The Tribune

By RASHAD ROLLE

Tribune Senior Reporter

rrolle@tribunemedia.net

THE Minnis administration has cancelled all international travel for the next fiscal year and eliminated the assignment of red plate vehicles to ministers as part of a broader plan to cut spending, Deputy Prime Minister and Minister of Finance Peter Turnquest announced yesterday.

The practice of providing breakfast and lunch at Parliament will also stop.

“Some 42 out of 58 agencies represented in the budget will see a reduction in their budgetary allocations this year,” Mr Turnquest said.

According to the draft estimates of revenue and expenditure in the annual budget, agencies receiving notable budget cuts include: the House of Assembly, the Department of the Auditor General, the Ministry of Public Service and National Insurance, the Ministry of Foreign Affairs, the Office of the Prime Minister, the Ministry of Finance, the Department of Immigration, the Ministry of Public Works, the Ministry of Youth, Sports and Culture, Ministry of Tourism and Aviation, Ministry of the Environment & Housing and Ministry of Grand Bahama.

For example, the budget for the OPM has decreased by nearly $6 million while the allocation for the Ministry of Tourism has declined by $24 million.

Still, Mr Turnquest said there will be no public job losses at this time. “While there may be headcount reductions due to retirements and expiring contracts for consultants and services, there will be no public sector layoffs,” he said.

However, he said the government has begun discussions with unions to seek their support in pausing increments to permanent and pensionable civil servants and for temporarily suspending salary increases and deferring salary increases attendant to promotion exercises.

“To be clear, the intent will still be to process and grant promotions, as we recognise that some are long overdue. However, the attendant salary increases would be deferred at least until January 2021, when we have a better view of the circumstance. Similarly, any new appointments will happen on an exceptional basis only,” he said.

The administration, which has long aimed to drastically cut subventions to state owned enterprises (SOEs), will accelerate reform of such institutions, he said. Mr Turnquest said SOEs represented an “unsustainable” 16 percent of recurrent expenditure in 2019/2020.

“We have asked all SOEs to implement a mix of cost savings and revenue enhancement measures this budget year,” he said. “As a result, we are budgeting to receive some ten percent, or roughly $21 million in savings from a decrease in subventions to these entities. Over the medium term, it is the intent of the government to further rationalise these entities. The main objective is to push SOEs to become self-sufficient, thereby alleviating the need for the central government to subsidise their operations on an annual basis. To this end, we have targeted a $100 million annual reduction in subvention over the next four years, as these entities move to optimize efficiency and cost recovery strategies.”

Reacting yesterday to the news about its cut in subventions, Bahamasair Chairman Tommy Turnquest told The Tribune: “We recognise that we have to contain cost and actually cut cost so we’re going to look at all those avenues in which we could do so. We think there are some ways we can do so, we have to look at our schedule and make sure sometimes it might be best not to put a particular flight in the schedule, it might be cheaper to have a plane on the ground and say you’re running a plane four legs per day. We have been told the government is only providing subvention to assist with ATR debt servicing. That’s a very onerous loan that’s on Bahamasair. The government at the time didn’t want to provide a government guarantee because they didn’t want it a part of their contingent liability so because of Bahamasair’s financial position, the terms were very onerous and continues to be.”

Asked about the future of Bahamasair employees, Mr Turnquest said: “The government has asked us to retain employees. I represent the shareholder which is the government of the day. We have to be prudent in what we do and Bahamasair operates in a unionised environment so no terms can be changed without consultation with the unions. Truth be told, many of them have recognised we have to work together and it can’t be business as usual. We’ve put together some plans, some of which still have to be discussed with union leadership.”