THE MID-TERM BUDGET REPORT BY

  THE MINISTER OF TOURISM & AVIATION

THE HON. DIONISIO D’AGUILAR

MARCH 10TH, 2021

Mr. Speaker

I have reviewed the December 2020 Fiscal Strategy Report – all 56 pages of it – and while, as a qualified accountant, I found it quite easy to read and digest, I know, for most people, who have no background or training in reviewing reports like this, it may have been a bit much.

So, Mr. Speaker, for the benefit of my Freetown constituents, let me break it down as I see it.

In 2019, the economy was doing well.  The Government took in $2.4 billion in revenue and spent $2.6 billion, leaving a deficit of $200 million – the lowest deficit in many years. Thank you again East Grand Bahama for a job well done while you held the chair in Finance!

In 2020, with the effects of Dorian and the onset of the pandemic, the Government’s revenue decreased from $2.4 billion down to $2.1 billion and the Government’s spending increase from $2.6 billion to $2.9 billion.  So, revenue is down by $300 million at the same time, spending is up by $300 million that has the effect of growing the annual deficit from $200 million to $800 million.

Now, this year comes along.  The rebuilding of Abaco is underway, far less tourists are coming to The Bahamas due to the pandemic and the effects of all of this is that revenue decreases from 2.4 billion in 2019 to $2.1 billion in 2020 to $1.7 billion in 2021.  Meanwhile, our expenditures increase from $2.6 in 2019 to $2.9 billion in 2020 to $3.0 billion in 2021.

To summarize, this year, we are taking in $1.7 billion, we are spending $3 billion leaving a deficit of $1.3 billion.  An unprecedented deficit, the largest deficit ever, which we all agree became necessary to cope with the ravages that Hurricane Dorian and this once in a century pandemic has wrought on the Bahamian people.
Every country is borrowing heavily to mitigate the effects of the pandemic. The United States, for example, just completed its third stimulus which, this lap, will amount to an eye popping $1.9 trillion.  All Americans making less than $80,000 will be getting a $1,400 check to help stimulate a rebound.  While our Treasury doesn’t have that type of borrowing capacity, governments the world over are borrowing heavily to keep their citizenry afloat.

But, Mr. Speaker, we all know that our $1.3 billion deficit is unsustainable!  You can’t keep borrowing $1.3 billion year after year and not run yourself up on rocks.  So, we have two choices, to reduce this record deficit, either you increase revenue, or you reduce spending, or you do a bit of both.

Let us all agree that it is hard to cut spending, even in the best of times, but especially in the worst of times.  The Government has had to borrow hundreds of millions of dollars to keep its corporations and agencies afloat.  These entities, like Bahamasair, have been so impacted by the pandemic that without way more government support than was ever anticipated, they would have gone under.  The Government has also had to borrow hundreds of millions of dollars to keep civil servants employed and on the same pay, to provide food assistance, income support, unemployment benefits, small business loans, the list is substantial and the amounts substantial too.  No government in the history of The Bahamas has done as much as this government ...TO CONTINUE SEE ATTACHED