Former finance minister urges new govt to control spending
Former Minister of Finance Sir William C. Allen yesterday urged the new government to examine the level of spending that got “out of hand” over the past five years under the former Christie administration, despite a significant boost in revenue from value-added tax (VAT).
Speaking with Guardian Business yesterday, Sir William explained that the former government should have been able to reduce the deficit significantly in light of collecting $1.14 billion in VAT from 2015 to 2016.
Sir William appeared as a guest on Guardian Radio talk show “Z Live” yesterday, where he lamented the former government’s spending habits.
“It (spending) did get out of hand over the past five years, there is no question about that,” said Sir William.
“There must be expenses, which were called recurrent, which really were not.”
In February, the Central Bank reported that, despite $761.9 million in taxes being generated during the first half of the 2016/2017 fiscal year, the fiscal deficit increased to $214.2 million for the period.
Sir William said the new government has to look at spending trends over a series of time.
“That is what the government has to look at. They have to do the forensic accounting to see what were the expenses that led to this use of additional revenue we got and still be running a deficit,” he said.
Sir William also expressed concern over VAT being compromised under the new administration.
“I would hate to see the VAT compromised too much. That is going to substantially enhance their revenue situation,” he said on the show.
He explained that he thinks total revenue is roughly 26 percent of gross domestic product (GDP).
“I would hate to see that falling below 26 percent,” he added.
Sir William pointed out that the Minnis administration is faced with “some enormous challenges”.
“There is an enormous pressure on them because of the weakness in the economy, because of the level of debt already achieved and having to be serviced,” he said.