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Bahamian Politics Last Updated: Feb 13, 2017 - 1:45:37 AM


DNA: Deficit Widens, The Bahamas Sinks Deeper in Debt
By Youri Kemp, DNA Spokesperson for the Economy and Finance
Dec 16, 2016 - 12:46:08 PM

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We are very concerned with the out of control spending being undertaken by this government. It’s as if there is no care, no regard and no restraint to their profligacy and gross mishandling of the public purse.

The DNA is now watching with earnest the rise in spending as a result of Hurricane Matthew and related costs, but we were equally as guarded at this period and time considering that we are in an election year, and this is an electioneering budget and spending was set to increase in any event due to the pledges of this government; whether fully brought to the Parliament or not.


The DNA has made it clear from the onset of the budget communication back in May, 2016 that the government was playing a shell game with the government’s finances. This was before the impact of Hurricane Matthew was assessed and factored into the possible new increases in government spending.

The DNA made note on the “extra” $250 to $300 million that was under-represented in the budget communication by the Minster for Finance in previous occasions, most notably right on the heels of the last budget communication. Now with all of the issues being born to date it appears as if we are wavering near to $500 million by our estimates that will have to be financed or passed-on to the following year’s budget and subsequent years, leaving a new administration with a larger hole in which to dig itself out of.


This deficit-trend and debt-watch was highlighted in the latest Central Bank report where according to officials at the Bank, the data on the government budgetary operations for the first three months of FY2016/17 showed a $23.0 million (36.6%) worsening in the deficit.


The International Monetary Fund shares our views and concerns on this matter as well. In their latest mission assessment they highlighted that “… Further fiscal consolidation, including more determined efforts to rationalize spending, remains critical for rebuilding fiscal and external buffers.” We hasten to add that the fiscal consolidation promoted by this PLP administration has not been fiscal consolidation, but a massive taxation to spend exercise that masks their failure to cut wasteful spending by highlighting statistics that are misleading.


One such glaring example of the higher taxation to wasteful spending statistics-matrix is with regard to what the DNA saw reflected in the IMF’s last Article Four Assessment for The Bahamas, in which we made note that: “In, 2014 this (PLP) administration doubled the average primary deficit recorded between the years 2005 to 2012 from 1.7% to 3.1%, they have got it back to 1.7% and are “projecting” to have it to under 1% in, 2016. All of this was prior to the introduction of VAT, so what this administration had done is substantially increased spending and then put VAT on our backs to cover their wastefulness, and are not telling the public they have the primary deficit percentage back under 2% and receding.”


To bring this into context: Let’s say for example you started off making $20 a week. Let’s also say you borrowed $10 from your sister, half of your pay-check, or simply 50 percent of your pay-check. Now let’s assume that you repaid her just $5 of what you borrowed and still owe her another $5, which you do plan to repay at some later point and time. Let’s say you got a $10 raise and now make $30 a week, of which you still owe your sister $5 before you got the raise and you now want to borrow $15 dollars from your brother, which represents half of your new pay-check, or 50 percent of your new pay-check. You are now not only deeper in debt at $20 total, which signifies 100 percent of your previous salary; but you are reflecting to your brother that you only borrowed half of your new pay-check to him. This is where we are with regard to using misleading statistics to suit our whim and fancy under this administration. 


You cannot pad your way into financial health. You cannot just “shift” costs and debt burden year-on-year and expect no one to really notice, pay mind or not realize that we are in deeper debt than we were before; we will be deeper in debt when this PLP administration leaves office; and we will be worse off as a result, particularly if we are downgraded to junk bond status and the arrangements that this administration has us embroiled in are hard to undo.


We have to change course. We have to change the way our public finances work and we have to change the way we see our financial affairs as a reflection of the way we need to do business in a modern economy. 


The DNA has gone on record to changing the way public corporations work and how they waste our money; we have gone on record with regard to administering proper audits for all revenue generating agencies; we have gone on record with regard to how we manage the influx of investments so we can grow our economy again so we may have something to tax from; and we have most certainly gone on record with regard to punishing persons found mishandling the public’s money.


We are committed to bringing to you the change you need for a better, more modern and healthy economy. We are working and continuing to work in this regard.

Youri Kemp
DNA Candidate for Garden Hills
DNA Spokesperson for the Economy and Finance

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