The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government spent nearly $400m supporting Bahamian households and businesses during the first 21 months of the COVID-19 pandemic, it was revealed yesterday.

The Davis administration’s report on fiscal performance for the first six months of 2021-2022 discloses that some $397m was spent on various forms of health, food, unemployment and business-related assistance at year-end 2021 with the Government now hoping to “wind-up” such aid very shortly.

A further $44.2m was spent on COVID support in the six months to end-December 2021, with the bulk - just over two-thirds - directed to the $100 per week government-funded unemployment assistance initiative. That consumed $29.7m, with the food assistance initiative - which has now been taken back in-house by the Ministry of Social Services - requiring a further $8.8m.

“During fiscal year 2021-2022, government continued the process of winding up its COVID-19 related health containment, mitigation and support programmes for impacted families and businesses,” the report said. “These outlays are estimated at $44.2m and, together with past outlays, brings the aggregate spend to approximately $397m.”

No formal announcement has been made on whether the Government has ceased funding the COVID-19 unemployment assistance, although it had been hoping that the tourism and hotel industry’s re-opening would enable it to cease such support imminently as more persons were employed.

“On the domestic front, labour market conditions continue to improve with the number of persons relying on the National Insurance Board (NIB) administered COVID-19 unemployment assistance decreasing to less than 8,000 persons at end-December 2021, from more than 22,000 during the peak of the programme,” the Government’s fiscal report said.

“Tourism activity, although below pre-pandemic levels, continued to improve with year-over-year increases in stopover and cruise visitors. Firming of the tourism sector ensued from the reopening of international borders and relaxed travel restrictions as compared to the year prior.

“Visitor arrivals totaled 260,942 in October 2021, and 383,706 in November 2021 compared to arrivals in the same period of the year prior. However, comparative tourism indicators remain far below pre-Dorian pre-pandemic levels, accounting for 57.8 percent of October 2019 and 20.5 percent of November 2019 visitor totals respectively.

“Social assistance benefits receded by $46.7m (44.8 percent) to $57.7m, representing 49.8 percent of the budget, primarily driven by reduced COVID-19 induced social economic assistance provided to the public as the country rebounds from the current economic crisis.”

While property taxes received a $9.8m boost from the amnesty that ended in September 2021, the Government’s (taxpayer) subsidies to state-owned enterprises (SOEs) increased by $5.7m or 2.6 percent year-over-year, eating up almost 58 percent of their full-year budgetary allocation.

“Government subsidies, which include transfers to government-owned and/or controlled enterprises that provide commercial goods and services to the public, widened by $5.7m (2.6 percent) to $225m, which equalled 57.7 percent of the Budget,” the Government’s fiscal report said.

“Subsidies to public non-financial corporations were higher by $12.1m (5.9 percent) at $217.8m. Additional transfers of $25.8m were disbursed to the Public Hospitals Authority (PHA) as the country further contests the coronavirus pandemic; $5.1m to Water and Sewerage; and $3.5m to National Health Insurance.

“Subsidies to private enterprises and other sectors fell by $6.4m (46.7 percent) to $7.3m. Transfers dampened by $5.1m for salary grants for independent schools owing to COVID-19 support and $1m for small business support.”

Michael Halkitis, minister of economic affairs, yesterday told a media briefing at the Prime Minister’s Office that the burden placed on taxpayers by loss-making SOEs and their subsidy demands had long been “a vexing issue”. 

He added that the Government planned to “dust-off” a report on how to improve SOE performance that was commissioned by the Minnis administration, and said it would look for savings, better operational efficiencies, the implementation of “best practices” and increased revenues from those that earn income.

However, Mr Halkitis said in some cases a balance needed to be struck between “reducing their burden on the public purse” and the need to ensure essential services continue to be delivered to the Bahamian people.