2015/2016 BUDGET: Deficit slashed by two thirds

As of Wednesday, May 27, 2015

In his 2015/2016 Budget communication on Wednesday, Prime Minister Perry Christie told the House of Assembly that the Bahamas' budget deficit has been slashed by nearly two thirds. He revealed that the government projects a $197 million deficit, down $353 million from 2012.

The Prime Minister also said:

• The nation’s economic growth for 2015 is forecasted at 3.5 per cent and 3.8 per cent in 2016, adding that government revenue is expected to increase by $500 million.

• The government has collected $110m in VAT in the first three months of the year.

• National Health Insurance will be rolled out in phases over a five-year period and will be funded from general revenue collection - not with a new tax.

• Mr Christie also revealed a list of customs duty reductions and some outright exemptions to ease the tax burden since the implementation of VAT. This includes a 65 per cent maximum duty rate on vehicles down from the existing tax of 85 per cent, among other tax breaks.

Don't miss Thursday's Tribune for full Budget coverage.

John 8 years, 10 months ago

A pre election budget or good news for real?

Romrok 8 years, 10 months ago

Pre election, kinda like the immigration stuff that we dont hear much about now.

TheMadHatter 8 years, 10 months ago

Yep - they've been kinda quiet on catching anybody lately. Guess they're handing out passports instead.

killemwitdakno 8 years, 10 months ago

"#• The nation’s economic growth for 2015 is forecasted at 3.5 per cent and 3.8 per cent in 2016, adding that government revenue is expected to increase by $500 million. " Is this what Moody's said?

licks2 8 years, 10 months ago

Where did you see this? Chile pleassssseeeeeeee. . .don't do it!! The only thing is worse than a ninny is a political diehard lying ninny!! You have to be a PLP. . .the only people who know where the growth is happening. Ha ha ha ha ha ha!! Tick Tock Tick Tock. . .the count down to 2017 is on. . .the people got their big stick and Vaseline fer yall. Payback is a beach hey??

killemwitdakno 8 years, 10 months ago

"#• The government has collected $110m in VAT since the start of the year."

Does anyone have any recommendations for the budget? Before they go for a bunch if new stuff.

TheMadHatter 8 years, 10 months ago

The chairman of the Chamber of Commerce has been asking to meet with Govt for the past month - but his request has been unanswered.

Govt thinks that business will just keep making money out of thin air. When the organized boycott comes, they will be surprised.

Currently it is set for July 9th.

banker 8 years, 10 months ago

It is all clever smoke and mirrors folks. Let's look at the numbers here. They have collected $110m in VAT in the first 5 months. If the VATcollections remain on target for the entire year, this represents 41.6667 percent of the total estimated. In other words, they are on target to collect a projected $264 million for the year. Add the $500 million that they say is projected by growth, and one would expect the government revenues to increase by a total of $764 million. If the deficit last year was $550 million (by their own numbers) than they should be declaring a surplus of $214 million. Instead they are declaring a deficit of $197 million?????? That is a difference of $411 million -- 4/5ths of a half a billion dollars. What the hell is happening to that $411 million??

Good news? Hah! Even at face value, here is what Christie is saying "Good news folks -- instead of taking you and your children and your grandchildren's future further in debt by over half a billion dollars, I am only taking you in debt this year by close to $200 million dollars. Applause please! Een that good?". A $197 million dollar debt this year is a hell of a lot of money, and yet they are talking about floating more bonds and loans on BISX which is further debt for the government not accounted for.

So the question you should be asking is, "Where is the missing $411 million going?". These charlatans make me sick.

GrassRoot 8 years, 10 months ago

Banker, it does not matter really. The average Bahamian can neither read nor do math, courtesy our failed Government policies over the past 40 years. The reality is that the real wealth killers in this country are not contained and nothing is being done to do so: 1. public pension obligations, 2. health care cost, 3. poor education. @1. staff needs to be cut, entitlements to be defined, contributions by staff adjusted. @2. The NHI is not working - unemployed people have no money have poor health and all the time of the day to go to see the doctor. The cost of each single doctor visit, medication etc. is not getting reduced by introducing NHI. @3. When in the world is the Government asking China and the Bond Markets to give them money to invest in the school system? This is the only chance for the Bahamians to ever level with development nations on average salary etc. If you keep taxing the ones that have money, but you don't make sure that the ones that don't have money, will ever get money, you are killing the goose that lays the eggs.

ThisIsOurs 8 years, 10 months ago

So..."no new taxes" for NHI huh? I'm just waiting to see what the premiums will be and what "unrelated" tax will be increased. Will NIB go up?

Zakary 8 years, 10 months ago

For those who want an idea of what our situation looks like, check out these graphs.

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

Check out all of the economic indicators and forecasts at the http://www.tradingeconomics.com/baham..." title="Bahamas Economic Indicators">trading economics website.

bigbadbob 8 years, 10 months ago

banker your numbers are out the110 million for vat was 3 months not 5 as you used.

Chucky 8 years, 10 months ago

Real GDP growth has been discussed in many other articles, was projected to be in the high 2% range, perhaps almost 3%, but projections downgraded to 1.5% possibly with Bahamar not opening. Clearly GDP will not expand by 3.5-3.8%, that would be an increase of 280 million at 3.5%. Even if it did, it would likely not be keeping up to the real inflation rate; - notice how much more all the goods you buy are costing each year. Notice goods seem to go up by almost 10% / year - the last few years. So when GDP growth is lower than actual inflation, that is a shrinking economy, which is a recession. GDP = approx 8 Billion! For government revenues to increase by 500 million , that would mean government was going to somehow grab 6.5% more out of the GDP

If the government has collected 110 million in VAT revenues in the first quarter, this equates to approx 440 million in a year. Yet we are still 197 million short of funds in this budget?

Seems to me the picture is very bleak, if we can't balance this years budget, despite a 440 million dollar annual VAT collection / increase in revenue, how on earth can they fund a new health care program?

Where do they expect to collect the proposed additional increase in government revenues of 500 million, or , was this 500 million their projections of total VAT collections for the budget year?

Anyway you slice it, we are completely broke, more than broke when you consider that we have to borrow just to fund the years expenses. A government can no more borrow to fund it's programs than individuals can borrow to support themselves. Just imagine if your own household budget this year required you to borrow $20,000.00 just to eat and pay bills. Your budget next year would be that much more expensive do to your payments on your new $20,000.00 loan.

Face it folks, the game is over, all that's left is for the have nots to starve!

Sickened 8 years, 10 months ago

The have nots are more likely to get shot than to starve.

TheMadHatter 8 years, 10 months ago

the have-nots won't starve - they will just keep making more babies.

BDN 8 years, 10 months ago

Looking at the reduction on duty for vehicles is smoke and mirrors as well. What if you have already paid 75%-85% for the inventory you have now and can't sell before the reduction? Now you have vehicles that are $4-$5 thousand more and are exactly the same! Man o man...

asiseeit 8 years, 10 months ago

The thing is, the common Bahamian will eat this load of horse nanny up, they have no understanding of the economy nor the massive debt this country has looming over our heads. Perry Christie knows this very well, this is why he rambles on so much, he knows he will lose those he is speaking to and therefore can bamboozle them. Smoke and mirrors is the name of the game and an uneducated population by design makes this possible.

ThisIsOurs 8 years, 10 months ago

I just said the same to a friend yesterday. I said there are maybe 20 people in the country who REALLY understand economics Gowen Bowe, Wendy(?) Warren, Rupert Pinder, James Smith, Wendy Craig, John Rolle, Micheal Halkitis (I respect him, but he'll speak party line right now), Hubert Edwards(?), I put Julien Francis on the "iffy" list. Notice the PM is NOT among them, he was just reading words as he normally does and focused on impressing himself with his fakey pseudo British accent.

The whole country needs economics ABC classes (I'm serious) if were to stop this foolishness. What are the elements of a good balance sheet, where are we now in respect to each and what do we need to do to get to the goal. That's a realistic economics discussion for a populace

asiseeit 8 years, 10 months ago

The other major question that should be asked is "is the deficit reduction a result of any government program to reduce spending or is it just because government is fleecing Bahamians with higher taxes?". I would put my money on the fleecing aspect of the question.

Hogfish 8 years, 10 months ago

Has SPENDING been reduced at all ??

Still running a DEFICIT and ADDING to the National DEBT even as you pile more tax on our backs.

I see right thru your bullshit Wutless Perry. And i still see your fatass laughing at us small folk while you get rich and more fat.

The only thing of merit is the $20 mil for a youth program to try and stop our sons killing each other.

BUT we all know this is going to be just like urban renewal where friends and pals get contracts/ handouts and kick backs and NOTHING will get done and there will be no accountability .

SP 8 years, 10 months ago

...................................... Deficit Slashed By Two Thirds ? ....................................................

Two questions immediately come mind:

1) Which government services were cut in order to achieve this two thirds cut in spending?

2) Was more funding allocated than last budget which fell short for repatriation of illegals?

GrassRoot 8 years, 10 months ago

I agree, pretty much every member of the Cabinet had gone public asking for more money over the past months.

John 8 years, 10 months ago

Did Government HOODWINK and BAMBOOZLE small and medium business owners? All along they were saying they did not need an accountant, now they are trying to pass a law that requires all VAT registrants to have their records certified by an accountant. They are now passing laws that require all VAT registrants to file monthly, which will be severely burdensome on small and medium businesses, and persons applying late for business licenses will be FINED (10% surcharge) How HOGGISH can this government get, especially when it comes to business owners? Do they realize the effort that goes into applying for a business license, getting health certificates, bringing national insurance and property taxesup-to-date, and finding the funds to pay for the business license...now an additional 10 percent surcharge after increasing the license by over 300 percent only recently. How many MP has filed their fincal disclosures yet and what penalty is being meeted on them.

Chucky 8 years, 10 months ago

"Normalcy Bias" is one of the favourite tools used by Governments. Simply put, in the case of Government, they play on the fact that people cannot possibly believe that Government would commit any actions against the peoples best interest.

Despite how bad things are, despite all corruption, and even with the average person having conversations about government corruption; people due to "normalcy bias" can not ever really grasp how bad things are, as a result they don't act upon circumstance.
If people could really grasp, absorb, understand, realize etc, the people would march downtown and toss them out of office, physically if necessary!

for those of you not familiar: normalcy bias: (sociology) The phenomenon of disbelieving one's situation when faced with grave and imminent danger and/or catastrophe. As in overfocusing on the actual phenomenon instead of taking evasive action, a state of paralysis.

and anther example definition: Normalcy Bias defined: This is an example of Normalcy Bias, a survival mechanism our brains are equipped with that can place us in grave danger when we’re faced with something traumatic. Simply put, it causes our brains to insist that all is okay. Everything will return to normal. For most of us who have never faced true peril, Normalcy Bias tells us that nothing bad will ever happen. This explains why so many Jews continued living in Germany, even after they were forced to wear identifying yellow stars and discriminatory laws were passed against Jewish people. Life had been so good for so long that, surely, things would get better. Jews who could have easily afforded to move out of the country stayed, and perished as they could not accept the possibility that life would get worse.

proudloudandfnm 8 years, 10 months ago

So the government is getting more revenue. So what? Our government is so damned inept it really doesn't matter how much they make. All they'll do is waste it anyway.

Deficit will be right back where it was in less than 10 years....

Nothing in government has changed, the only thing that's new is VAT. Still the same inept, useless government.....

Zakary 8 years, 10 months ago

For a bit more scope, here is a sample of past GDP Annual Growth Rates (%) up to December 2014, courtesy of The Central Bank of The Bahamas. The ability to see the past trends in our economy makes skipping the fluff in the http://www.bahamas.gov.bs/wps/wcm/con..." title=" Bahamas Budget Communication [PDF]">budget communication easier, and allow for a bird's eye view. You can also check out some calculated projections http://www.tradingeconomics.com/baham..." title="Bahamas GDP Annual Growth Projections">here. This http://www.bahamas.gov.bs/wps/portal/..." title="Bahamas National Budget Documents">section of the government's website also contains revenue and expenditure estimates for those who are interested.

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

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