Monday, June 3, 2019
By Malcolm Strachan
WHILE the banging on the tables in Parliament in commendation of the deputy prime minister’s 2019-2020 Budget Communication could not completely drown out the sounds of backs breaking all around the populace, many were relieved that no further taxes will be levied on the Bahamian people. Still not yet able to fully appreciate Deputy Prime Minister and Minister of Finance Peter Turnquest’s vision for the country’s finances, a large segment of society still feels the government is tone deaf to the plight of the Bahamian people.
Peter Turnquest is an accountant – a numbers guy. Next to the finance guys, they’re the most reviled in an organisation. He is among those who spend most of their time telling those in the C-suite what they can’t afford to spend. However, while it doesn’t negate the difficulty the majority of Bahamian citizens experience day-to-day, some understanding as to what drives him should be given.
Nonetheless, a less aggressive approach would have given the Bahamian people some breathing room.
When we consider some of the realities experienced by the Bahamian people shown to us in the survey by Central Bank, 50 percent of Bahamians earning less than $30,000 annually is quite concerning. Particularly considering our nation is the fourth most expensive place to live in the world according to a 2019 study by CEO World Magazine. Even more disconcerting is we seem to be climbing on this list of countries known for having the highest costs of living.
Business Insider had The Bahamas ranked fifth on its cost of living assessment in 2018.
Sadly, none of this should come as a surprise as the Minnis administration made it quite clear during their inaugural Budget Communication how dismal the fiscal state of the country was. Proceeding with austerity measures that saw budgets being slashed, contracts not being renewed for local businesses and government employees being let go in droves, the stage was set for harder times.
It was not the land of ‘milk and honey’ we thought the Minnis administration would be leading us to upon assuming office – at least not yet. They told the people it would become much more difficult before things got better. However, while some predicted what would be on the horizon, there was no way to truly be prepared when it actually happened
In last year’s Budget, Mr Turnquest said: “This is a landmark Budget. Indeed, it is arguably the most transformative Budget in the history of our nation. It is a Budget about finally putting an end to past practices of fiscal mismanagement and, instead, adopting an approach to the management of the fiscal affairs of the nation in the manner that they should be managed, that is, in a responsible, transparent and accountable way.”
As if he was budgeting his personal household finances and with seemingly little regard for how low and middle income Bahamians would survive, Turnquest fastened the government’s belt so tight that it nearly cut off circulation in the economy.
This much was indicated by the government falling short of its GDP growth projection for 2018. Rather than the promising 2.2 percent increase originally forecast, the economy only grew marginally by 1.6 percent.
The revenue expected as a result of the increase in VAT from 7.5 percent to 12 percent, as well as the increase in gaming taxes is coming at a slower pace than thought.
Last week, Mr Turnquest revealed government revenue will come in at $2.4bn – some $238m lower than expected. He is, however, especially excited about the government’s reduction of the deficit by $400m against the $661m left by the former administration. With the resulting deficit in the current budget year expected to be about $229m or 1.8 percent of GDP, the deputy prime minister is gushing at this historic achievement.
However, for many Bahamians, they aren’t in a celebratory mood. They’re hungry. They’re unemployed and in despair.
Though sparing the citizenry another bombshell in this year’s presentation, he didn’t necessarily say enough to lift the people’s spirits.
A year later, still stricken with a towering unemployment rate, the nation’s capital – the most populous island - has been the most hobbled. At the epicentre of the country’s joblessness, New Providence sits as the standard-bearer with an alarming 3.4 percent unemployment rate increase since the Minnis administration came to office. One can easily understand why there is little fanfare for the deputy prime minister and minister of finance’s conquest to cut down the deficit and balance the budget.
While people struggle to feed their families and make ends meet, they can hardly consider the long-term benefits of having a balanced budget, let alone praise the government for duty reductions on pencils, furniture and appliances.
The government - Mr Turnquest in particular - holds charge over the country’s finances and will surely be challenged on the government’s fiscal performance last year, as well as what is being projected for the 12 months. There already has been little relent from opposition forces characterising this budget as an abject failure.
Dubbed “a tale of epic failure” by Deputy Opposition Leader Chester Cooper and a “slap in the face” by DNA leader Arinthia Komolafe, Mr Turnquest should have his hands full defending the 2019/20 budget.
Fortunately for the government, there are many within the electorate who are still satisfied with juvenile barbs and the government’s penchant to discredit the opposition on its previous performance. However, that won’t provide the Bahamian people with the clarity we desire that should come from a meaningful debate.
This year will be pivotal for the government. Amazingly, the resilience of the Bahamian people has still left the government with some understanding and support for its approach to handling the “people’s money”. However, we can say with certainty that if there are no signs of an economic rebound and more Bahamians being employed throughout the country, the door will be left wide open for the PLP heading into the thick of campaign season.
And they will have no shortage of ammunition.