Prime Minister Dr Hubert Minnis.
By RASHAD ROLLE
Tribune Staff Reporter
PRIME Minister Dr Hubert Minnis said the 2020/2021 Budget his government will issue this month will reflect decisions Bahamians will find painful as COVID-19 and the response to the virus causes the unemployment rate to skyrocket and tax revenues to plummet.
Applications to the National Insurance Board show more than 25,000 people have been laid off or lost their income, he said.
“This number will likely increase,” Dr Minnis said, adding that “the unemployment rate in the near term will likely exceed an unprecedented and extraordinary 30 percent.”
However, he pledged during a national address yesterday that no Bahamian will “go hungry.”
The upcoming budget, he said, will be shaped “to match the unprecedented nature of the times we are living in,” noting that by some estimates, the country’s economy may shrink by 14 to 20 percent this year, “an historic one-year decline.”
“What I will say at that time is that your government will ensure that social welfare allocations are expanded to meet the basic food and other core needs of those economically displaced because of CVODI-19,” he said. “The upcoming budget will provide for the ongoing support of those still recovering from the ravages of Hurricane Dorian. We will ensure that no Bahamians go hungry as we weather the economic hurricane caused by COVID-19.”
“We will not sugarcoat the severity of the circumstances in which we find ourselves. Some decisions we shall have to take will no doubt be uncomfortable and indeed will be painful but we cannot shirk away from making the hard decisions.”
The budget, he said, will also have provisions for expanded capital works and will seek to spur domestic private construction. The focus will be on large and small civil works “so contractors can get as much work as possible to provide jobs and commercial activity in all the islands of our archipelago.”
He said: “These expanded works will bring income to thousands of families in need during this downturn.”
Initial numbers from the Department of Treasury, he said, indicate the tax revenue for April was about half of what was collected in April 2019.
“The entire global economy is in free fall and unchartered territory,” he said. “Even the most powerful and developed countries in the world have entered into a deep recession with very high unemployment and the loss of scores of businesses, especially in services industries like tourism, hospitality and entertainment. The chief economist of the IMF has stated on economic fallout from the COVID-19 virus, ‘the magnitude and speed in collapse of activity that has followed is unlike anything experienced in our lifetimes. This is a crisis like no other.’ The IMF predicts that the economic fallout will surpass that seen during the global financial crisis a decade ago.
“Many of the businesses that closed during the lockdown are not confident they will be able to reopen once the restrictions are lifted. We are facing the stark reality that the vast majority of us have never experienced within our lifetimes…We are going to have to make very tough decisions as a country. I will continue to lay out our economic and financial reality in order for you to appreciate the gravity of the situation we are facing. We must be prepared to do things differently, both in the near term and the long term in order for us to maintain some measures of economic stability in the near term.”
Dr Minnis said of the $120m allocated to respond to COVID-19, some of the money has funded healthcare costs; tens of millions have been paid out to self-employed individuals who do not normally qualify for unemployment benefits; and loans and grants have been provided to entrepreneurs and businesses “to allow them to stay open and keep people employed.”
He said the economic recovery committee he established last month has formed a number of sub-committees, particularly ones for structural reform, Family Island development, healthcare and social capital, commerce, entrepreneurship and next generation youth engagement, agriculture, fisheries and manufacturing, environmental stewardship, labour and education, digitisation and the conceptual economy, tourism and creative orange economy and financial services.
Dr Minnis also called on the Official Opposition to put aside partisanship as his government prepares for its budget delivery later this month.