THE new government has shown its cards.
The Speech from the Throne is more than tradition, it’s a chance to see what the top items on the agenda are for government.
Yesterday showed some ambitious targets. In the face of the ongoing pandemic, getting the economy firing on all cylinders would be a challenge on its own, but to do so while also reducing public revenues by cutting VAT to ten percent is an extra challenge.
No timeline is given on that VAT pledge – which could be disruptive as some hold off major purchases waiting for the drop.
Elsewhere there is talk of tax incentives for small and medium businesses, of a new building code, of an increase in pensions for the elderly and benefits for the disabled community, an increase to minimum wage, more social benefits and more relief measures for Abaco, Grand Bahama and Ragged Island after the storm damage there.
That’s quite a list when you take note of the other news in today’s Business section, that The Bahamas has quite a bill to pay. The country is due to repay $3.65bn in debt by the time the next General Election comes around. This year alone, $900m is due, according to financial agency Moody’s.
As former DNA leader Branville McCartney notes: “Let’s watch the grey on Brave Davis’ head because that’s not a good position to be in for any leader.”
Mr Davis talks a good game about dealing with the challenge. “There’s no time to waste,” he said. “The day of reckoning is here. Problems that were postponed too long must now be confronted. Many of the choices which lie ahead will not be easy ones. But if we have the best interests and the dignity of the Bahamian people as our north star, we will rise to the moment.”
Over at the FNM, Opposition leader Dr Hubert Minnis – who himself suddenly seems to be fighting shy of ruling out continuing as leader if nominated at convention – sounded doubtful about the prospect of the VAT cut.
“They continue to talk about reducing VAT,” he said, “but remember when we spoke about removing VAT off breadbasket items, they thought it was impossible and we did it. But I’m looking forward to them reducing VAT to ten percent, the Bahamian people are looking forward to that.”
There is also the prospect of the extra costs of COVID testing, with Mr Davis continuing to talk about free testing, with the government to bear that cost too.
That’s a lot of costs, a lot of debt, a drop in revenue – and a deficit to somehow balance.
It will be no easy task, but there should be no gloating from other quarters. We got to this point across multiple governments before being hit by the twin hammer blows of Hurricane Dorian and the pandemic.
One way or the other, the bill has come due, and it’s time to settle up.
We wish the new government every success in rising to the moment. Goodness knows we need to.