The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

The Government does not expect Hurricane Joaquin to have any major impact on its Value-Added Tax (VAT) revenue projections, a Cabinet Minister yesterday conceding that the “silver lining” was the absence of damage on the Bahamas’ most-populated islands.

Michael Halkitis, minister of state for finance, indicated that the Category Four storm’s effects were instead likely to be felt on the Budget’s expenditure side, with the Government incurring unplanned spending to replace infrastructure and public assets.

Speaking with Tribune Business at the opening of the annual conference and symposium of the Caribbean Institute of Certified Management Consultants (CICMC), Mr Halkitis said: “If there is one silver lining, so to speak, it is that the islands that were devastated, Crooked Island for instance, do not have a huge economy.

“In terms of major economic activity, that has not been disrupted, and that is sort of the silver lining. For example, if that storm had come through New Providence we would have had major economic disruption.”

Mr Halkitis said Joaquin’s real impact would likely be felt in the Government’s efforts to repair and replace infrastructure. “We don’t expect that in terms of the returns that we would see any significant impact,” he added of revenues.

“The impact comes on the other side where we have to spend money to recover and rehabilitate.” Mr Halkitis added that the Government continues to see good compliance from VAT registrants.

He said the Government must first complete an assessment of the damages caused by Joaquin before determining the likely repair cost.

“I think the Government has already began to move to bring some normalcy,” Mr Halkitis said. “The public has responded already, but the Government is also bringing some relief in terms of temporary housing until the full assessments are made, and then we can talk about the rebuilding phase and getting the infrastructure back in working condition.

“If there was a coastal road, for instance, we have to look at whether this is the time to move that infrastructure more inland to be able to withstand future storms. We have to put a cost to it and then we put a timetable. Then we look at how we are going to have to finance it.”

Mr Halkitis said that while the Government would have to give careful consideration to how it replaces infrastructure in the damaged Family Islands, he did not agree with the idea of population resettlement.

“I don’t subscribe to this idea of resettling out of the islands. We do have to look at issues, for example if the road is on the coast and every time time there is a storm surge it washes out the road. In our planning maybe we consider moving those main roads further in,” he added.