By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The FNM’s deputy leader yesterday pledged that the new government will not leave Bahamians “high and dry” over commitments made to them by its predecessor, as he warned it may need to be “cut some slack” over the upcoming Budget.

K P Turnquest told Tribune Business it was “going to be very difficult” to ensure the 2017-2018 Budget reflects the new government’s agenda and priorities, given that it is due to be presented in the House of Assembly in less than two weeks.

He emphasised that the incoming government now faced the challenge of meeting the Christie administration’s spending commitments without adding to a fiscal deficit that has remained stubbornly above $300 million throughout the past five years.

Acknowledging that the FNM faced a difficult balancing act, Mr Turnquest, the party’s finance spokesman in opposition, promised it would be fully “transparent” over the fiscal and economic conditions that in inherits.

“I think that with only two weeks to go it’s going to be very difficult for us to do much of anything,” Mr Turnquest told Tribune Business of the 2017-2018 Budget.

“In the next week we’ll have a review of what is contained in there; what programmes are funded and defunded, what the revenue sources and funding look like, and from there potentially make adjustments for the programmes we want to consider.”

The Budget is due to be presented on May 24, ensuring it will be one of the newly-elected government’s first key acts.

Much of the ‘heavy lifting’ and Budget planning will have already been carried out by the Ministry of Finance and other key officials, with spending allocations set for most ministries, departments and agencies based upon revenue projections.

With general elections now frequently being held in May, and voters preferring to vote incumbent administrations out in the last four elections, incoming governments have very little time to put their stamp on the following year’s fiscal agenda.

“This is a critical time and we want to meet our commitments to the Bahamian people as quickly as possible, but at the same time we’ve not got a fully transparent picture of where everything stands,” Mr Turnquest said.

Moving to manage the electorate’s expectations, the FNM deputy leader said it would likely to “be able to roll out” some of its programmes with the 2017-2018 Budget, but others may have to wait until later this fiscal period or even be pushed into 2018-2919.

“On this one I think the Bahamian people are going to have, for want of a better word, cut us a little slack because it’s so late,” Mr Turnquest added.

“But we do promise to be transparent with the Bahamian people, and communicate the state of the economy and government’s finances, so that they fully understand when we do move forward why we are doing certain things, and why we may have to delay certain programmes.”

The Christie administration, in its last Budget, projected that the Government would narrow the GFS fiscal deficit (this measurement strips out debt principal repayments) to just $28 million, or 0.3 per cent of GDP, in its 2017-2018 Budget year.

This target, though, is extremely optimistic given that the extra strain imposed on the Government’s finances, as a result of the $600-$700 million damages inflicted by Hurricane Matthew, is likely to still be working its way through.

Simon Wilson, the financial secretary, earlier this year said the Government believes it can “achieve a balanced Budget” within the next four years, meaning the GFS deficit would be eliminated by 2020-2021.

This is less optimistic than the Christie administration’s last Budget forecast, which projected that the Government would run a $68 million GFS surplus in 2018-2019.

It is now up to the incoming Minnis-led administration to continue the fiscal consolidation programme, which has made progress but much more slowly than anticipate, and determine whether this needs to be accelerated to tackle the $7 billion-plus national debt.

Mr Turnquest, though, expressed particular concern over whether funding has been allocated in the 2017-2018 Budget for the numerous pre-election spending commitments made by its predecessor administration.

“We’re very concerned about the commitments made in the last couple of months and weeks, up until the last couple of days,” he said, “and whether funding sources have been identified, or if they are promises left out there and new government will have to figure it out.

“We are running a recurrent deficit, have a significant debt problem, and don’t want to make it worse. We want to cut back on spending, and do as the previous government promised but never did, which is to use the VAT money to reduce the debt.”

Mr Turnquest warned that it would “be very difficult” to achieve this given the Christie administration’s numerous commitments, which included promotions and salary increases for Royal Bahamas Police Force (RBPF) and Royal Bahamas Defence Force (RBDF) officers; the payment of police officers; the ‘regularisation’ of hundreds of temporary civil servants as full-time; and the fates of numerous persons hired on three-month contracts in the public sector prior to the election.

“The ones of most concern to me are the human resources ones, as they relate to individual Bahamians,” Mr Turnquest told Tribune Business. “It would be unfair for them to be left high and dry. We’re going to see how we can make this work and be fair to all concerned.”

The current forecasts are for the Government to earn $2.245 billion in recurrent revenues in the 2017-2018 fiscal year, with recurrent spending pegged at $2.302 billion, thereby creating a $2.302 billion recurrent deficit.

Another source of potential Budget pressure, though, is the commitments made by the Christie administration to Baha Mar’s new owners in their April 25 Heads of Agreement.

These obligate the Government to resolve the New Providence landfill’s woes, energy supply problems and provide a wastewater treatment plant by year-end 2017.

“These were going to have to be addressed anyway, the landfill and power generation issues,” Mr Turnquest said. “But we don’t want to be locked into any agreement that is unfair to the Bahamian people and puts a burden on us.”