||Last Updated: Jun 14, 2018 - 11:15:04 PM
2018/2019 Budget Contribution The Leader Of The Opposition Hon. Philip “brave” Davis House Of Assembly Parliament Square, Nassau Thursday, 14th June 2018:
Thank you Mr. Speaker for recognizing me
I rise on behalf of the resilient people of Cat Island, Rum Cay and San Salvador. In doing so, I am reminded of my grandfather’s words. You see, in the days of my youth, there would be three structures on the property – one where we slept, the other was the kitchen, and the other a barn, which housed feed for the animals and produce from the fields.
While we were not wealthy, my grandparents made sure that I did not go to school hungry. He would say, “Ain make no sense going hungry and the barn full.”
While my grandfather was right as usual, the 2018-2019 Budget and the Communication which accompanied it moves me to borrow some opening lines from Charles Dickens’ epic novel The Tale of Two Cities.
“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity,”
It was a time of contradiction then; and it is a time of contradiction now. Mr. Speaker, there are no better words. Here is what I mean.
One could reasonably argue that we were at the brink of the best of times when, in 2017, the Progressive Liberal Party was booted from office. By that time, notwithstanding the travails of Joaquin and Matthew, we had been able to arrest the challenges of revenue growth which we met in 2012. We were able to do so because, after extensive policy reviews and extensive consultations with stakeholders in the private sector and with civil society, we were able to successfully introduce VAT at 7.5%.
Having just introduced this new form of taxation, the Government of the PLP could point to a progressive reduction of the deficit, which I will address further on in my contribution. More importantly, the Bahamian public, after seeing its benefits, had come to accept VAT. While it was not viewed as the best form of taxation, it was something with which they could reasonably live.
Not only did we introduce VAT, in order to address the revenue challenges, we embarked on the most ambitious revenue enhancement efforts in the history of The Bahamas.
The Customs Department introduced online duty clearance and commenced the replacement of the antiquated Customs Automated System with a fully integrated Customs trade portal;
The platform of online application, processing, and payment for Business Licences appreciably improved ease of doing business;
The Passport Office introduced a new electronic system for the administration and issuance of passports;
In Immigration, we introduced a new system for border control and other immigration operations;
We introduced a new Real Property Tax System, which allows for Computer Assisted Mass Appraisals and the online acceptance of real property tax payments; and
We were recognised and applauded for having the first completely paperless VAT system in the Caribbean.
It was the best of times or it was on the horizon as unemployment was trending down and we could look forward to a further enhancement of the labour markets brought about by the opening of Baha Mar on the eve of the election, providing direct employment for over 5,000 persons with related spin-offs in the labour market.
It was the best of times or it was on the horizon as the National Health Insurance was being rolled out.
BAMSI was fully operational and its impact on reducing food cost and providing fresh food for Bahamian families was being felt, especially to those who live in New Providence.
The University of the Bahamas had just been inaugurated as a full-fledged autonomous degree granting institution with a path to much future growth.
The National Training Agency (NTA) was beginning to bridge that very important skills gap that so many young people needed to find sustainable work.
It was the best of times or it was on the horizon as billions of dollars in Foreign Direct Investment were flowing into the country.
We were proud to have seen the completion of the negotiations to resolve the bankruptcy proceedings initiated in the US and for the eventual sale of Baha Mar.
We were pleased to announce the Children’s Bay Cay development in Exuma.
We were pleased to break ground for the construction of the Pointe Hotel here in New Providence.
We were a few weeks short of consummating the sale of the Lucayan Hotel Complex in Freeport, which was needed to give Grand Bahama an essential lift.
We were expecting to see work begin on the Ocean Cay Development (MSC) and the Cruise Port (Carnival Cruise) in East End, Grand Bahama.
We were pleased to deliver the Sovereign Air Space Management Agreement with the Federal Aviation Administration.
The Critical Care Block at the PMH was completed and opened and is now an indispensable part of the PMH delivery of emergency health care services.
It was the best of times or it was on the horizon as the Nassau Airport Development Corporation became a billion-dollar enterprise.
Within our five year term, we were successful in upgrading the capacity of the Royal Bahamas Defence Force to defend our territorial waters and to act as a leading catalyst in times of natural disaster through the Sandy Bottom Project.
We were proud to provide our national flag carrier with a new modern and efficient fleet, which puts it at the cutting edge of commercial aviation.
The cost of electricity was trending downwards.
The educational scholarship programme had been resuscitated giving an opportunity to hundreds of deserving Bahamians.
In a little over a year’s time, a little over twelve months we have descended into the worst of times.
What do we have now?
Why is it the worst of times? Without notice and without consultation, this People’s Time Government has increased VAT to 12% – a whopping 60% and cannot credibly explain why it has to do so.
Why is it the worst of times? The Government says that it met unpaid bills of around $750 million but has gone out and raised $2billion. It is the worst of times because the Government cannot credibly explain what it has done with these borrowed funds.
It is the worst of times because thousands of public sector workers have been let go on the pretext that they were not needed and that it would reduce the wage bill.
It is the worst of times because in over one year in office, the Government cannot point to a single Foreign Direct Investment of any note to the economy – unless of course you count the OBAN fiasco. No mention or provisions made in estimates.
In the short space of twelve months the Government has presided over the steady deterioration of the country’s infrastructure, especially here in New Providence.
In the short space of twelve months, the Government’s hurricane restoration programme is nowhere to be seen and all of the sweet promises to the people of Ragged Island and other affected communities remain just that, empty promises.
Yes, Mr. Speaker, these are the worst of times; and, yes, the Member for Marathon was astute enough to recall the Progressive Liberal Party’s mantra to wipe every tear from every eye. He was right, because this People’s Time Government has the people crying.
The 2018/2019 Budget Communication is truly a landmark Budget Communication. It is the first Budget Communication that provides ample evidence of a fatal flaw within the Ministry of Finance.
The increase in VAT is symptomatic to the disease of mismanagement but not the root cause. The fact is, the root cause is more frightening, pointing to those who have responsibility for the Bahamian people’s fiscal well being inability to manage it in a responsible manner. As a responsible Opposition we cannot support any of the increases which have been proposed. It oppresses the poor and provides for the rich.
Before the Tribune remembered its political allegiance, its 8th June Editorial read in part:
“[T]he Government has stunned the business community by the size of its VAT increase. As a form of taxation, VAT is claimed to be fair because it applies to all and is based on consumption that is deemed to be discretionary. In reality, however, this increase will hit the poor hardest despite the product exemptions.
“Such an increase is likely to stifle growth, undermine business and investor confidence and affect consumer spending since disposable incomes will be reduced; and the experts contend that a recession may follow. Moreover, to many critics the timing could not be worse when there are signs of an economic turnaround.
“It is also strange to impose such a swingeing increase when there has been a substantial upturn in tourism during the first quarter of this year resulting in higher VAT receipts. The Government seems also to have ignored the fact that an economic downturn with consumers buying less will mean a decrease in tax revenue. This then begs the question why the Government would not prefer to bring in a VAT increase more gradually while paying down debt at a similar pace and thus improve the likelihood of balancing fiscal consolidation with the creation of wealth and economic growth.”
I am left to wonder if this Government as a whole has any idea of what a Budget is supposed to do; and I can say, without equivocation, that this
is the worst Budget ever brought to this House in the post-independence era...
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