By KHRISNA RUSSELL
Deputy Chief Reporter
IN his ardent defence of the government’s budget of “hope,” Prime Minister Dr Hubert Minnis said his administration made several considerations concerning the value added tax increase but rested at 12 percent after ruling out 15 percent because it would be “too much pain” for Bahamians to bear.
He said the government also looked at doing nothing, along with increasing VAT to 10 percent, but none of these options was sufficient to tend to the present fiscal pressures.
Facing a $400m fiscal gap and realising its credibility as disciplined and prudent fiscal managers was at stake, the government decided on the 12 percent VAT rate, the prime minister said.
Speaking of his personal position on this new budget, Dr Minnis said his conscience tells him the government is doing the right thing for the country and its people whom he loves with all his heart.
The VAT issue has been one of contention for the government with several of its backbenchers indicating they will vote against the amendment to VAT legislation that will make the new 12 percent rate law.
In response, Dr Minnis suggested a vote against the budget would be a “no” vote to the things that would enhance the lives of citizens.
He said anyone who was absent from the vote, which took place last night, would be voting in opposition to the budget, adding the only members of Parliament who would be excused were those admitted to hospital or out of the country on government business. Early in his contribution, Dr Minnis told the House Yamacraw MP Elsworth Johnson has been at home sick, but planned to return to the House just to vote in support of the budget.
Carmichael MP Desmond Bannister is away on government business in China, while Long Island MP Adrian Gibson is also on official business in London.
“The hard reality is that there are very few feasible options available, within the time frame required, to fully address a fiscal gap of that magnitude,” Dr Minnis said yesterday.
“We therefore came to the realisation, that an increase in the rate of VAT to 12 percent was the only viable and reliable option to allow us to deal with all of the fiscal pressures present, while also respecting the requirements of the fiscal responsibility law.
“Mr Speaker, I only want to point out that we would have looked at doing nothing and what impact it would have on our country. That was not an option. We would have destroyed our future generation.
“We would have looked at 10 percent and the result was still not good for the future generation. The result may have been good for us but it was bad for the future. We looked at 15 and that was not an option. That is too much pain for anybody to bear and we looked at 12 and we realised that there were some challenges even with 12 but we know how to overcome those challenges there for we rested at 12 so as to protect our future generations.”
Not making this decision would have rendered the country in a similar state to that of Barbados, Dr Minnis said, a country which has had to suspend debt payments and turn to international lenders for help.
“When we came to office we knew difficult choices had to be made,” he added. “The PLP that was in office before us was the worst government since Majority Rule. The PLP way is for them and them alone. That party has no philosophy or ideology other than this: get the money.
“We do not want our country to spiral to crisis. We do not want devaluation, where people lose the value of their savings and investments. We do not want to be forced by international lenders to fire thousands of public servants as a condition of debt restructuring. We do not want to have to slash public service wages by 10 percent as a condition of foreign emergency lenders.
“There are so many examples in our region of what happens when borrowing gets out of control.”
Before concluding his communication, Dr Minnis seemed to be speaking directly to those members of Parliament who indicated they would vote against the VAT increase tied to the 2018-2019 budget.
“This 2018-2019 budget is not about VAT, rather it is about our future as a people,” he said. “It is about our youth. It is about change, real change for the better.
“This is about retooling restructuring and modernising the public service to make it more efficient and responsive to Bahamian needs. We will bring about public sector reform. It’s about transforming the inner city through the Over-the-Hill initiative and programmes and making economic zones. I repeat it is not about VAT.
“This budget, Mr Speaker, is giving our young people a new start through the self-starter programme which we are moving from $50,000 increasing to $840,000. This budget is about sending those four young ladies who excelled at university of the Bahamas to Cornell, Yale, Princeton and Harvard.
“If you want to sacrifice the future of this country vote ‘no’ to this budget. If you want a better country vote ‘yes’. This budget Mr Speaker is about opportunities for land ownership through the reasonable sale of service lots for young Bahamians. It’s about allowing young people finishing the University of the Bahamas or other universities to purchase land in this country for $15,000, $20,000 with everything. If you don’t want them to have that, vote ‘no’. If you want the young people in this country to own land and to have a better future vote ‘yes’.
“This budget is about creating an environment for young professionals, police, defence force, customs, immigration and correctional officers, nurses and teachers to start their new homes. If you want them not to have their own homes vote ‘no’.
“This budget is about education training for a modern and growing economy. It’s about changing the paradigm shift through affordable education thus providing free education for students desirous of attending BTVI this September and free education for Bahamian students attending the university of the Bahamas in September of next year.”
Dr Minnis also warned employers who hire illegal migrants they will be thrown into prison if caught, adding traffic violations will also be penalised.
The prime minster also said the government plans to build a new court complex and a multi-agency government complex.