By NEIL HARTNELL
Tribune Business Editor
A Cabinet minister has admitted that his ministry's payroll was over-budgeted by $2.5m for the 2019-2020 fiscal year and has now been returned to normal levels by the new Budget.
Dionisio D'Aguilar, minister of tourism and aviation, told Tribune Business his ministry had suffered no job cuts even though the 2020-2021 budget showed a 12.5 percent year-over-year reduction in staff salaries from $20.009m in the current fiscal year to $17.499m for the upcoming 12 months.
He explained that the Ministry of Tourism and Aviation's payroll had "just been increased year after year" without any testing and allowance for both retirements and contracts coming to an end, resulting in the overshoot for the current fiscal year that comes to an end on June 30.
"That is not a cut," Mr D'Aguilar said of the wages and salaries reduction. "We were over-budgeted in 2019-2020. We have put the numbers back to where they actually are. We had $2.5m of over-budgeted money in there. There's been no cut-backs with lay-offs.
"I figured that out at the beginning of the year. I assembled the team and asked: 'Where did you come up with $20m? They all went silent. I knew two months into the year that we were over-budgeted. No one tested it; they just tested it year after year, forgetting people are retiring and that contracts are not renewed."
While $2.5m may seem insignificant when set against the 2020-2021 Budget's $1.327bn fiscal deficit, such errors can contribute to spending overshoots - especially if there are multiple ones in the same year. Eliminating such over-budgeting, especially when it comes to fixed costs such as civil service wages, is vital to ensuring taxpayers gain value for every dollar spent as the national debt heads for the $10bn mark.
The $17.499m in wage and salary costs budgeted for 2020-2021 is more in line with the $16.233m allocated to the Ministry of Tourism for the 2018-2019 fiscal year. However, the payroll bill is projected to rise further over the coming two years to hit $20.585m in 2022-2023 - a sum higher than what was provided in the current fiscal period.
Mr D'Aguilar, meanwhile, explained that the Ministry of Tourism's marketing and promotional budget - a key element in attracting visitors back to The Bahamas following the COVID-19 pandemic - had not been slashed by two-thirds for 2020-2021 as is indicated by the Budget line items.
The "Budget book" seemingly shows a 66.2 percent cut to "marketing and promotion" - from $23.26m in the revised 2019-2020 budget approved in February to just $7.857m for the upcoming fiscal year. While this suggests that the ministry's marketing budget has been decimated at a time when The Bahamas needs every tourism promotional dollar available, Mr D'Aguilar said the 2019-2020 number was a "misnomer".
He explained that the $23.26m figure contained monies allocated to various Ministry of Tourism initiatives, such as the 'People-to-People' programme, that had nothing to do with marketing. The 2020-2021 Budget ends this practice by stripping out such spending to give a true indication of what is devoted to promoting The Bahamas, Mr D'Aguilar said.
"It really wasn't marketing," he told Tribune Business of the 2019-2020 figure. "It's a misnomer. This [the 2020-2021 Budget] tells you exactly how much we're spending on development and promotions. Money in there previously really had nothing to do with marketing.
"There are a lot of programmes that the Ministry of Tourism does, and all these other types of services somehow dropped into the marketing and promotions. We broke all that out of there, and put it into 'facilitation and support'."
'Facilitation and support', a new line item for the 2020-2021 Budget, has $7.963m allocated to it. Mr D'Aguilar said combining this with the $7.857m provided for 'marketing and promotion', and $12.054m for 'advertising and public notices', totalled some $27.874m in spending for the upcoming fiscal year.
This compared to $35.11m allocated for the same purposes in 2019-2020, with the minister explaining that the near-$8m reduction corresponded to the 20 percent spending reduction the Government had been seeking to implement across all ministries.
"We were all mandated to cut by 20 percent. There were some reductions that went there," Mr D'Aguilar said. He added that some $8.388m appearing in the Ministry of Finance's budget for the 2020-2021 fiscal year, under the line "operation - Ministry of Tourism" was earmarked to pay monies owed to the cruise lines on the now-ended departure tax rebate incentive initiative. They are also still provided to the ferry companies serving Freeport.
The Ministry of Tourism, meanwhile, has targeted the private aviation, yachting and boating segments as the tourism niches that will open in advance of the rest of the industry on June 15 because they can be more easily controlled and scrutinised. Boat and plane crews, and their passengers, will register electronically before arriving in The Bahamas and thus give health officials ample time to determine their status in advance.
Joy Jibrilu, the Ministry of Tourism's director-general, said marketing The Bahamas' full July 1 re-entry into the tourism market will focus on presenting the nation as a safe, relatively COVID-19 free destination that is a short distance away from a US nation that provides 82 percent of its visitors - especially Florida and the north-east coast corridor.
She added that "in the first instance" The Bahamas will focus on portraying the Family Islands as "designed for social distancing" due to their sparse populations, together with their ability to offer adventure and eco-tourism.
Marketing efforts will also focus on so-called "vertically-integrated markets" such as boating, fishing, diving, weddings and private destinations. Ms Jibrilu added that The Bahamas is "armed" and ready to "step back into the fray of tourism competition" via social media, TV and other electronic and traditional platforms.