By TANYA SMITH-CARTWRIGHT
PLP DEPUTY Leader Chester Cooper yesterday accused the government of having no strategy for economic growth nor had put forward any plan for restoration in Abaco, Grand Bahama and Ragged Island.
Mr Cooper’s remarks were in response to the Minnis administration’s 2020 Fiscal Strategy Report tabled in Parliament on Wednesday.
Speaking about that report, newly appointed Minister of State for Finance Senator Kwasi Thompson told the Senate the government’s aim is to slash $100m from both its capital and recurrent spending after 2020-2021 first quarter revenues came in $68m below projections while spending soared.
Senator Thompson said some $75.8m in unplanned COVID-19 public assistance and previous lockdowns have forced the government to target $200m in extra spending cuts over the next six months.
“After familiarising myself with the late, incredibly verbose and sometimes misaligned Fiscal Strategy Report, I have yet to identify a clear strategy for economic growth – which is what the government should primarily be focusing on at this time,” Mr Cooper said.
“What I do see is an administration that once again runs to impose additional taxes on the Bahamian people and further starve capital works that could spur the economy. There is also no real plan articulated for restoration in Abaco, Grand Bahama and Ragged Island.”
Referring to some parts of the report as “hypocritical” Mr Cooper attacked the government’s financial plans during the pandemic.
“The administration that railed against value-added tax then raised it, is now looking to a legalised gaming industry it opposed to shore up its fiscal position,” Mr Cooper continued. “The irony is breath-taking.
“That the government is still talking of cutting expenses and putting finances in order nine months into the pandemic is worrisome. This administration also takes the hypocritical position of wanting to cut $100 million in spending while asking Bahamians to pay more.”
Senator Thompson explained that the cuts were essential to keep the government on track for a record $1.327 billion deficit, as forecast in the May budget. He said for the remainder of this fiscal year and over the immediate term, the government will seek to maintain its current budget deficit target of no more than $1.3 billion.
In these very harsh economic times, Mr Cooper said Bahamians will now also have to change the way their finances are budgeted as they brace for not only an increase in the rates they pay for water, but the frequency at which the bills come. He also attacked the “lateness” of the Fiscal Report.
He continued, “Of course, we hear no talk of taxing the winnings of foreigners who gamble in the casinos where Bahamians are not allowed to play. Increasing fares at Bahamasair (the national airline) will also hurt Family Island residents and impact tourists who wish to visit the Family Islands.
“This report, which has been released outside of the legally mandated timeline, brings no real sense of comfort that we have a clear strategy to restructure and pay down our debt, or identify significant areas of revenue the government could focus on.
“It is the usual politically correct rhetoric for the international community, which has no illusions about the fiscal position of The Bahamas under the management of this current administration.”
Mr Cooper, a businessman and the member of Parliament for Exuma and Ragged Island, was very critical of what he termed the government’s “mismanagement” of both Hurricane Dorian and the COVID-19 pandemic.
“I also call for a detailed accounting of the affairs of the National Insurance Board to whether the government has funded its share of the unemployment assistance via NIB or whether they are borrowing from the social security system,” he said. “We see the term unprecedented being bandied about repeatedly by the junior minister.
“The impact of Hurricane Dorian and COVID-19 cannot be denied, but the government has mismanaged their response to both events and made things worse than they have to be. We acknowledge the government has accepted our recommendation to boost support to SMEs as well as the Infrastructure Fund, but the proof is in the execution.”
Mr Cooper said many of the forecasts in the report “are fanciful” and will need to be further adjusted in January, however, it is unclear what two additional weeks will tell the government what it does not already know.
“A report on progress of digitisation, properly fixing state-owned enterprises, pension reform, PPPs and the IMF’s recommendation on tax reform might do well in inspiring confidence,” he said. “A progress report on the re-established Revenue Enhancement Unit might do the same.
“I again call on the government to establish a debt committee with private sector contributors to manage, renegotiate and restructure debt to create savings and head room in the short term. In terms of the chest-beating over the high level of foreign reserves, we’re pleased that the level is so robust, but maintaining it through the level of borrowing that has taken place is not sustainable.”
He said the PLP, the IMF and others, have asked that The Bahamas produce a credible plan, but it appears that the government still has not.