kingdom come, it’s not encouraging to people. It’s not encouraging people to step out and become entrepreneurs.
“If I try to do now what I did 20 years ago, I can’t do it. The banks want everything, and the red tape you have to go through with government, the public service and licensing, it’s just terrible.”
While praising the Government for extending the first-time real estate buyer tax exemption for another five years, Mr McCartney said this incentive was “not new”.
“There was no vision in this Budget in how to grow this economy,” the DNA leader added. “What’s new? He [the Prime Minister] said Atlantis is going to do this, Baha Mar is going to do this, but that was before they became the Government.
“That was coming. There was nothing new. What new initiatives do you have to move this country forward?
“That’s what I found lacking in the Budget; it did nothing to bring new business to the Bahamas, or empower persons living here to advance themselves and give them avenues to advance themselves.”
Warning that the Government had to be careful in imposing new or increased taxes given the weak underlying economy, Mr McCartney said it was “inevitable” that any rises would be passed on to consumers.
“I understand the Government is trying to raise money through these taxes, but we have to look at this picture as a whole,” Mr McCartney told Tribune Business. “The question would be: Is the loss of business going to be worse than the money raised from these taxes you’re going to impose?”
The DNA leader likened the situation to the former Ingraham administration’s 2010-2011 Budget, which both raised Excise tax rates and changed the basis upon which these were levied on the auto industry.
Agreeing that the sector’s tax rates were raised to the point where the ‘law of diminishing returns’ kicked in, Mr McCartney said: “The Government didn’t make any more money because people stopped purchasing those vehicles.”
The DNA leader’s voice is thus added to those who believe the Government may have overreached in the number, and amount, of new and increased taxes it has imposed.
The Bahamas is unlikely to hit its economic and net job creation targets as a result, and many observers feel the Government’s failure to consult and inform some impacted industries in advance has exacerbated the situation.
And he added: “It’s like running the country as a business. If you increase prices here, what effect will that have on clients coming in, business coming in. What effect will it have in the long run?
“Small businesses are the backbone of any economy, I can’t put it any other way. There ought to be incentives for the development of small businesses and for persons to get into business in order to try and boost the economy.”