From:TheBahamasWeekly.com
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
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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