The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Opposition yesterday said it will demand “answers” from the Government on why the “ballooning” national debt is increasing at a much faster rate than its annual fiscal deficits and its continued reliance on borrowing amid record revenues.

Michael Pintard, the Free National Movement (FNM) leader, speaking to Tribune Business ahead of Wednesday’s 2026-2027 Budget, said several pledges in the Speech from the Throne “didn’t ring true” - especially when it came to improving the transparency and financial performance of state-owned enterprises (SOEs) and so-called public-private partnerships (PPPs).

He also argued that the Government “has to explain” the continued growth in its direct debt, which expanded by $704m or 6 percent in the nine months to end-March 2026 to hit $12.473bn, against the backdrop of both the forecast $75.5m fiscal surplus for the current Budget year and record revenue projections of $3.887bn. The latter figure, if achieved, would represent a $1.281bn or 49 percent increase in the Government’s income from the COVID-impacted $2.605bn that it generated in fiscal year 2021-2022.

Mr Pintard, voicing scepticism to this newspaper that the Government will meet its Budget surplus target for the year to end-June 2026, especially given the doubts over whether it will collect the projected $130m from the implementation of 15 percent corporate income tax due to the absence of a collection mechanism, argued that the second Davis administration must explain where the record revenue income has been spent.

“They have a ballooning national debt against the backdrop of collecting extra revenue,” he asserted. “The revenue, compared to previous years, seems to have increased drastically. The question is: Where is that money going?” The $704m increase in the Government’s direct debt for the nine months to end-March 2026 is more than double, some 140.8 percent higher, than the $293m deficit for the eight months to end-February.

These two numbers should be more closely aligned, given that it is largely increases in the GFS deficit that fuel growth in the national debt as the former measures by how much the Government’s spending raises the latter. The substantial jump in the national debt - by almost three-quarters of a billion dollars - during the first nine months of the present fiscal year is also occurring at a time when the Davis administration is forecasting a surplus.

Calling on the Government to explain the discrepancy between national debt growth and the projected deficit reduction during Wednesday’s Budget and the subsequent debate, Mr Pintard also challenged why the Government continues to borrow so heavily despite enjoying record revenue income that is forecast to exceed $4bn in the upcoming 2026-2027 fiscal year.

“The vast majority of projects they are doing are being funded by loans, whether it’s the acquisition of Grand Bahama Power Company or financing roads. They are all loan agreements,” the Opposition leader said. “Clearly, this massive amount of money they’ve bragged about collecting through VAT, the question is where is the money going?

“We don’t expect a surplus. We want an explanation relative to this massive increase in revenue collected yet they have continued to borrow monies for a wide range of things - from the $1.9m and change on feasibility studies for the Afro-Caribbean Marketplace in Freeport to hundreds of millions spent on various infrastructure developments for the Family Islands.

“If you have made tons of extra money, yet at the same time you are borrowing money for almost every major initiative you are doing, what have you done with the VAT receipts. They should give a fulsome explanation on the revenue collected, how it has been disbursed, and what the true debt and deficit numbers are for the country for the last fiscal period,” Mr Pintard added.

“If you look at the numbers from 2021 to the time of the election, the debt they have added is north of $1bn with no major hurricane like Dorian, no COVID that shut down the economy. How does the Government explain the increased debt accumulation yet tells the same old, tired story of meeting an economy under great pressure and reviving it when all that happened was that the economy opened.”

Mr Pintard said the Opposition also has “concerns” with how the Government plans to deliver on its Speech from the Throne pledge that “state-owned enterprises submit binding business plans, with clear performance milestones aimed at reducing long-term dependence on government subsidies”.

“The Government talked about SOEs and they were, in my view, very vague about how exactly they are going to make these enterprises more productive,” he told Tribune Business, referring to the likes of Bahamasair and the Water & Sewerage Corporation.

“What precise measures are the Government going to take to ensure greater productivity from SOEs, and how is the Government going to better manage the reporting of SOEs since it failed miserably when it came to reporting on SOEs and their financial performance. The little that was mentioned in the Speech from the Throne didn’t ring true as they have a miserable record over the last four-and-a-half years.

“They have given, in terms of the amount of funds made available to SOEs, a lot of subsidies and loans. The loans were disingenuous because the likes of the Bahamas Public Parks and Beaches Authority have no means of repaying the Government. These are things the Government is trying to hide. They don’t want the bottom line and balance sheet to be impacted.”

Mr Pintard said the same concerns applied to the Government’s PPP deals, which he again signalled are - in the Opposition’s eyes - simply off-the-books loans designed to keep liabilities off the Government’s balance sheet and from adding to the growing national debt. And he argued that the Government’s large Cabinet, with all 33 Progressive Liberal Party MPs appointed either as ministers or parliamentary secretaries (non-Cabinet), will clamp down on differing opinions within government.

“We believe this government is not interested in transparency and differing views on good governance,” he added. “They are trying to stifle dissent not only within their organisation but also Parliament. Parliament, the legislative arm of government, is being held hostage to the whims and views of Cabinet. It is my view that they have taken the country backwards in terms of having a healthy debate and room for dissent on matters where people see things fundamentally differently.”