By AVA TURNQUEST
Tribune Chief Reporter
IN DEFENCE of the government’s fiscal performance this term, Deputy Prime Minister Philip Davis yesterday dismissed criticisms levelled by former Prime Minister Hubert Ingraham as complaints from an “alternative universe”.
Mr Davis claimed that Mr Ingraham was “missing the spotlight”, suggesting that the former leader’s comments were motivated by the pain of watching his successor - Dr Hubert Minnis - “wander around in a fog of incoherence”.
Latching onto Mr Ingraham’s admission that the country was still grappling with the effects of the Great Recession when his party left office, Mr Davis questioned how the former Free National Movement (FNM) leader could find “the nerve to complain about how it was rescued?”
“The reality is quite simple,” Mr Davis said, “the FNM left the economy on an unsustainable path. In 2012, the government was spending over $500 million more than it was collecting.
“Without the implementation of VAT, billions would have been added to the national debt - an unmanageable amount, which would have left our country unstable and vulnerable to requiring IMF bailouts and restructuring, like Jamaica.
“Ingraham knows this better than anyone,” Mr Davis continued, “it was his Cabinet who was told so by the IMF.”
Mr Davis added that it was left to the Progressive Liberal Party to clean up the mess, insisting that only his party had the courage, maturity, and capacity to execute the roll-out of Value-Added Tax. He stressed that the VAT roll-out was “one of the smoothest on record”.
He pointed out that the government’s plan reduced the deficit by 80 per cent by the 2016/2017 fiscal year and attributed the current fiscal setback “mainly to expenses associated with two devastating hurricanes, Joaquin and Matthew”.
Mr Davis explained that the storms cost the government hundreds of millions of dollars in post-hurricane repairs, financial assistance to those affected and temporary suspension in taxes, including VAT, on a number of items.
Mr Ingraham criticised government’s lack of transparency over the economy this term during an interview on Bahamas at Sunrise, which aired on ZNS on Monday.
The former Prime Minister said that public concerns over the national debt and VAT would be eased by greater transparency. Mr Ingraham said while VAT was “sold to the public” as a means of paying down the government’s debt, it was just a revenue raising measure.
Yesterday, Mr Davis said the country’s finances were “a matter of law and fact - real facts, not FNM alternative facts”.
“The Constitution of the Bahamas requires that all revenue sources, whether from VAT or other taxes or duties or fees, must go into a general fund called a Consolidated Fund,” he said.
“Every year the government holds a budget debate that is televised live, and then puts the budget online. The process is open and transparent.”
He added: “The stability from VAT has put the Bahamas in a position to borrow when we need to, so we can help people after disasters like hurricanes.
“And VAT has allowed the Bahamas to do new things that couldn’t be done before, like add hundreds of new officers to our police and defence forces.”
Mr Davis said: “This government has always administered public finances according to settled law. If anyone in the FNM knows of any violation of any law governing the administration of public finances, they should stop talking to the press and start talking to the police.”
“They won’t, of course, because there’s been no wrongdoing,” he added.
“It cannot be that the Central Bank was transparent up until December, 2014, and for some mysterious reason, it ceased to be transparent on or after January, 2015, when VAT was implemented.
“That is an illogical and deceitful proposition of the worst kind.”