Monday, November 25, 2019
EDITOR, The Tribune
Your Editorial comment of Thursday, the 21st November, was informative in that it laid out the serious fiscal situation facing Bahamian governments as we continue to grapple with increasingly devastating Atlantic hurricanes.
While the media was curiously dismissive of the link between the last government’s fiscal woes and another category 5 hurricane, it is nonetheless positive (though not surprising) that, with the FNM in power and facing a similar weather-related fiscal situation, the media’s approach has been more constructive.
On present models, climate change will continue to fiscally challenge Bahamian governments of whatever party. It will, as you rightly state, require a departure from the ordinary ways of thinking if we are to maintain our historical record as a well-managed country with modest levels of public debt. Revenues generated from traditional sources (i.e. regressive consumer taxes on the poor) will not be sufficient.
However, it is hoped that your reference to the present oil-exploration activity being conducted by a company known as BPC does not reflect a serious suggestion that we pivot for revenues toward the very carbon industries that are blamed for the global warming that sent us Dorian.
Apart from being the last thing our environment needs, it was frankly embarrassing to see our Prime Minister run off to the UN claiming that we are innocent victims of a carbon-energy assault on earth’s climate, only to return and get busy approving oil exploration projects.
As for the Guyanese example, while I wish that unfortunate country well, it is difficult not to conclude that getting into the oil business in 2019 (when the US is a net energy exporter and there is an international upsurge in renewables-based technologies) is akin to getting into the horse and carriage business in 1919, when production of Ford’s Model T was in full swing. We will see.
The last thing we should want or need at this point in our national development is to sully our lands or seas with the muck of the dying oil industry.
As to the suggestion that ‘unshackled’ foreign investment will somehow heal our fiscal woes, it is worth considering that, with a population of under 400,000 souls, we received foreign investment inflows of $947 million, or about $2,700 per person, last year (a bad year for us). That places us among the highest per capita recipients of FDI on earth. It is long past time that we stopped the rush for numbers and became more discriminating instead about what kinds of investments we seek and permit – as the OBAN fiasco vividly demonstrates.
The Bahamas has sufficient investment inflows, a sufficiently small population and (crucially) a large enough economy to absorb the fiscal shocks associated with Atlantic hurricanes without a crisis every few years.
The elephant in the room is neither the need to sell out to the environmentally disastrous oil industry nor to join a race to the bottom for even more foreign investment, especially if the latter involves dismantling the protections of Bahamianisation. Rather, it is to bring our revenues in line with our GDP per capita by moving toward a sensible, progressive policy on taxes.
We can no longer afford to run our country on a narrow and inflexible revenue base that disproportionately taxes the poor and brings in no more than 18 percent of GDP in revenues. Nor can we afford to indulge the wealthiest individuals and corporations by foregoing taxes on income. It is a luxury that no country that is serious about its development can afford.
It really is that simple.
ANDREW ALLEN
Nassau
November 22, 2019
Comments
ColumbusPillow says...
"carbon industries...that sent us Dorian" is a most telling statement revealing that the author has no science background, particularly geoscience and botany.
Firstly "carbon" or CO2 constitutes a miniscule 0.04% of our atmosphere. It has very little to do with affecting climate..Note that Nassau rests on 20,000' of carbonate rocks, 50% of which is CO2
Secondly CO2 is not a pollutant, IT IS PLANT FOOD. Reduce CO2, no plants and no oxygen generation and no life on this planet!
Thirdly, renewable power from solar panels and windmills cost twice what fossil fuel power costs,NO COUNTRY CAN SURVIVE UNLESS IT HAS ACCESS TO CHEAP POWER.
Enough fear mongering!
Posted 25 November 2019, 10:44 p.m. Suggest removal
Porcupine says...
ColumbusPillow,
Water is also essential to life. Yet, we all understand that too much of anything is good for nothing. Unless you are purposefully dumbing down your comments to appeal to a wider audience, there is little to suggest that you are either informed or knowlegable on this matter. Quit your lies about renewable energy. Solar is economically competitive, today, especially in The Bahamas, where we are paying astronomical rates. What is being discussed here is not fear mongering. Mr. Allen is making a point regarding taxation. Did you miss that? Clearly, you are still in primary school. Do your parents know you are still up, when you should be in bed?
This is a critical point in human history, especially regarding the continued existence of The Bahamas as a country. Please do some studying Columbus. We need everyone on board to help in dealing with this crisis in a sane, intelligent and cooperative manner to succeed. You, apparently have no science background if you honestly think that the only consequence of higher levels of CO2 is that there is more plant food. Do you not read? I am being serious. Why don't you order Uninhabitable Earth by David Wallace-Wells and read it. And, continue reading scientific publications and you would soon realize that most all scientists are alarmed with the data coming in now. "NO COUNTRY CAN SURVIVE UNLESS IT HAS ACCESS TO CHEAP POWER." Am I to believe that you work for the fossil fuel industry? Because honestly, these are the last hold outs to eliminating fossil fuels in our world. The coal and oil industries, by their own studies over 40 years ago, KNEW that burning fossil fuels was warming the planet. Yet, they continued to mislead the world, just as you are doing now. You say, "enough fear mongering". I say, enough mendacity and stupidity ColumbusPillow. Plant food? For God's sake!
Posted 26 November 2019, 6:07 a.m. Suggest removal
Dawes says...
I'm never sure on this whole income tax argument. Mainly as people just say we need income tax as though thats the answer without saying at what rate and on what amount. For it to work we would no doubt need a much larger Inland Revenue department,which would cost a lot. How would this cost compare to what is brought in. Its easy to say just tax the millionaires, but that won't bring in enough, so i am sure it would be down at around $20-25,000 and over, which means the middle class would yet again get slammed. The real rich can just work out ways around it (dividends, leave the country and so on), so as always its the middle class. As a novel idea and before any taxes are increased on anything, how about the Government cut its expenditure? But i highly doubt that, we seem to be a country that thinks we can tax ourselves out of debt and do not care what wastage goes on. We are all about to be taxed again for BPL's failures, and not 1 person has been held to account for this and they never will, so i expect no change until collapse over here.
Posted 26 November 2019, 9:13 a.m. Suggest removal
joeblow says...
The sources of revenue do not matter if a government is fiscally irresponsible as consecutive Bahamian have proven they are. Increased revenue will simply be more money available to deepen electorate dependence on ever expanding social welfare programs so governments can get re-elected. I prefer things stay just as they are for now!
Greater fiscal responsibility and accountability can go a long way to remedying our economic problems!
BTW,' climate change' is a hoax!
Posted 29 November 2019, 3:31 p.m. Suggest removal
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