By EARYEL BOWLEG

Tribune Staff Reporter

ebowleg@tribunemedia.net

FINANCE State Minister Kwasi Thompson said the government made the “hard” decision to increase the country’s national debt over the short term in order to fund the assistance programmes needed to keep people afloat during the COVID-19 pandemic.

He made the comment after telling the Senate the Minnis administration has doled out more than $280m in unemployment benefits and assistance up to the end of May. He also spoke about other assistance initiatives the government has implemented.

“To disperse the desired level of assistance required us to make some hard decisions,” Mr Thompson said. “We could have chosen to provide only minimal assistance to households, businesses and the healthcare sector and maintain pre-crisis levels of debt. . .or we could have chosen to temporarily deviate from our debt plan to provide crisis-time levels of support to keep Bahamians afloat. We chose the latter. You know what, this was the right decision to make.

“We knew then that providing adequate support would increase our national debt over a short term period, but we knew it was a worthy sacrifice to take care of the Bahamian people in the midst of the crisis.

“It was worth it to save the thousands of businesses. It was worth it to feed the thousands of households, it was worth it to put money directly in the hands of those who lost their jobs.”

The Tribune previously reported that government debt remains on course to top $10 billion by the end of the next fiscal year due to the Minnis administration’s commitment to substantial deficit spending to help the country rebound from the COVID-19 pandemic. The deficit is projected to be $951.8m in the 2021/2022 fiscal year.

Yesterday, Mr Thompson also said some critics have concerns about the government’s revenue projections — which is estimated to increase by about $588.3m — for the upcoming fiscal year. However, he said he wanted to put those concerns to rest, saying with the opening of the economy in November 2020, the country experienced higher than expected or projected growth in revenue inflows from main tax categories such as VAT, customs and border taxes.

He added that revenue for the five months ending November 2020 totaled only $530m, a contraction of 42.4 percent compared to the same period of the prior year. “But if we look at revenue for the last six months - the period of December 2020 to May 2021, preliminary data places revenue ahead of budget projections by 13.5 percent or $126.6m.

“Revenue collection for the six months ending May 2021 is also ahead of actual revenue for the same period in the prior year by some $5.4m.

“Obviously, we do not expect revenue inflows to compare to the pre-Dorian or pre-COVID levels, but as I have said, Madame President, we are trending in the right direction and well on track to meeting this fiscal year’s revenue estimates. “The momentum is building. The economy is on a good path and The Bahamas is coming back,” he said.

Yesterday, he also said the government set a plan when the COVID-19 pandemic began and delivered on that plan, not anticipating the impact the disease would have on society.

“Madam President, through the end of May 2021, our government provided $284m in support for households by way of the NIB unemployment benefit programme and its unemployment assistance programme,” he said.

He said from September 2019 to May 2021, these programmes assisted more than 86,000 people who were employed in tourism, wholesale and retail and professional services.

“So, Madame President, when I hear people say that the FNM didn’t do anything, it is absolute and complete nonsense,” he said.

He said the Ministry of Social Services also provided support through its rental, food and clothing assistance programmes.

“We provided, Madame President, $35.9m for the National Food Distribution Taskforce.”

He said this supported more than 72,000 people.

Mr Thompson also touted the government’s investment in the Small Business Development Centre (SBDC) so that it could provide business continuity loans, grants and equity financing of $45m to over 1,020 businesses.

He said of that total, 450 businesses received grants.

“These are real businesses, with real Bahamian owners and real Bahamian employees who were able to survive the necessary shut-down of the domestic economy through our strategic support for the private sector,” Mr Thompson said.