Thursday, May 4, 2017
By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
The FNM’s deputy leader yesterday accused the Government of treating the Public Treasury as “a bottomless pit” through its pre-election spending commitments, warning that it had placed the Bahamas “at tremendous risk”.
K P Turnquest told Tribune Business he had already reconciled himself to facing “a total mess” should the FNM win next week’s election, given that the Government’s promises would bind any incoming administration.
He argued that the Christie administration was making numerous commitments the Bahamas “can ill-afford” in a last-minute bid to shore up its support, and secure a win at the ballot box.
Mr Turnquest accused it of defying warnings from the International Monetary Fund (IMF), credit rating agencies and now the Central Bank of the Bahamas, which are all calling on the Government to curb its soaring expenditure if this nation is to narrow its $300 million-plus deficits in the short-term.
“These guys, in the last few weeks, have put this country at tremendous risk with the nonsense they’ve done,” the FNM deputy leader blasted to Tribune Business.
“The Bahamian people ought to hold them accountable. It’s not responsible for the Government to have done the things they have done in the last five weeks. It’s irresponsible.”
Mr Turnquest said he had personally heard more discussions about the risk of a Bahamian dollar devaluation, and of both local and foreign investors seeking to transfer assets, investments and funds away from this nation.
“People are now starting to talk about the ‘D’ word in a significant way,” he warned, “and are also talking about capital risk and flight.
“I’ve already decided, or reconciled in myself, that we will be inheriting a total mess. This government seems intent on its successor being bogged down in all manner of issues. It’s going to be a very difficult year coming up. The Budget will be very difficult to manage, but we will have to be very responsible.’
The Government has effectively embarked on a spending spree leading up to the May 10 general election, without estimating the cost to Bahamian taxpayers or how it will be paid for.
Among the ‘treats’ handed out were the largest-ever promotions exercise at the Royal Bahamas Defence Force (RBDF), with 427 officers promoted this week. This came one day after 851 Royal Bahamas Police Force (RBPF) officers were promoted, and less than a week after the Government pledged to pay long-promised overtime payments.
The newly-released Baha Mar Heads of Agreement also commits the next administration to a massive, multi-million dollar energy and wastewater treatment infrastructure upgrade while relieving the project’s new owner, Chow Tai Fook Enterprises (CTFE), of any responsibility to help finance this.
The Christie administration is also ‘regularising’ 3,000 part-time public sector workers into full-time, pensionable civil servants - a move that will further add to recurrent spending and a $1.5 billion public sector pension deficit.
This comes on the back of a 4,500 net increase in the civil service since it took office in 2012. Mr Turnquest said that while neither he, nor the FNM, begrudged any of these promotions or appointments, the cash-strapped state of the Public Treasury raised serious questions as to whether the Bahamas can afford all this.
“While we applaud these deserving officers’ promotions, we have to be responsible with the taxpayers’ dollars,” Mr Turnquest told Tribune Business, “and recognise this is not a bottomless pit; this is not a piggybank to play with.
“These are people’s lives. I’m very, very concerned about the commitments they’ve made. We have a recurrent debt that’s been increased by the salary obligations added to our payroll.
“I’m very concerned about the lump sum payments coming due, and how we meet those obligations we will find in place. It gives you very little room for manoeuvre going forward.”
The Christie administration has added more than $2 billion to the national debt, the highest sum ever incurred in Bahamian history during a single term in office.
This exceeds the $1.5 billion added to the now-$7 billion national debt by the former Ingraham administration, which was roundly criticised by the then-PLP Opposition for doing so.
The Christie administration’s debt has also been achieved despite the benefit of a $756 million net revenue increase since the January 1, 2015, introduction of Value-Added Tax (VAT).
Mr Turnquest said the Government was effectively ignoring the latest “admonition” by the Central Bank of the Bahamas’, which this week urged the Bahamas to implement “sustained expenditure controls” if it was to meet its medium-term fiscal consolidation targets.
Arguing that Baha Mar’s impact was likely to be “muted” and “delayed”, the FNM’s deputy leader added: “For them to achieve any kind of balance, they need to rein in expenditure. They’ve increased expenditure by 11 per cent every year for the last five years.
“The IMF and the rating agencies have been saying for the last five years that expenditure controls are an important part in the fiscal consolidation plan, but every year we see these increases in expenditure and no real attempt to rein them in.”
Mr Turnquest accused the Government of hypocrisy, saying it had criticised its predecessor for signing contracts in the run-up to the 2012 election, only to now do exactly the same thing - along with temporary public sector hires.
Comments
Well_mudda_take_sic says...
Turnquest would have gullible voters believe a Minnis led administration would rein in government expenditures. Only the most foolish among us would believe that would ever happen. Instead, Minnis would borrow and spend like there's no tomorrow, with enough side-deals to make him and his select few cronies the new super wealthy class du jour. Symonette and D'Aguilar just can't wait to drink from the trough known as the public purse after Minnis refills it with a new round of increased government taxes, fees and borrowings! And "No" I'm not being at all cynical.
Posted 4 May 2017, 3:41 p.m. Suggest removal
DDK says...
"No"?
What does your crystal ball have to say about the violence in G.B.?
Posted 4 May 2017, 4:12 p.m. Suggest removal
Well_mudda_take_sic says...
If it ever got really out of hand, Christie's Chinese friends would help him suppress it.
Posted 4 May 2017, 5:03 p.m. Suggest removal
HarryWyckoff says...
You spout all this stuff with absolutely ZERO evidence, yet you state it as fact.
It is not fact. It is your opinion, and while you are welcome to your opinion, please remember that having an opinion does not
- make it true, or
- make you important or relevant in any way
Enjoy your day!
Posted 5 May 2017, 9:39 a.m. Suggest removal
jujutreeclub says...
Harry all you need to do is listen to what's happening every day with hiring of new employees, promotions, promises to pay owed overtime, signing all kinds of contracts, all the exemptions given to Baha mar, in July there will be a service wide salary increase in the public service as per union agreement, payment of outstanding purchase orders to vendors owed e.g school vendors, the newly-released Baha Mar Heads of Agreement also commits the next administration to a massive, multi-million dollar energy and wastewater treatment infrastructure upgrade while relieving the project’s new owner, Chow Tai Fook Enterprises (CTFE), of any responsibility to help finance this, The Christie administration is also ‘regularising’ 3,000 part-time public sector workers into full-time, pensionable civil servants - a move that will further add to recurrent spending and a $1.5 billion public sector pension deficit,
Posted 5 May 2017, 12:02 p.m. Suggest removal
Well_mudda_take_sic says...
Thanks but in the case of @HarryWyckoff the only evidence good enough for him comes in the form a confession sworn by the culprit(s). Hope he's not holding his breath while waiting for this to happen.
Posted 5 May 2017, 8:21 p.m. Suggest removal
Boydie says...
Well said Harry. This Mud bampot is as annoying as Tally+Strawny
Posted 5 May 2017, 2 p.m. Suggest removal
OMG says...
"Its easy to piss away money" says it all about the PM and the financial mismanagement of this country. The choice for the next government is starkly simple. Drastically reign in spending, reduce the bloated civil service. put a monatorium on promotions and wage hikes and start paying down the national debt. The alternative is a final downgrade, devaluation and greater poverty. And by the way PLP supporters who blindly support this government but refuse to look at the facts will suffer along with FNM and DNA. Our children face a bleak future because it is they who will suffer from these corrupt, inefficient and greedy politicians.
Posted 5 May 2017, 8:22 a.m. Suggest removal
John says...
The US debt is expected to hit **20 TRILLION DOLLARS**before the end of 2017. Most countries around the world are saddled with huge national debts. The Bahamas is not excluded as it has its & BILLION share of national debt. Some feel that the US may never be able to pay off its debt, especially with Donald trump's plan to slash corporate taxes by more than 50% and despite the debt being reduced by 60 Billion during Trump's first 100 days in the white house (obviously some of the policies Obama left in place). Many expect the US Dollar to crash and a return to the gold standard for international trade. Smaller countries, like the Bahamas must be careful on its borrowing habits. Organizations like The World Bank and the IMF are known to come in and loan huge sums of money to countries and then use their influence in those countries to steer government policies, among other things. The president of Nigeria, one of Africa's biggest economies, recently rejected loan offers from certain loan organizations. His preference was to use the countries own resources to finance the various projects that were on the drawing board. Shortly afterwards, President Muhammadu Buhari, took mysteriously ill and died in the UK shortly after. In a small country like the Bahamas where so many of the foreign companies are exempt from a lot of taxes, the tax burden is on the backs of Bahamians and if the country becomes over leverage it will be Bahamians who will suffer.
Posted 5 May 2017, 11:59 a.m. Suggest removal
DDK says...
Concur with everything except "it will be Bahamians who will suffer". Many are suffering now. If these thieves are not removed next week, thanks to their pay-outs, it will become seriously worse almost overnight. You think they are spending now? It's too terrible to think about. Bring on the Red wave! Vote them out!!!
Posted 5 May 2017, 2:22 p.m. Suggest removal
Porcupine says...
John,
You are right on the structural adjustments the IMF and others will make on The Bahamas. And, average Bahamians are already carrying the majority of the debt load. The difference being between the US and The Bahamas is that the US can and does print it's own money to the tune that The Bahamas can't dream of.
To me, the elephant in the room is the web shops.
I have watched the millions upon millions of dollars being sucked out of this small economy. We are impoverishing ourselves with this social scourge and national addition to gambling.
We are destroying ourselves from within.
We can't blame the IMF, World Bank and IDB on this
Posted 5 May 2017, 2:24 p.m. Suggest removal
Well_mudda_take_sic says...
Well put. The devastating economic and social impacts of the gaming web shops on our country and the Bahamian people cannot be emphasized enough.
Posted 5 May 2017, 8:31 p.m. Suggest removal
Gotoutintime says...
The Government will not be concerned about a devaluation---All they will do is refuse to settle their debts!
Posted 5 May 2017, 12:01 p.m. Suggest removal
Emac says...
You people need to understand the tricks of the PLP. They threw these promises out there because no matter what the results are on election day they will have something to rave about. If the FNM wins, then they will be placed in the hot seat and the pressure will be on them to deliver these promises on the date promised. If the FNM does not honour these promises, the PLPs will come with the "ya see if yinna did vote us then ya woulda get what was promise" syndrome. But the PLPers are very good at playing political polka and the ignorant and uninformed Bahamians get played by these games every time.
They know that the Bahamas is broke. Do they care??? Of course not! They are so greedy that they are dying to get in for another round of lavish lifestyles and instant millions, compliments of the stupid Bahamian people, who keep putting them back in power. Once the cookie jar is completely empty and the people have no more money to give via tax, then they their lovers will use all of that money they have stashed away to start a new life somewhere else in the world.
Posted 5 May 2017, 12:12 p.m. Suggest removal
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