OPPOSITION STATEMENT IN RESPONSE TO MID-YEAR BUDGET
Chester Cooper, PLP deputy leader, Shadow Minister of Finance
27 February 2019
What we saw and heard this morning was a minister of finance desperately struggling. The mid-year budget communication was a collection of useless words and delusional predictions.
The real story of this budget exercise is one of significant revenue shortfall, a knee-jerk, ad-hoc reaction to further curb spending on our already crumbling infrastructure and public services to meet its arbitrary deficit target.
We have warned this administration for months that its VAT increase, its Gaming Tax increase and it’s dismantling of the Revenue Enhancement Unit were ill-advised and poorly executed.
It is now on the record that an arrogant lack of consultation with VAT stakeholders, the hotel industry and the construction sector among them, have led to what will be a significant revenue shortfall.
The government’s agenda to bully and erode the wealth of the Bahamian- owned legal gaming industry has also fallen flat.
Further, running the revenue enhancement unit instituted by the former administration through the shredder has proven to be folly.
All of this shows a failure of this Government. We heard nothing today to inspire confidence.
At half-year revenue collections are only 38% of annual projections, down against projection despite the painful 60% increase in VAT.
This government has not yet put another unit in place and the $80 million in lost revenue it promised it would capture, was just another empty promise.
This amounts to around a $200 million shortfall by the government’s own calculations.
We suspect, at the end of the day, it will be an even greater shortfall and the deficit prediction will be missed.
Now, this administration would seek to further starve capital expenditure that would help Bahamian contractors and small to medium sized business owners.
Meantime, vendors cannot get paid and schools remain in need of desperate repair as the government boasts of how much cleaner the books will be.
The minister sought to gloss over the dire news of the latest unemployment report as the reality on the ground belies any boon for the self-employed and the most disadvantaged among us. No amount of spin will fix this.
This mid-year statement, like the budget itself, is an example of a government operating with head and no heart.
The potential projected GDP growth is good news. And while it has little or nothing to do with this administration, we restate that it matters not if the Bahamian people cannot feel the growth in their own lives, in our own pockets.
In fact, the foundation of this growth is PLP’s projects mainly Bahamar and the Pointe.
The government now seeks to beg for applause from the Bahamian people for simplifying requirements for smaller businesses, while narrowly avoiding ruin after having just repealed its own badly thought-out policies with regard to business license filing requirements.
This statement was an admission of failure by the government, which appears to remain committed to its disastrous policy of hitting an IMF-dictated deficit target without regard to the human cost. It appears this administration is managing for the IMF and ratings and not the Bahamian people.
We look forward to further analysis of the appropriations to see exactly where Hubert Minnis and the FNM will inflict further pain on the Bahamian people in a vain effort pretty the books and protect their fragile egos.
We will have more to say next week in the debate on the mid-year communication.