Govt urged to assume ‘limited austerity’ mindset
A top lawyer has called on the Christie administration to implement greater austerity measures in the wake of the 2015/2016 budget presentation, arguing that the budget was not “carte blanche” for government spending.
Speaking on The Financial Voice Wednesday evening, Higgs & Johnson partner Christel Sands-Feaste urged the government to “tighten their belt” in the coming months as the average Bahamian endures the impact of value-added tax (VAT) and creeping national unemployment rates.
“It’s not a carte blanche and I reiterate that the consumers are looking for limited austerity from the government’s perspective. We all feel that there’s no increase in everyday income so at the same time we expect the government to cut back, to tighten their belt, and to disclose to the public what efforts are being taken to cut back on the discretionary spending,” said Sands-Feaste.
Sands-Feaste further highlighted the opportunities to cut government costs by targeting “low-hanging fruit,” such as moratoriums on the purchase of new government vehicles, or stricter controls over the government’s fuel allocations.
Although Sands-Feaste believed that the average consumer was willing to accept “marginal” increases in the budget for essential services, she argued that such increases would only be palatable if accompanied by greater government accountability.
“That increase must be accompanied by increased transparency, a justification for why there’s an increase, and in addition the spending has to be consistent with the national development plan,” she said.
Rupert Pinder, economist and assistant professor at College of The Bahamas (COB), similarly stressed the needed for cutting back on wastages within ministries but acknowledged the need to maintain local infrastructure.
“In addition to the introduction of the value-added tax, we also have to look at our spending and we have to be able to identify areas where there are wastages to be able to contain spending so as to address that.
“Part of the growth in the debt has to do with the extent to which we are not generating enough revenue to cover our day-to-day expenditure and we also have to borrow to cover capital expenditure in terms of those overall projects. We need to ensure that we maintain a level of capital expenditure in terms of the maintenance of our infrastructure,” said Pinder.
Aside from matters of increased government expenditure, Sands-Feaste questioned whether the budget had instilled greater confidence in the government’s handling of public funds or had had any substantial positive impact on the ease of doing business in the country.
Although the Christie Administration unveiled a host of tax concessions designed to incentivize business development, Sands-Feaste felt that the move did not go far enough in addressing the mounting “bureaucracy in doing business,” which she and other private sector panelists believed hampered the ease of doing business in the country by making licensing and interfacing with government agencies overly burdensome.
“I think overall the average Bahamian small to medium sized businesses are not feeling that there’s anything in the budget to encourage them to hire more persons, to expand their business, or to upgrade their equipment so that they’re able to make a greater economic contribution,” said Sands-Feaste.
The recently announced concessions included a slight cut to business license fees and customs duties for select items.