The Tribune

By Neil Hartnell

Tribune Business Editor

nhartnell@tribunemedia.net

Governance reformers yesterday urged the government to target any spending cuts in the 2019-2020 budget on areas that have historically “not generated great returns”.

Matt Aubry, the Organisation for Responsible Governance’s (ORG) executive director, told Tribune Business that continuing to support workforce numbers in sectors of the public sector that are underperforming is “not the best use” of taxpayer dollars.

With the budget due to be unveiled in the House of Assembly next Wednesday, Mr Aubry said: “We know the ministries have been working on their budgets, and from what we can tell there’s really been this focus on austerity.

“What we’re looking to see is cuts, if they are there, are focused in on the areas not generating great returns... There’s going to come a combination of appropriate cuts and minimisation of expenditure. If the government is continuing to support staff in areas that have not been performing, that’s not the best use of government funding.”

“The biggest area we see in this strategy is to have a significant effect on government efficiency, and looking at cuts that are appropriate and don’t make us repeat monies that aren’t being spent efficiently.”

The Government’s three-year fiscal projections, though, which were unveiled with the 2018-2019 Budget, show its recurrent or fixed-cost spending being held steady at just over $2.5bn for the three years of its fiscal consolidation plan.

There is likely to be little appetite for significant cut-backs, given the likely political fall-out, as making a significant dent in recurrent spending would almost certainly require the Government to trim civil service headcount and a $738.5m wage bill that is forecast to further increase to over $790m by 2020-2021.

While many observers have argued that small, incremental cuts in the Government’s workforce are necessary to reduce the tax burden on businesses and individuals, Mr Aubry noted that the Minnis administration appeared to have reversed course on its initial pronouncements about letting go persons whose temporary contracts had come to an end. 

Ministers recently revealed that many had been re-hired following the completion of training or placed elsewhere in the public service.

As for any Budget revenue-enhancing measures, Mr Aubry backed the Government’s seeming strategy of targeting loopholes and taxes/fees already on the books that are not being properly collected or enforced.

“What we see on the revenue side is going to be tricky,” he added. “We hope the focus is going to be on areas where the government has not been very successful in getting the taxes that are due, like real property tax and yacht charter fees, and regaining the gaming taxes that were expected.

“Spending as much effort as possible to gain money that is supposed to be ours, we hope, is going to be the focus where they drive a big part of new revenue.” Mr Aubry echoed the warnings of others, though, against any new or increased taxes that might set economic growth and job creation back.

He did, however, praise the Government and Ministry of Finance for pushing ahead to establish the Fiscal Responsibility Council that will advise and oversee the Government’s fiscal affairs. “We’re very encouraged that the Ministry of Finance is sticking to the timeline mandated by the Act and seems to be doing very well,” he said.