DNA: Budget 2019/20 – Much Ado About Nothing
By Arinthia S. Komolafe, Leader Democratic National Alliance
May 30, 2019 - 11:25:29 AM
- Budget communication falls flat
- Government has credibility deficit
- No relief in sight for hurting masses
- Focus on figures at the expense of Bahamians
- Duty reductions will have minimal impact after VAT
The Minister of Finance delivered his third Budget Communication in the House of Assembly yesterday to a nation in desperate need of hope and some positive news. Once again, the Free National Movement (FNM) administration showed its lack of compassion and disconnection from the plight of the masses. The delivery of the communication was both uninspiring and underwhelming, while the extended rendition of shallow pronouncements was painful to watch.
In a communication that fell flat for most Bahamians, the government’s idea of positive news was the continuous reminder that the Value Added Tax (VAT) rate will not be increased again. In the aftermath of a 60% increase in the VAT rate in the previous year, this heartless administration expected nationwide jubilation for choosing not to worsen the financial condition of the Bahamian people.
Bahamians can now confirm that the Democratic National Alliance (DNA) was right in its assessment of the 2018/2019 budget of hardship when we stated that the government would fall short of its revenue projections and the economy would be negatively impacted. The admission by the Minister that the government fell short of its revenue target by hundreds of millions of dollars is testament to the accuracy of our prognosis a year ago.
The government is projecting that the GFS deficit for 2018/2019 will come in at $229 million dollars despite the revenue shortage as a result of spending cuts. We note that this administration was forced to admit that the Minister of Finance’s deficit forecast for the 2017/2018 fiscal year was higher by $105 million dollars. Hence, the government has a credibility deficit when it comes to projections on both revenue and expenditure.
We witnessed another episode of self-aggrandization and pats on the back by politicians who have forgotten that they are not doing taxpayers any favors but rather spending our hard-earned dollars on projects they select. The reduction in customs duties to the tune of $28 million in the face of the massive increase in taxes to the tune of $500 million last year is a slap in the face of struggling Bahamians. A closer look at the reduced tariffs and the affected items for the 2019/20 budget will show that they will have minimal impact on the finances of majority of Bahamians.
It was noted that the deficit is at its lowest in 10 years and the Minister demanded some commendation for this achievement. What he failed to mention is that 10 years ago, the government’s revenue was half (about $1.3 billion less) of what it is today, and total expenditure was $1 billion less than it is in 2019. Hence, within a decade, successive administrations have significantly increased taxes on the backs of the Bahamian people to fund their insatiable appetite for spending and wastage.
The current administration is out to lunch and oblivious to the dilemma of Bahamians challenged to make ends meet daily. They believe that eliminated tariffs on pencils, crayons and sharpeners is worthy of praise while being convinced that several Bahamians have the disposal income to embark on the purchase of new furniture and appliances. This follows a recent international report that notes that The Bahamas is the fourth most expensive nation in the world to live in. While taxes and fees have continued to rise, so have unemployment figures while the income of average Bahamians have remained the same or lowered.
The budget communication perpetuates the practice of the Progressive Liberal Party (PLP) which places the burden of taxation on the poor and the middle class. The pontification on tax fairness is disingenuous when taxes are not based on individuals’ earnings and ability to pay. The current system of governance for special interest groups will not change until there is campaign finance reform in The Bahamas. Until then, he who pays the piper will continue to call the tune and the decimation of the Bahamian middle class will not cease.
The highlight of the show that was the budget communication was the suggestion that the FNM is committed to meritocracy. This follows several conflicts of interest, failure to provide details on spending, appointment of FNM cronies to high-paying jobs, award of contracts to supporters without a transparent bidding process and political interference in government agencies among others.
The DNA will be taking a deeper dive into the numbers within the actual budget in the days ahead and provide the Bahamian people with the key themes from a budget that is anything other than the people’s budget.
Arinthia S. Komolafe
Democratic National Alliance
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