Response To Nine-month Fiscal Snapshot
Chester Cooper, Exumas And Ragged Island MP, PLP Deputy Leader:
The more fiscal snapshots the government releases, the clearer the picture of failed policy and bad administration by this government becomes.
It is astounding to learn that the government is $1 billon away from its annualized revenue target with only three months left in the fiscal year.
It’s inconceivable that this administration budgeted so poorly.
That value-added tax (VAT) was raised by 60 percent, yet the government is on track to fall short of its forecasted collection by hundreds of millions of dollars is a failure of epic proportions, despite the reported growth in the economy. It is a failure that with three quarters of the year passed, only 63 percent of revenue has been collected.
The minister of finance knows full well that there is no windfall expected in the last few months of the budget year that will get them close to the target amount.
It is clear, and apparent by their own admission, that this administration botched the rollout of the VAT increase and other taxes due to poor modelling, poor implementation, a lack of consultation and politically motivated exemptions.
Whose fault is it that hotels and others were given a grace period to implement VAT because the government failed to understand many of their commitments were made with the understanding that VAT would not be hiked?
The FNM is shamefully piling taxes and fines on the backs of the poor and a struggling middle class to simply appease ratings agencies and the IMF.
The FNM is disgracefully starving capital expenditure and neglecting infrastructure in order to hit a rigid deficit target that no one in this country asked for.
This madness is depriving Bahamians of needed services, all to mask the failure of this government’s revenue collection efforts.
Now the minister of finance suggests that next year, the budget targets are expected to be met. If they were so off with this budget exercise, why on earth would anyone believe they will craft a more realistic budget next year?
What is inherently disingenuous is the full characterization of the Grand Lucayan investment as an equity acquisition. We paid out cash and incurred debt through a mortgage with Hutchison Whampoa to essentially nationalize a hotel that is losing money and that we acquired for significantly more than the reported appraised value.
The sale is nowhere near imminent and will not be complete by the end of this fiscal year. Much of it is an expense, plain and simple. As are the funds associated with running it and separating employees. Only in the make-believe world of FNM accounting does this not count as expenditure and the deficit projection isn’t blown.
Meanwhile, the continuous harping on the deficit to explain government’s fiscal policies is losing its shine.
To top it off, recurrent expenditure is still up by $143 million. It appears that all of the money saved by firing Bahamian workers (in the public service) have still been squandered. We wonder how many had to go without only to have the government spend the money elsewhere.
We thank the government of The Bahamas for this level of reporting. It takes a certain courage to lay bare your failures in this manner.
What a sad indictment on a lost administration.
We will have much more to say on this government’s fiscal failures in the upcoming, legally mandated budget debate.