The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

An outspoken QC has accused the Prime Minister of “mixing apples and oranges”, arguing that the Government’s obligation to finance infrastructure and social services in east and west Grand Bahama “has absolutely nothing to do with Freeport”.

Fred Smith QC, the Callenders & Co attorney and partner, told Tribune Business that the Government should not mix/combine Freeport’s impact on the Public Treasury with that of the areas outside the Port zone.

He was responding after Prime Minister Perry Christie, during the Cabinet meeting in Freeport, implied that he wanted the Port area to contribute more revenues to help finance the Government’s obligations in the rest of Grand Bahama.

Mr Christie suggested the Government wanted Grand Bahama to contribute more to the Public Treasury’s fiscal receipts, adding: “The Cabinet discussed this morning the question of whether the Government of the Bahamas contributes more to Grand Bahama than it receives in revenue from Grand Bahama.

“Given that we concluded that is the case, a discussion was raised on how we can more effectively and efficiently create a new paradigm toward ensuring policies that will bring about a resurgence of the economy of Grand Bahama that we can now anticipate.”

Mr Christie is not always easy to decode, but his words will possibly seized on by the likes of Mr Smith as evidence that the Government is planning a ‘tax grab’ on Freeport, using the leverage provided by the expiring tax incentives - which have been extended to February 2016 - to amend the Hawksbill Creek Agreement and its tax regime.

“He is mixing apples and oranges because he is not distinguishing between Freeport and the rest of Grand Bahama,” Mr Smith told Tribune Business in response to the Prime Minister.

“There should never be any problem [in Freeport] because the Hawksbill Creek Agreement provides for the Port Authority to repay to the Government any excess expenditure plus a 25 per cent upside.

“There should never be an issue. The Government must be supremely ignorant of the Hawksbill Creek Agreement to allow a situation to exist where Government expenditure exceeds government income in Freeport. That should absolutely not happen.”

Mr Smith was referring to the Hawksbill Creek Agreement clause that mandates the Grand Bahama Port Authority (GBPA), if government revenues from Freeport are less than its expenditure in the city in any given year, to make good the difference plus pay a sum equivalent to 25 per cent on top.

The QC said he had been informed by successive GBPA chief financial officers that this clause had never been acted on, as the Government’s revenues from Freeport always exceeded its spending.

“Infrastructure obligations in east and west Grand Bahama have absolutely nothing to do with Freeport and the Port Authority,” Mr Smith told Tribune Business.

“The Government has an obligation to the citizens outside Freeport, but it cannot mix expenditure and income in Freeport with revenue and expenditure outside Freeport.

“One is apples and one is orange. Government cannot mix them. That does not work. I call on the Government to give a break down, no more secrets, as to how much it collects in revenue in Freeport and how much is spent, and what is collected outside Freeport and what is spent outside Freeport in Grand Bahama.”

Mr Smith said that without such a break down, residents and stakeholders in Grand Bahama would be unable to contribute to any debate and consultation on the issue.

“I call on the Prime Minister and Minister of Finance to disclose to Freeport and Grand Bahama accurate figures over the last 15 years of income and expenditure in the city of Freeport and outside Freeport, and stop mixing apples and oranges,” the well-known QC told Tribune Business.

“It’s all smoke and mirrors and political gimmickry and jokiness for the Prime Minister to say this is a big problem.”

Mr Smith also questioned the Government’s negotiations over a draft Heads of Agreement with Carnival Corporation for a new cruise port for the line in east Grand Bahama.

“How utterly ridiculous is that when the current cruise port is not working,” he asked.