The Tribune

EDITOR, The Tribune.

THE government of the Bahamas finds itself today in a quandary and to the point of insolvency. We have had at least five downgrades in the last four years and we are at the point of another downgrade if the government does not start to collect more revenue to reduce our national debt. Renowned credit rating agencies like Moody’s and Standard and Poor’s are literally at our throats reminding us of or our looming and concerning fiscal state.

The problems that we find ourselves in did not just happen when the Progressive Liberal Party took office in May, 2012. It did not start when the Free National Movement took office in 2007. Nor did it start in 2002. It started over two decades ago.

Successive governments have failed to diversify the economy and their poor fiscal performance has us in a position now where the government feels the need to introduce Value Added Tax (VAT), which they view as an absolute must in order to increase revenue.

Our financial problems are systemic and deeply rooted and we as Bahamians have collectively allowed successive governments to spend our money with no sense of accountability or fiscal prudence. We have had hundreds of projects that were mismanaged; we have countless records of agencies whose funds were misappropriated and an inordinate number of contractors who were paid for uncompleted work and work that did not meet standard.

On November 23, 2011, The Nassau Guardian reported that NEMA could not properly account for $20m in relief money that came as a result of Hurricane Francis and Hurricane Jeanne. The money went unaccounted for under Prime Minister Christie’s first term in office. When asked about it, he said that he presumes a police investigation is going on.

The New Providence Road Improvement Project (NPRIP) was a monetary catastrophic failure by our government where we went over budget to the tune of about $100m. Former Prime Minister Hubert Ingraham, despite being advised to do so, failed to take out a hedge fund to protect against the rise in fuel prices and according to the then Public Accounts Committee (PAC) chairman, he negotiated a clause where the Bahamian people would bear the brunt of all the project’s shortcomings.

The Education Loan Authority has millions of dollars in outstanding receivables and despite an investigation authorised by former Education Minister Desmond Bannister, no one has been prosecuted or fired and I stand corrected on this, but the report has yet to be published.

The present government has spent over $1m on the probe at the National Insurance Board where corporate malfeasance seemed to be the order of the day. The report has been completed, but not released and again no one has been taken to court for possibly misappropriating the Bahamian people’s money.

I want the Bahamian people to realise that the mess we find ourselves in is the result of severe fiscal incompetence by successive governments. There is no arm of government that seems obligated to recoup wasted, stolen and mismanaged public funds. The PAC in my view continues to be a rubber stamp committee because collectively, nothing significant has been done by past and present members to help protect our money and expose politicians and other high-ranking officials who continue to authorise the awarding of contracts without following proper procedure and who continue to rob the treasury without guns.

To give you an idea of how poor our fiscal performance was and still is, on March 20, 2012, The Nassau Guardian ran a story where then Prime Minister Hubert Ingraham said, “The government borrows every month…every month God sends. We never have enough money to pay our bills – never”.

And now the government intends to introduce Value Added Tax, which in my view does not seem to be the best option available at this time. I am of the view that the government does not have the manpower, the willpower or the discipline to implement the proper infrastructure that VAT needs to execute properly.

Basing my analysis on former government performances, VAT will be another programme implanted by the Bahamas government that will have poor execution and there will be no backbone by the powers that be to enforce the law to ensure that everyone pays what they are supposed to pay.

I honestly believe that the easiest and fairest form of tax collection would be to tax everyone’s income, where the rich and the poor would pay the same tax percentage based on earnings. If you made $100 per week and the government decided to tax your income at 3 per cent, then you would pay $3 per week. If you made $1,000 per week, then you would pay $30 per week.

The implementation of VAT in several other countries has not proven effective, so it still baffles me why we have chosen this programme.
VAT will not save the Bahamas from another economic downgrade. We need visionary leaders that will focus on diversifying our economy and encouraging and believing in Bahamian ownership.

Visionary leadership will ensure that at the least a 10 – 20-year economic plan is implemented with strict spending and borrowing guidelines enforced.

We must start to hold our politicians accountable for how they spend public funds and they must ensure that government agencies are routinely collecting taxes and are properly accounting for government resources.

The Bahamian public should not stand for the awarding of contracts to political cronies and we should not allow society’s elite to owe the government tens of thousands of dollars while the powers that be do nothing to recoup our funds.

It is going to take a national effort to get our fiscal house in order, but we must start with the gatekeepers that we continue to put in high office.

DEHAVILLAND MOSS

Nassau,

March 27, 2014.