Tuesday, Dec 11, 2018
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Good governance is not about doing the popular thing

No one likes paying taxes. No politician likes raising them. When you raise them people get angry. Your colleagues get angry. Your funders get angry. Your supporters get angry.

The Minnis administration is raising value-added tax (VAT) from 7.5 percent to 12 percent. Upset followed that announcement. And that’s fine. The public should voice its concerns and ask why.

The government has answered. It says it wants to reduce the country’s rate of borrowing. It wants the country to pay its own way.

The opposition and its friends are peddling in paranoia. They are trying to capitalize on the people’s natural dislike of increased taxes. They want power and the money.

When you hear people fanning the flames of anger regarding the VAT increase what you should ask yourself is what would be their solution. How would they find $400 million to fund the activities of the government if taxes are not raised?

There are only a few ways. You could cut $400 million in expenditure. That means firing thousands of people. Is that the solution of the opposition and its friends?

Or, would you just keep borrowing? Should The Bahamas just make as part of its plan borrowing $400 million this year, $500 million next and $600 million the year after that? In this model debt would soar and the government’s revenue would increasingly be eaten up paying interest on the debt it has accumulated.

You could also do a hybrid of those things. This would be sending home just a few thousand people and borrowing half the amount.

These are the few realistic options.

Leading is about decision making. The Bahamas is not on the cusp of a debt crisis, but it has increased its total debt sharply in the long aftermath of the financial crisis. Our national debt, for example, shot up 43 percent from the 2013/2014 fiscal year to the projected debt figure for the upcoming fiscal year.

A developing country should want to act to slow debt before it reaches anywhere near the danger zone. When you get to the danger zone you lose control. You have to call in the emergency lenders. They then dictate the future of your country in order for you to get new borrowed money to survive.

The Minnis administration has made a tough decision. It’s unpopular. Leadership, though, is about doing what you think is right and in the long-term interest regardless of whether the decision is popular.

You should want to know the specifics of when the government will lower duties. You should ask when will there be consideration for lowering VAT, and by how much. This is a democracy. All government decisions should face reasonable scrutiny.

What you should not do is allow yourselves to be drawn in to opposition propaganda. There are people who want to use your anger to bring down this government so the Progressive Liberal Party (PLP) could return.

Don’t be seduced. You just voted them out because they can’t be trusted with your money. They are the solution to no Bahamian problem. The PLP needs more new faces and deep reform before it is allowed to come back to government.

Stay rationally engaged with your government. Do not join the “PLP rage train”. It was just 13 months ago that you pronounced judgment on the PLP. Nothing has changed on that side.

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