The Tribune

By SANCHESKA DORSETT

Tribune News Reporter

sdorsett@tribunemedia.net

MINISTER of State for Finance Michael Halkitis last night denied that he has been inconsistent in the accounting of how the money from value added tax is being spent and insisted that the money is being used to “pay down the national debt” as well as defray other government expenses.

In an interview with The Tribune on the sidelines of the Progressive Liberal Party’s national convention, Mr Halkitis also said it is “laughable” to suggest the PLP spent the portions of VAT money on the three-day convention.

On Tuesday, while addressing PLP supporters on the first night of the party’s convention Mr Halkitis defended the government’s implementation of VAT and suggested that the revenue collected from the tax was spent on various state initiatives under the Christie administration.

He has previously stated that this revenue went into the consolidated fund and would count against the national debt.

“We aren’t switching our mouth,” the Golden Isles MP said in response to criticism from opposition members. “I have said over and repeatedly by law and by the Constitution all government revenue is required to go into the consolidated fund. That is VAT money. That is customs money. That is duties and stamp tax, that is real property tax, anything that the government collected goes into the consolidated fund.

“What we have been saying since we introduced VAT, is we no longer have to, because our revenue has gone up, we are no longer running a huge deficit. We chipped away at the deficit. We are making gradual improvements. Every year we are borrowing less and less. Every year we are borrowing, but it is less and less.

“It does go to the debt and eventually we won’t have to borrow money. What I said Tuesday night was I explained that yes VAT is a part of government revenue and it is used to defray the expenses of the government and so in addition what we doing, is because we have more money we are able to provide certain services.

“So we are not hiding the money away, we are using it to give scholarships and build roads and bridges and prepare for (National Health Insurance). It is all very consistent. There is no confusion there is no mix up.”

Mr Halkitis also addressed unfounded rumours that the governing party used a portion of the VAT money to fund the party’s three-day convention.

“Not a dime went into the convention,” Mr Halkitis said.

“This convention is funded by the PLP, the branches pay their dues, the delegates pay their dues and we sell ads in the booklet. The VAT money is public funds that goes into the public trust and you don’t just willy-nilly take it out.”

On Tuesday night, Mr Halkitis said some of the VAT revenue went in preparation for National Health Insurance (NHI).

“We spent tens of millions of dollars on a new Critical Care Block, a new hospital in Exuma, upgrades to health clinics and at PMH in addition to new ambulance fleet. (We) facilitated a new fleet of aircraft for Bahamasair at a cost of $100m. A modern, safe and efficient fleet reduces state subsidies and improves public safety. This builds a modern Bahamas. That is where the VAT money gone.”

Mr Halkitis said tens of millions of dollars were spent on roads, docks and seawalls in Andros, Exuma, Mayaguana, Abaco, Grand Bahama, Cat Island and Cat Island, adding that the government invested in a new fleet for the Royal Bahamas Defence Force at a cost of some $232m to protect our borders and marine resources.

And despite the government borrowing $150m last year for Hurricanes Joaquin and Matthew relief efforts, Mr Halkitis said VAT revenue was used to fund recovery efforts in the aftermath of both hurricanes.