The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government has “acted on less than 10 per cent” of private sector recommendations submitted to it two years ago, an ex-Chamber chair adding: “The writing’s on the wall.”

Robert Myers told Tribune Business that the Christie administration appeared to have adopted very little of what the Coalition for Responsible Taxation (CRT) had proposed in the run-up to Value-Added Tax (VAT) implementation, apart from its suggestions on the tax itself.

Speaking before the International Monetary Fund (IMF) delivered its latest pessimistic assessment on the Bahamas last week, he said it was “essential” for this nation to boost its flagging GDP growth numbers to avoid a currency devaluation.

Mr Myers added that greater economic growth had to be balanced with continuing fiscal consolidation, meaning that the Bahamas must look to the private sector - not the Government - for job-creating investments and expansion.

He warned that poor governance and mismanagement was “now threatening to collapse” the Bahamas’ fiscal stability, and frustrate a growing youth population that was being “robbed of opportunities”.

“We know why there’s no GDP growth; education and consumer and business confidence,” the former Chamber chairman told Tribune Business.

“Educational achievement is too low, and business and consumer confidence is very low because of employment and everything else.”

He added: “The writing’s on the wall; we’ve got to be smart enough to read it.

“It’s almost two years to the date that we wrote the missive to the Prime Minister from the Coalition for Responsible Taxation, outlining what needed to be done.

“May 27 we wrote that. Less than 10 per cent has been acted upon, although at least they listened to a lower tax rate with no concessions [exemptions].”

That resulted in the broad-based, 7.5 per cent VAT, a model which was again praised by the IMF in last week’s Bahamas assessment for “exceeding expectations” in terms of gross revenues collected.

However, the Fund warned that the Bahamian economy continued to under-perform its potential, and there are virtually zero prospects for greater growth rates in the short to medium term.

Generating greater growth is one of the four ‘pillars’ underpinning the Government’s fiscal turnaround programme, but this - along with spending restraint - has proven elusive.

Suggesting that the prevailing business climate was less than conducive to fostering business growth and investment, Mr Myers told Tribune Business: “Everyone’s just trying to keep their head above water.

“It’s essential that we get those GDP numbers up if we want to avoid the threat of devaluation. And while we get those GDP numbers up, we’ve got to do more fiscal tightening, and more transparency, and move to a more modern governance system.”

Mr Myers, a principal of the newly-formed civil society organisation, Organisation for Responsible Governance (ORG), expressed hope that a more robust US economy would translate into improved stopover tourist numbers for the Bahamas.

He also suggested that “some movement in the Baha Mar standstill”, and other foreign direct investment (FDI) projects coming on stream, would aid the Bahamas’ search for jobs and GDP growth.

However, he warned that ORG’s twin objectives of fostering greater economic growth, and improved transparency and accountability in governance, were likely to be “a long slog”.

“As long as people focus on the right things and don’t politicise it too much, and allow people to try and help, there’s some hope we can improve,” Mr Myers said.

“The youth is especially frustrated, and don’t know why they’re frustrated. They’ve been continually let down by poor governance, poor decision-making, and don’t have a lot of opportunity because of that.

“They’ve had opportunities robbed from them by years of mismanagement in education and everything else, and that mismanagement is now threatening to collapse the financial stability of the country,” he added.

“Our objective as ORG is not to attack any particular group, but move the country forward. The only way that can happen is if the private sector, citizen groups and the Government can work together to change the course and culture of governance.”

Mr Myers also expressed concern that the broad-based, low-rate VAT model was under threat from the Government’s desire to introduce so-called ‘exemptions’.

The Christie administration seemed to largely escape such pressures with the 2016-2017 Budget, which only ‘exempted’ ancillary fees linked to tuition payments from the tax.

However, Opposition leader Dr Hubert Minnis, in a populist gesture, has pledged that the FNM would remove VAT from food and baby-related items if elected to office.

“Now they’re talking about putting concessions [exemptions] in, which is detrimental” Mr Myers said of the politicians. “It’s just a bad idea.

“If you want to deal with concessions, take some of the VAT money and give it to those in need. Take it and manage the VAT money, not force businesses to do so. Making businesses manage social benefits through VAT is not a good idea.”