DPM brands Opposition as 'the junk bond crew'

By Natario McKenzie

Tribune Business Reporter

nmckenzie@tribunemedia.net

The deputy prime minister yesterday renewed his attack on the former Christie administration’s fiscal management, branding it the “junk bond crew” for overseeing four consecutive rating downgrades. 

K Peter Turnquest, launching an offensive designed to take the sting from opposition attacks on the 2019-2020 budget, accused the prior government of leaving $920m “in unrecorded bills” owed to Bahamian and international vendors.

He provided no breakdown or details to back this number, although he was presumably to the $400m that the Minnis administration borrowed upon taking office in May 2017 to cover what it alleged were unpaid, unfunded bills left behind by its predecessor.

And a key rationale cited by the government for last summer’s 12 percent VAT hike was the need to finance payment of a further $360m in unfunded arrears over a three-year period. That, though, totals some $760m.

Opening the debate on the 2019-2020 budget, Mr Turnquest said: “This is the first budget in the history of The Bahamas that operates within the legally binding confines of the Fiscal Responsibility Act: A law that makes sure the government stays true to its priorities and policies, while handling taxpayers’ hard-earned money in a responsible and transparent way.

“Accordingly, the deficit projected for this budget year will in fact end up being the lowest deficit this country has seen in ten years, with its corresponding ratio marking the lowest deficit-to-GDP ratio this country has seen in almost two decades.  

“Unfortunately, the opposition would not know about these kinds of standards. They are more used to setting records like recording four consecutive credit downgrades and leading The Bahamas to junk bond status on the international credit market.”

Mr Turnquest continued: “Their track record includes $920m in unrecorded bills to Bahamian and international vendors, running up unprecedented deficits and destroying the country’s fiscal health and reputation.

“Between 2012 and 2017, our national economy actually shrank in size from a level of $10.72bn to a level of $10.6bn for a net contraction of $123m. And this despite an increase in the labour force of some 34,000 persons during that period.

“What this data means is that, during their 60-month term in office, their economic and fiscal management succeeded in leaving a legacy of an economy that was producing less goods and services than when they came to office. The economy of the Bahamas in 2017 was, in real terms, smaller than it was in 2012. That is simply unfathomable.”

It is unclear whether Bahamians are starting to be turned off by the Minnis administration’s frequent blaming of its predecessor for all The Bahamas’ fiscal woes, especially since it is now more than two years’ into its term in office.

However, Mr Turnquest asserted that the previous Christie administration had registered an aggregate deficit of just under $2.4bn, or almost $500m per year, during its five years. “To put that in perspective, no prior Bahamian government had even remotely come close to posting deficits on that scale,” he said.

Noting that the former government collected some $2bn from Bahamian taxpayers during the fiscal year 2016-2017, Mr Turnquest added: “No government in The Bahamas had ever pulled in so much tax money from its citizens. Indeed, despite raising over $2bn in revenue off the backs of Bahamian taxpayers, they managed to spend over $2.7bn with nothing to show for it but a mountain of unpaid bills, a frustrated populous and a lethargic economy.  

“Despite the disaster that was their fiscal record - the same record they never reference when speaking about this government - they are now feigning concern over the fiscal health of the country. They are quick to provide advice to us on this side. Where was the opposition’s fiscal hawkishness when they were in government?

“They are an exposed bunch with much to say about fiscal rectitude when in opposition. But when in office, they revert to their true form and proceed to set records in the run up of deficits and debt. I want to remind them that the Bahamian people are on to them and their fake concern and crocodile tears.”

Mr Turnquest told Parliament that the former administration had brought about “four consecutive downgrades and record deficits”, adding: “The Bahamian people have seen what their approach to budgetary matters has led to.

“So, I would ask them to understand that we are not prepared to take any economic, fiscal, political, or governance advice from the very same persons who led the country to four consecutive downgrades and to junk bond status.  On budgetary and fiscal affairs, I am simply not prepared to take counsel from the ‘junk bond crew’.”

Mr Turnquest said the government is open to a consultative budget process “that involves engaging citizens and listening to feedback – from all parties, except the junk bond crew. We are particularly open to receiving input from civil society and other stakeholders when forming our fiscal policies”.