The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

The Opposition’s finance spokesman yesterday said something was “definitely amiss” in the Government’s fisca; deficit projections, telling Tribune Business: “The numbers don’t jive with what they are saying.”

K. Peter Turnquest said that having reviewed the Budget in detail, he was interested in hearing detailed explanations for the projected GFS deficit.

“When I look at the GFS deficit, which the Prime Minister says is in the order of $150 million, broadly in-line with his projection of $141 million, I don’t get those numbers,” he added.

“If I use the same format that they used in the mid-year Budget to determine the deficit at $157 million, I end up with a $300 million GFS deficit, not $150 as he says.

“If I extrapolate that for the full year I’m going to end up with a roughly $446 million deficit. Something is definitely amiss here. I don’t get the $100 million projected for this year too; it says to me I’m not wrong in my formula but something is amiss.”

The Government has  forecast a more modest pace for fiscal consolidation, projecting a higher $100 million GFS deficit for the upcoming 2016-2017 Budget year compared to its estimates a year ago.

The Christie administration’s projected deficit, equivalent to 1.1 per cent of Bahamian gross domestic product (GDP), is higher than the $70 million or 0.7 per cent that it forecast when delivering the 2015-2016 Budget communication last May.

    Mr Turnquest added: “If you were to consider the GFS deficit and take out Value-Added Tax from the revenue side, you would find that the GFS deficit would be in the order of $700 million. That’s very significant because it says we aren’t doing any better in terms of the overall management of government resources.”

Mr Turnquest said the Government could not deny that VAT’s introduction had produced a slowdown in the economy. “With VAT we have seen negative growth. One can argue that that is tied not only to Baha Mar but these new added taxes,” he said.

“The Prime Minister mentioned that GDP growth was negative due to the soft construction sector. Before Baha Mar’s construction, what were people doing? Was there still not growth, albeit around 1 per cent? Baha Mar should have been a bonus ,not a negative.

“Secondly he   talked about positive growth in the banking and real estate sector. Looking from the banking sector side, you’re bragging about the sector growing, but how are they growing? Banks are making money off interest rates and fees which represents money people are paying.”