|
From:TheBahamasWeekly.com Bahamian Politics
Madam President, Once again it is my privilege to be able to stand in this Honourable Chamber and make a contribution to the debate upon the Nation’s Budget. Every budget debate is a contest of ideas. In the annual budget every government is mandated to give an account for its stewardship of the national economy, the quality of life, and the policy decisions they have made, which have either alleviated the challenges faced by ordinary people, or which have made the burden and the suffering of the people worse. No one can seriously expect that the Opposition can overturn the government’s agenda in Parliament; certainly not in a Parliament which has so great an imbalance between government members and the opposition. Notwithstanding this political reality, there is the opportunity to criticize the policy and failings of the government, while also pointing to the possibilities of a better Bahamas. The opposition cannot usually ‘win the vote’, but in the crucible of debate, the opposition can certainly ‘win the voice’! In this Budget as in previous PLP government Budgets we again see an abundance of flowery projections for economic growth; again we hear flowery rhetoric about how ‘soon very soon’ there is going to be a turnaround; yet again, we also see concrete evidence of the continuing failures of the PLP’s promises and policies, their lack of vision, and the increasing suffering being inflicted upon the backs of ordinary Bahamians because of the serious failures of this government. PROTRACTED ECONOMIC RECESSION Madam President, The true test of a government’s success is its management of the economy. Success of failure in this endeavor is the only reasonable measure of success. Every government faces economic challenges and opportunities. How these are managed by governments give the strongest indicator of their fitness to govern. By this test the Perry Christie PLP government has been a signal and miserable failure. Let us look to see the sad reality of four (4) years of PLP mismanagement of the economy. First, a bit of history will put things in their proper context. Let me also state that the estimates of the nation’s GDP are based directly upon the Government’s own figures in the Budget documents (see the Table at Annex B, at page 379 of the “Agenda” which shows GDP in constant prices, ie the real numbers). In September, 2008 the US Housing and Banking markets crashed catastrophically. What we now know as “the great recession’ started. In the six (6) months immediately after that crash the Bahamian economy, like that of the rest of the world plunged into an economic recession. All the economic growth achieved up in 2007 and early 2008, until September 2008, was wiped out. By June 2009 the economy had lost upwards of 3% of GDP. In 2009, the economy contracted by a further 1.5%. However, in 2010, as a result of the policy decisions of the FNM, which involved intensified government grants to assist in business development, the re-education of displaced workers, a new unemployment benefit programme through National Insurance, coupled with direct financial assistance to help distressed persons pay their electricity bills, along with job-creating large scale infrastructural programmes, all these initiatives contributed to economic growth of 1% in 2010. As a result of FNM policies, we had begun the long and arduous task of getting The Bahamas out of the hole created by the great recession. In 2011 Bahamians experienced continuing economic growth as the economy expanded by nearly 2% in real terms. In 2012, again, there was economic growth of roughly 1.5%. What this shows is that the direct impact of the great recession of the Bahamas was a 4.5% loss in GDP between 2008-2010. But, between 2010 and 2012, as a result of the FNM’s policies, the growth in the nation’s GDP was also 4.5%. In other words, by 2012, FNM policies had erased to direct impacts of the great recession on GDP, and The Bahamas was poised for further economic growth, which would have further erased the negative impacts of that recession upon ordinary Bahamians. Improving circumstances in the lives of voters lagged behind the recovery of GDP, as is too often the case. But that’s a reality. Businesses have to feel improvements first, before those improvements can be extended to the working man or woman in the form of increased employment or higher wages. Because the benefits of the economic recovery under the FNM were not being felt by majority of Bahamians, the FNM, despite its best and most sincere efforts, lost the 2012 elections. What has been the economic result of the people’s choice? In 2013, the first full year of PLP governance, the economy contracted and went back into an economic recession. There was negative economic turnout of about 1/3 of 1%. In 2014 the economic contraction continued. The negative economic turnout led to a contraction of the nation’s GDP of about 1.5%. In the 2015-2016 Budget the PLP projected nearly 3% economic growth. This projected economic growth was woefully wrong. In fact, in 2015, there was a further economic contraction of about 1.66%, according to the National Accounts Report of the Department of Statistics. Under the PLP from 2012 to date the nation’s economy has contracted by nearly 4% in Real terms (when the effects of price inflation are discounted). Thus for every year of PLP governance, with their full policies, choices and vision in effect, The Bahamian economy has shrunk relentlessly. A point which does not appear to have been made with sufficient force is simply this…that under the Perry Christie PLP, The Bahamas has suffered from three and a half years of chronic and un-redeemed economic recession! Three straight years of recession, negative economic outturns, and negative results in the job market for too many thousands and thousands of suffering Bahamians, especially and tragically for young Bahamians! The PLP government is toxic, poisonous for business development! The PLP government is toxic, poisonous for job creation! The PLP government is toxic, poisonous for the economic growth and development for our Bahamas! They must go! They must go now! The consequences of this chronic and dismal failure are being felt by ordinary people. Just look at the rates of unemployment. In 2012 May, when the FNM lost the elections, unemployment stood at 14.7%. By 2014 under the PLP it had risen to 15.7%. As of the last report by the Department of Statistics the unemployment rate stood at 14.8%, higher than that of the FNM. We note the delay in releasing the unemployment statistics for May 2016. What horrors will that report disclose? Why has there been a delay in issuing it? BAHAMAR – BAD POLICY DECISIONS LEAD TO BAD RESULTS Madam President, There can be no doubt that the malaise affecting the Bahamian economy is the debacle that the Bahamar development has become. Prime Minister Christie himself has called it “a monument to failure”: Yes, it is a monument to the failure of the Perry Christie PLP and its policies. It is a failure which has had a devastating impact upon the lives of thousands and thousands of Bahamians; many of whom who left good paying and secure jobs, only to be cast into the outer darkness of unemployment and blighted hopes and dreams by the policy mis-management of the Bahamar crisis by the PLP. I have carefully read the two ‘lawyer letters’ tabled in that other place by Prime Minister Christie to justify his policy decision; and carefully read the concluding remarks that the Prime Minister made to the House when tabling the two letters. The letter from the UK Lawyers, Charles Russell & Speechlys seem to be something of an ex post facto justification, couched in ways designed to ‘bahamianize’ the dispute between the developer and the non-Bahamian building contractor and the lender. The letter speaks extensively about the ‘Bahamian creditors and employees” and emphasizes the peril faced by Bahamian creditors. As is well known, the Bahamian creditors are a tiny fraction of the indebtedness. They are unsecured creditors, whose fact is tied largely to the unresolved issue of whether or not this project will ever get off the ground. The elephant in the room was and remains the only secured creditor, the CEXIM Bank and to a much lesser extent, the Government of The Bahamas. The letter speaks about Bahamar ‘having missed 2 completion deadlines’. Curiously nowhere does the letter acknowledge the fact that the missing of completion deadlines was, as is well known, largely if not entirely the fault of the Contractor, CCA. The letter asserts that Bahamar could have petitioned the Court for voluntary liquidation in The Bahamas Supreme Court, and propose a scheme of arrangement to re-organize the debt to the Court’s satisfaction. However, in paragraph 2.4.6 the letter acknowledges that had Bahamar done so in The Bahamas the secured lender CEXIM Bank could still have applied for and would certainly have been granted a Receivership Order. In short the letter acknowledges that if Izmirlian had invoked the jurisdiction of the Bahamas Supreme Court, he would still have lost control of his investment by the appointment of a Receiver at the behest of the lender CEXIM Bank. The letter ‘politically’ couches its views in terms of concern for the interests of Bahamian unsecured creditors. In paragraph 1.4.5 it states: “In addition, the Chapter 11 process could not have bound GOB without its consent, whereas it could bind other Bahamian creditors. It would arguably have been untenable for GOB to advocate the recognition of a process that allowed a debtor to ‘cram down’ the interests of Bahamian creditors…” Note, nowhere does the writer mention that the cramming down would also affect the secured creditor the CEXIM Bank! You see, this note appears to be about couching those developments in the past in ways designed to incite the sympathy of the Bahamian populace…..The government’s actions were all about protecting unsecured Bahamian creditors. This all sounds good. But the writer then proceeds, perhaps unconsciously, to admit that: (in paragraph 1.4.6) “We also provided advice on the possibility of using the court appointed receivership process in The Bahamas, although on balance, the provisional liquidation route was preferred because of the protection from actions by unsecured creditors that S. 193 (of the Companies Winding Up Amendment Act of 2011) afforded. So, there you have it; the TRUTH. Never mind that they now couch their rationalizations as being to ‘protect’ unsecured Bahamian creditors; once the government decided to intervene in a private sector dispute, and to throw its weight behind the interests of CEXIM Bank, and CCA (who by that time had been given approvals for the development of the Pointe, which is now defacing the British Colonial Hotel) well, the Lawyers admit that they advised on the best route for the government to stymie and frustrate those very same unsecured Bahamian creditors!!! The government was advised to apply for a Provisional Liquidator, rather than to apply for the appointment of a Receiver, because a provisional liquidation was the best way to secure (and again I quote) “protection from actions by unsecured creditors”!!! And the government, which now ‘protests too much’ that it sought to protect Bahamians, at that time, followed that advice! So much for protecting Bahamians. Note, the government in fact took advice and followed it to prevent unsecured Bahamians from obtaining relief, by obtaining the Provisional Liquidator. Now they say that what they were trying to do was to protect unsecured Bahamian creditors. Which is it? It cannot be both! Madam President, it gets even worse! In paragraph 2.2 the writer admits: “It is not disputed that the US Chapter 11 process can be a highly effective tool with which to enable a debtor to restructure its affairs in such a way that will ensure its future survival”! My brothers and sisters, this is precisely what the PLP has denied Bahamians. They have denied Bahamians the chance that the Bahamar resort could have been salvaged as a ‘going concern’. What could possibly have motivated the PLP government to intervene in a private sector dispute, having been advised that to do so would inexorably lead to the CEXIM obtaining a Receivership order? It could only have been, in my respectful opinion, because they were ‘vex’ with Izmirlian, embarrassed that he had gone to the US without consulting them, and they were determined to ‘get back’ at him! If the government cannot explain this, they are left in the judgment of right thinking people to have indulged in a silly and childish reaction, dressed up in all those appeals to nationalism, and wrapped down in the flag! But the result has been a total and unmistakable disaster. The Lawyers claim that Izmirlian was only using the Chapter 11 process as a bargaining chip against CEXIM Bank and the Contractor. That much is obvious. They seem to disparage it as such. But Chapter 11 is a bargaining chip with teeth! Bahamar could have been protected and restructured. It could have been kept out of receivership and the total control of the secured creditor! The lawyers also acknowledge that in their negotiations with Izmirlian the CEXIM Bank had a very hard line. They demanded 100 cents in the Dollar. They demanded to be ‘made whole”! So why on earth would the government intervene in a private dispute in a way which inexorable showed favoritism, if not outright collusion, with one of the parties to the dispute, to the detriment to the developer, the man whose vision had brought the project thus far? There is a clear connection between the government’s intervention and the resulting exclusion of the developer from his own development. The letter specifically states, that the Chapter 11 proceeding “was a device…designed to strengthen Izmirlian’s hand in negotiations with CEXIM (etc)” (See paragraph 2.3) and then goes on to say: “The dismissal of the Chapter 11 process resulted in the loss of that hand”. The US court dismissed the Chapter 11 application because the Bahamian Court had invoked sovereign jurisdiction. Pathetically these same lawyers then conclude their discussion of the Chapter 11 process by admitting that they do not have the faintest idea of whether or not Izmirlian had or could access the funding necessary to ground its application in the US. This is sad and pathetic, because they assisted in their advice in preventing the possibility of saving Bahamar as a going concern, and now for nearly a year, twelve months later, we can only see a monument to failure. I assert that the government’s knee-jerk and childishly peevish response has made The Sovereign and Democratic Commonwealth of The Bahamas in effect into an economic Client State of the People’s Republic of China. Here is how PM Perry Christie put it in his concluding remarks to the House on the 22nd June, 2016, when speaking about possible additional economic concessions and further tax incentives: “This is a matter which will require negotiations primarily with new investors in the project, who are yet to be decided by the China Eximbank…”!!!!! That’s right, the CEXIM Bank will decide! Not the Bahamas government. This is a sad state of affairs for which the government must accept full responsibility. It is clear from the analysis conducted by the second Law Firm, the U S Lawyers Hogan & Lovells, that Bahamar had little money and no discernible sources of investment capital to provide the needed “exit financing” to complete the project and to get Bahamar open. They do acknowledge however that if the US Chapter 11 proceedings had continued then the Developer would have had the ability to terminate contracts, such as the construction contract with CCA. It should be remembered that the developer had also sued the contractor for defective work in proceedings in the U.K. Despite this implicit acknowledgement, Hogan & Lovells also do not admit the unassailable fact that the developer had largely been placed in the cash-strapped situation which seems to have provoked the Chapter 11 application, by the failure of the contractor to live up to agreed construction deadlines, or to repair the alleged defective construction as well. So, let’s see, the CCA in effect botched the construction and was unable to complete the work; missing two agreed deadlines, and the developer was placed in an insolvent position as a direct result! The developer then took steps to protect his investment. Steps which offended the government. It is interesting that, unlike the letter from CharlesRussell Speechlys, (the English Lawyers), the US Lawyers do not appear to have been involved in this matter directly or at all on behalf of the Bahamian government at the time when those proceedings were being conducted. This letter is a retrospective review of events which happened in the past. The English Lawyers specifically stated that they advised the government to oppose the US Chapter 11 proceedings. The letter from the US Lawyers does not give any indication that they have first-hand knowledge of anything. They quote form public documents which anyone can get off the Internet from the filings before the Delaware court. They refer to meetings between the developer and the CEXIM Bank, but make it clear that they were not present at those meetings. Here is the conclusion of lawyers who apparently were not directly involved, and who formed their views based upon documents which were apparently supplied to them or which the obtained from the court’s electronic filing systems: “The government recognized last July that the Chapter 11 filings were a tactic employed by Sarkis Ismirlian to improve his negotiating position – by preserving his control over the Bahamar debtors and his ability to cause delays that would become increasingly ruinous for the Bahamian people and economy. Subsequent events have confirmed the correctness of that assessment…” Have they? I ask. Let me change but one word in their comment in order to illustrate the reality. As a result of the government’s decision to intervene we have over the past year faced “delays that (have) become increasingly ruinous for the Bahamian people and economy”! Today, nearly a year afterwards those 2,400 Bahamians, a number of whom left good jobs for Bahamar, and their families, continue to suffer the pain and anxieties of unemployment. The resort remains stagnant. In fact it is so bad that in order to utilize the Convention Centre for the recent IDB global conference the Bank refused to advance the money to complete it, and news reports indicate that the government had to advance about $16 Million to finish the job and to make that convention centre ready for the conference. Today Bahamian creditors who are owed scores of millions of Dollars remain unpaid. Today thousands of Bahamians who looked to receive the spin-off benefits of a revitalized tourism product are standing on the margins and sidelines of the economy! The blame for this atrocious stalemate lies fairly and squarely at the feet of the stupid actions of the PLP government. So you may ask, what should the government have done? Here is my answer. The crisis was caused by the shoddy work and delays of the contractor. The developer faced a financial catastrophe. He took steps in the forum with which his companies had some connection, and which had the best Laws to deal with such a situation; laws designed to keep the business in operation, or enable it to commence. The CEXIM Bank stood in the middle. Like any banker who lends money, it wants to be repaid. The government should have stayed neutral. The government should not have asserted sovereign interest by sending a Deputy Attorney General, a politician, to court to lead the charge to prevent recognition. Let me remind Bahamians of a fact that many have forgotten. When Sol Kerzner purchased Resorts International, Resorts was in Chapter 11 bankruptcy proceedings in the USA. The Rt. Hon. Sir Lynden Pindling did not intervene. He let the private sector work their problems out! He was not heard screeching from pillar to post about the national interest, Bahamian land, a Bahamian hotel development, or Bahamian workers, Sovereignty or any such matters. He let the matter run its course. In the end Resorts stayed open, and eventually a God-send investor, Sol Kerzner, appeared, and today we have Atlantis. I said at the time that in obtaining the provisional liquidation order the government had figuratively put a gun to the head of the Investor. The Receivership order pulled the trigger. The government ‘took side’ in the dispute. I won’t go so far as some as to allege actual “collusion”, but, having taken sides, the government is directly responsible for the result. We are where we are because of the deliberate intervention of the PLP government. So if it takes 1, 2, 5 or 10 years for Bahamar to be completed the blame rests squarely at their feet! VAT – BAD POLICY DECISIONS LEAD TO BAD RESULTS Similarly, with the implementation of VAT we see bad policy decisions which have crippled an already weak economy, prolonging the recession, and inflicting economic hardship and misery upon hundreds of thousands of ordinary Bahamians who have suffered from VAT induced price inflation, and who now have to pay an additional 7.5% on everything. The PLP prides itself upon the successful implementation of VAT. Let us look at the reality of what is happening. VAT has indeed led to a handsome increase in government revenue inflows, of more than $700 Million per annum. In 2013-2014, the last year before the implementation of Vat total government revenue from taxes, non-tax revenue, capital revenue and grants was $1.7 Billion. Expenditure, spending, was $$2.03 Billion, leading to a gfs deficit of $382 Million, according to the Central Bank Quarterly Statistical Digest of May 2016. In 2014-2015, according to the Budget figures at page 88 of the 2016 Agenda for a modern Bahamas, total government revenue for the first full year of VAT implementation was $2.35 Billion. An increase in revenue of $650 Million in one year! Thus, in an economy in the grips of a recession the PLP government has sucked more than $650 Million in additional taxes out of the pockets of businesses, the middle class, the poor and the unemployed. Is it any wonder that, as shown earlier in my presentation, the economic contraction has worsened and become steeper in every year since the implementation of VAT. This year, government tax revenue is projected to rise by a further $200 Million from $2.33 Billion last year to $2.56 Billion this year; an increase of more than $200 Million. Hence VAT will this year suck more than $850 Million more out of the economy than the amount pre-VAT Taxes extracted before VAT was implemented. So, the government has managed to impose a highly regressive tax, which hits the poorest hardest, and in so doing, this year, will squeeze an additional $850 million out of the pockets of poor and struggling Bahamians. Businesses are suffering. Jobs are being lost, and still the government continues to try to dig itself out of debt by digging the hole deeper. The unspoken but understood trade-off was that we would endure the VAT so that the National debt could be reduced to sustainable levels. But under the PLP that has not happened. The most that they have achieved is to reduce what appears to be the rate of growth of the National debt. But the National debt still continues to grow. This is called trying to dig yourself out of a hole! In 2012 the National Debt, according to the Central Bank Report of May 2016, was $5 Billion. In 2013 it had risen to $5.5 Billion under the PLP, an increase of $500 Million. In 2014 the debt had risen to $6.2 Billion; an increase of more than $700 Million that year. In 2015 the debt had risen to more than $6.65 Billion; an increase over the previous year of a further $400 Million. In short, and despite the introduction of VAT the National Debt has been increased in FOUR short years by more than $1.65 Billion! So, in 2012 the PLP criticized the FNM for (in the words of Senator Gary Sands) “spending like a drunken sailor”, because in five years the National Debt had risen by $1 Billion. Yet the PLP has raised the National Debt by a further $1.6 Billion in FOUR years! And they have done so DESPITE the imposition of VAT in 2015! Yes, they did manage to slow the rate of increase of the debt, down to about $400 Million, from the $5-600 Million in years prior to Vat; but the national debt is still inexorably increasing! Even with more than $650 Million in extra tax revenue with VAT, the National Debt is still increasing under the PLP! This is a grievous and serious breach of promise; breach of a solemn commitment to the Bahamian People! It is a gross violation of trust! MORE BROKEN PROMISES The government also promised that with the implementation of VAT there would be reductions in Customs Duty and Excise taxes to compensate for VAT. However, in last year’s Budget the lowered rates were only applied to comparatively few items. The same stinginess is apparent in this Budget. The areas covered in Annex D, starting at page 382 of the Agenda, this year appear largely to be some reductions in the Customs Duties on building materials, plywood, and very slight reductions in the tariffs on some essential food items, such as “prepared” turkey, ham, beef and chicken meat, frozen dinners and ice cream, now reduced to between 20-30%. What is astonishing is that, despite the painfully obvious plight of poor mothers particularly, having to pay VAT on breadbasket items, there has apparently been no consideration to removing this burdensome tax in its most regressive application. I can assure Bahamians that it is a fundamental commitment of the FNM that VAT will be removed from targeted, healthy, and nutritious breadbasket items, and personal hygiene supplies women and children! On the issue of this year’s budgetary concessions, it is astonishing that the tariffs on “prepared … meat” has only been lowered to 20%; but the tariff on the importation of “dead fish and animals unfit for human consumption” has been reduced to “Free”. I must observe that in this Budget the meat of animals for humans to consume is still heavily taxed, but the importation of dead fish and animals not fit for human consumption is free of import duty. Madam President, this item must be explained and fully explained. What exactly is this dead fish and animals unfit for human consumption item? What exactly is an animal not fit for human consumption? Why should such an item be Duty free? Is this “swill” for commercially raised Hogs? Or is this somehow related to Stem cell research? What is this all about? Perhaps someone can explain. LACK OF VISION OR PLANNING FOR THE FUTURE Every Budget presentation ought to outline a clear vision for the future, chart the way forward, and motivate the public to embrace and support that vision. Yet this Budget says nothing about the critical issues confronting our society, such as the targeted development of Alternative energy, particularly Solar energy; the target development of a vibrant Informational technology sector of our economy; and besides the recitation of crime statistics, very little to outline a realistic strategy to reduce the alarming levels of violent crime, particularly Murder. ALTERNATIVE ELECTRICITY The development of economically affordable alternative energy solutions is increasing rapidly. Yet the government has not given any indication for one second how they plan to implement a meaningful strategy to move The Bahamas from the worst form of energy generation, Bunker C, to clean alternative methods of electricity generation. We in the “isles of June” blessed with the most abundant sun and sea resources remain prisoners of out-dated and wasteful electrical generating plants, which have so dramatically and perhaps permanently polluted the Clifton ecosystem. Where is the Ten or Twenty year Action Plan to move to Solar, wind and wave technologies? Recently it was reported that the generative capacity of Solar panels can be increased in tropical climates if they are floated on bodies of water. We have three Lakes in New Providence, including Big Pond, and we have the old Well fields in the Saunders beach and Cable Beach areas. Why are we not exploring the potential of Solar Panels on these bodies of fresh water? Why are we not exploring the potential of placing Solar panels on the flats on the South coast of New Providence? Where is the focused and targeted plan of action to foster and assist the creation of private sector Solar generating Companies who can sell power to the grid, and who could also lower the cost of Solar equipment for ordinary Bahamian households. INFORMATION TECHNOLOGY I have previously made the strong case in this place for the government to invest money in creating an ITC Park. Hundreds of young Bahamians are conducting Internet based businesses, yet they have nowhere to assist them in business start-ups. We have two Industrial Parks largely to support the development of ‘old-style’ businesses. There is nowhere for new business persons in the new ITC industries to receive the same amount or quality of State support. Again I call for the development of an Information Technology & Communications “Park” where new ITC start-up businesses can rent office space at affordable rates. CRIME Again, there is no evidence of any focused strategy to fight crime on the streets; at least not from the mouths of any Minister responsible. It is sad to see that Minister Nottage has become what he criticized Tommy Turnquest as being, a Minister of Statistics. It is clear that something significant must be done to ensure that there is an effective deterrent and an effective punishment for murderers who today appear to act with impunity. What some might consider to have been a rather loose talking threat of extra-judicial executions made by Minister Bell last week is what happened with negative consequences in at least two of our Caribbean neighbours. We as a country do not want for frustration to lead to extra judicial actions. Hence we must devise an effective legal strategy to implement judicial processes to effectively carry out the Death Penalty. Article 17 (2) preserves the death penalty under our Constitution. Laws can be made to correct errors or reform abuses. The FNM will pass a law which makes it clear that the finding of the Supreme Court Judge who actually heard the case that a murder falls into the category of the worst of the worst cannot be challenged in any other court (including the Court of Appeal and the Privy Council). If that Judge, who directly heard and saw all the evidence, observed every witness and considered the verdict of the jury determines that the crime committed deserves the imposition of the death penalty, then some Judge or Panel of Judges who are necessarily far removed from the facts shown and from the trial itself should not have the ability to substitute their differing opinion from that of the trial Judge. We will also pass a law which will state that any delay in the conduct of necessary appeals due to the fault or default of any party, other than the Attorney General of The Bahamas, or any agency of that Government, shall not count towards the five year period within which the Privy Council determined that the death penalty may be carried out if all other grounds of appeal fail. Hence if the AG delays, or the file is misplaced, and no progress is made for several month, that delay will count in time. But if the Attorney for the accused delays in making his appeal, then that time will not count in reducing the five year period of time. These amendments to the Law will in my view go a long way towards reinstituting an effective system of capital punishment for cases which fall within the category of being the worst of the worst. PUBLIC SECTOR & BUDGETARY REFORMS Madam President, In today’s morning newspapers we see that the IBD is not as impressed with the PLP’s budgetary performance and projections as government spokespersons have professed to be. In fact the IDB raises grave concerns that even with the implementation of VAT, much more needs to be done to bring the National Debt down to sustainable levels. We also see an additional news article which deduces that the government has in fact pushed back its deadline to entirely eliminate the gfs deficit by a further period of three years beyond the originally projected deadline. It should be borne in mind that the Debt to GDP ratio remains perilously high at more than 76% of GDP. That is in respect of the total national debt, inclusive of the direct charge and contingent liabilities. We are aware that in his closing budget remarks the Prime Minister sought to couch his references to the Debt ratio in terms only of the direct charge; but that rhetorical device fools no one, least of all the international ratings and financial agencies. The IDB says that governments of The Bahamas have habitually over-estimated revenue and projected rates of economic growth; and habitually underestimates projected expenditure. It is clear that urgent measures must be taken. The first should be to remove the habitual and automatic programming of a 5% across-the-board increase in spending in every Head of expenditure in the budget, all ministries, all departments. A baseline year’s expenditure should be established; and that level of expenditure should be fixed for every department and ministry for the succeeding five (5) years. Only when there is a clear reason to increase the baseline allocation will that be done (ie when the Department of Statistics has to conduct the Census). Any such increase in the baseline allocation will have to be justified specifically. This is one way to begin to programme restraint of public spending into the budget. Secondly, the largest part of recurrent government spending is on salaries and emoluments of the public service. There should be an immediate Audit of every department and ministry conducted under the aegis of the Public Service Commission to review human resource allocation, the dispersal and use of tools and equipment, the deployment of staff and skills levels, and to seek to better deploy and more rationally allocate both human and physical resources, to avoid duplication of efforts, wastage and mis-use or non-usage of government property, tools and equipment. Lastly the Capital Budget should be capped at no more than $200 Million per annum. Thus, a $100 Million for New Providence, and the other $100 Million for Grand Bahama and Family Islands. Should an emergency occur the provisions of the Financial Administration Act might assist, or the government can always bring a supplementary appropriations budget Bill to the House. Madam President, these perhaps radical steps would go a long way toward addressing some very pressing problems faced by our Bahamas.
|
