By NEIL HARTNELL
Tribune Business Editor
The first-ever fiscal strategy report was yesterday branded “a sea change” that will hold current and future administrations to account for their stewardship of The Bahamas’ finances.
Marlon Johnson, the Ministry of Finance’s financial secretary, told Tribune Business that the Report - tabled in the House of Assembly - will “set the standard” and establish the benchmark against which every government’s fiscal performance can be measured.
Besides complying with the newly-passed Fiscal Responsibility Act’s requirements, Mr Johnson said the report also creates a heightened level of transparency that will enable all Bahamians to assess on a timely basis how the Government is using their tax dollars.
“It is a sea change,” he told Tribune Business. “I hope we see, in the quality of reporting and level of information that it is a real sea change. It truly is a milestone for the professionals at the Ministry of Finance, who produced a real quality report and have set the standard for reporting in the future.
“It requires the Government, going forward, to annually document clear targets related to annual deficit and debt levels. It is a benchmark against which future Budgets will be assessed, and any variations from that will have to similarly be explained to the citizenry.
“As has been seen in Fiscal Responsibility legislation and reporting elsewhere in the world, it does help hold governments to account as to why they have certain outturns and what strategies they took when they saw these things coming.”
The Fiscal Responsibility Act mandates that the Fiscal Strategy Report, which reviews prior year performance and sets out the Government’s immediate and short-term fiscal and budgetary goals, together with a road map for getting there, be tabled in Parliament by the third Wednesday in November every year.
The Minnis administration met this goal, and wrote in the Report: “The coming into force of the Act and the publication of this 2018 Fiscal Strategy Report represent a watershed moment in the history of The Bahamas. It heralds the dawn of a new era of public financial management that is marked by enhanced transparency, accountability and responsibility on the part of the Bahamian Government.
“As explained at the time of the 2018-2019 Budget, given the vital importance of promptly redressing the undesirable state of the nation’s public finances, the Government developed the Budget to be fully consistent with the key principles and articulated fiscal objectives of the Fiscal Responsibility Act, even though it had not yet been enacted.”
Mr Johnson said the Government was looking to the VAT rate increase, together with other Budget measures such as the increased web shop taxation, to drive revenue growth together with enforcement and collection initiatives.
This, he added, will involve “minimising tax evasion, minimising smuggling, and doing those things to collect revenues on the books”. Spending will be “kept within the Government’s target of 20 percent of GDP” by stricter oversight from the Ministry of Finance of all other ministries, agencies and departments.
Mr Johnson said there was “a high level of comfort” within the Ministry of Finance that The Bahamas’ economic growth projections will be met, notwithstanding internal pressures resulting from increased taxes and higher energy costs, and global forces impacting the financial services industry.