By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

The Fiscal Responsibility Council’s chairman yesterday said there was “no short-term fix” for the government’s multi-billion dollar debt and deficit challenges, describing it as a “difficult situation”.

Kevin Burrows told Tribune Business that the Minnis administration presently has very little room for cutting government spending given that the majority of the Budget is dedicated to covering costs, such as civil service salaries, debt service payments and rents.

With the national debt forecast to hit $10.4bn by the end of the 2021-2022 fiscal year, with some $951.5m added to it over the next 11 months due to projected deficits, Mr Burrows said the government’s best hope was for tourism and the wider economy to rebound as quickly as possible and enable revenue growth to close the gap with spending.

He added: “This is a difficult situation because you have to remember that runaway debt is simply a result of a shortfall of revenue versus expenditure. So in the short-term that shortfall has to be filled; it has to be financed.

“There is no short-term fix for the increase in debt and the deficits. We just need to close the gap on the revenue side and, hopefully, with the opening of tourism and all of that we can begin to see revenues get closer to normal.”

“There is nothing we can do on the expenditure side that’s going to quickly change that equation. We just have to hope that revenue bounces back a lot more rapidly, and I think we are starting to see some proof of that into this year.”

Mr Burrows said the council’s much-anticipated first report will be presented on its website next week. He explained that it had been delayed because the bureaucracy“takes forever”, but “we’re looking at the first report to come out in the next week or so. We are finalising the final design and that’s just about done, and all we need now is sign off from the committee”.

The report will contain nothing that is “earth shattering”, and Mr Burrows said there is “very little” the council can do with regard to the what the central government does to manage its financial affairs.

“Unless individual members put their own spin on things, then we may be able to do that. But the Fiscal Responsibility Council is not designed to opine on the budget, per se. It’s just about the presentation and making sure the government is presenting it according to the Act,” he added.