By NATARIO McKENZIE
Tribune Business Reporter
nmckenzie@tribunemedia.net
The Government may be two to there years away from achieving an annual Budget surplus, a Cabinet minister asserting yesterday: “You don’t go from a deep hole to a surplus in one year”.
Addressing the House of Assembly on a resolution to borrow $33 million from the Inter-American Development Bank (IDB), Michael Halkitis, minister of state for finance, spoke to concerns over whether Value-Added Tax (VAT) revenue was being used to lower the national debt.
Mr Halkitis said: “You don’t go from a deep hole to surplus in one year. It’s not as if the Government is in a balanced position. It’s not like we have this pile of VAT money and that should go straight to the debt.
“We are in a deficit position. We are in a hole, a deep hole. The VAT revenues are beginning to get us out of this hole, and we believe that if we continue to administer and improve in our administration, we will eventually get to the point where we do have a surplus. But that is, from our calculation, two or three years away.”
As for the $33 million IDB loan, Mr Halkitis said the funds will be used to address the public sector’s capacity to monitor priority projects and programmes more efficiently and effectively; the Government’s ability to collect data and produce quality statistics; public financial management and public fund allocation; and the modernisation of the public procurement system.
Describing it as a five-year programme, Mr Halkitis said: “It will help us in the allocation of public resources, ensure that we get value for money, track our expenditure and ensure that we receive maximum benefit.”
He added that out of the $33 million, some $18 million will be invested in public financial management.
“This will include investment in an IT system. The system that is is in use now dates back to the early 1990s. Also included is training, and a key part of this component is providing a linkage between the Treasury and the Department of Public Service,” said Mr Halkitis.
The programme’s final component, according to Mr Halkitis, will allocate $6 million to upgrade the public procurement system.
“That will ensure that when the Government buys goods and services, we get maximum value for money,” said Mr Halkitis.
Comments
John 8 years, 3 months ago
OIL PRICES may fall below $20.00 by the middle of this year. Sanctions have been lifted against Iran to allow that country to start selling oil, and other countries are refusing to cut back on oil production. That coupled with alternative forms of energy has led to an oil glut so much so that there may not be $100 barrels of oil in 20 years. This is the time for government (yes Bahamas Government) to grab the bull by the horns and set BEC right. This is a once in a life time to pay off BEC's debt and to renovate and restructure its plant and equipment. But what happens thus far? A "so called" management company is brought in, and rather than get a grip and wrap their arms around the situation and start to make things right, and less costly for Bahamians, they seem to have dug a hole, gone underground and disappeared ( with some $900,000.00.) And Bahamians remain overburdened with unbearably high costs of electricity, and the resulting high costs of living, and total uncertainty as to energy costs and supply in the future, near and far. The only concrete thing Bahamians has learned thus far is that bonds will be floated to pay off BEC's debt and the consumers (who are paying) will be made to bear the burden of these bonds. So what is happening to the $700 million BEC is saving each year through the reduced costs of fuel, the single largest cost to that corporation?
Economist 8 years, 3 months ago
Hang on, in 2013, when explaining why you needed VAT, you said that you had a recurrent deficit of $290 million.
You say that VAT income will be $250 more than you expected ($300 million) so you collected an additional $550 million this year so you should already have a surplus.
So tell us how much of our money you have wasted?
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