PLP RESPONSE TO LATEST FISCAL SNAPSHOT REPORT
CHESTER COOPER, PLP DEPUTY LEADER, SHADOW MINISTER OF FINANCE
AUGUST 31, 2020
While the marketing department of the Ministry of Finance is to be thanked for yet another colourful fiscal snapshot report, these are of little use to the Bahamian people at this point.
The Progressive Liberal Party is less interested in last quarter’s fiscal performance than it is in examining the current state of the Public Treasury and having sight of this administration’s plan for economic recovery.
Given the severity of the crisis, the information in this report is dated. We are nonetheless examining the numbers closely and will have more to say in due course.
The government’s disastrous mismanagement of the crisis has wreaked havoc on the economy, making it worse than it had to be as businesses have been unable to plan and pivot as quickly as the rules change.
Bahamians continue to suffer, many lacking basic food and shelter as a result of inefficient programs and failed rental assistance program.
We re-iterate our belief that the fear of the economic fallout has, perhaps, surpassed the fear of the virus itself.
Nearly six months into the crisis, it is disgraceful that there is no plan to mitigate the economic fallout from the pandemic and the decisions of the competent authority, and no plan for the future to create jobs or grow the economy.
We have already asked the Treasury Committee for a review of government finances, but have only gotten an evasive answer from the minister of finance.
What we would like to see are the reports of monthly revenue collected and deposits, as well as the balance on the Consolidated Fund and any overdraft facilities.
It is proposed that we examine the actuals compared to projections as well as comparisons to the prior year by month.
We request the Ministry of Finance provide a copy of the most recent report of the Fiscal Responsibility Council as it would have sight of internal Ministry of Finance reports in preparing its analysis.
We remind that this is now legally mandated under the much-touted Fiscal Responsibility Act.
We wish to examine all loan documents signed this year, including the Central Bank’s debt sustainability analysis given its new legislation which limits its ability to lend to the government.
We also would like a review of all facilities with multi-lateral lenders such as the IDB, the CDB and the World Bank.
We further renew our call for a review of the loan agreements and attached conditions of all loans including those executed with the IMF.
As for the fiscal snapshot, we are on record that the management for fiscal affairs over the last three years has been horrendous, even before COVID-19 and Dorian.
We note that the deficit, at $788 million, is roughly 350 percent more than the prior year and almost $110 million more than forecasted in June.
We remain concerned that the government continues to account for the full spending on the Grand Lucayan Resort as an investment not withstanding that it paid much more than the appraised value and spending continues pending a sale.
The government needs to advise the public as to our specific financial exposure on this so-called investment.
The report notes the impact of Hurricane Dorian and COVID-19.
While Dorian is casually used as the substantial reason for missed targets, the people of Abaco and Grand Bahamas still suffer from lack of restoration and not being able to touch, see or feel the impact of the spending.
We decry the lack of restoration in light of the newly projected deficit.
With the one-year anniversary of Dorian tomorrow, there is still salt water coming out of taps in Freeport and no electricity in East Grand Bahama.
Abaco is still in a frightening state and still not fully re-energized.
More must be done for those who have directly suffered through both crises.
Finally, we would point out that on April 10, 2020, we issued a plan to mitigate the economic fallout of COVID-19.
The plan included advice to go to the market early and proactively when the cost of money was low.
The government now appears to be taking this step when the cost of borrowing has increased, one glaring factor being the recent credit downgrade.
We are confident that had the government followed the substance of the recommendations specifically to “go hard and go early” that much of the current uncertainty may have been alleviated.