Positive aspects of the 2019/ 2020budget
Peter Turnquest, member of Parliament for East Grand Bahama, deputy prime minister and minister of finance, inherited a difficult situation in 2017, including unsustainable deficits, credit downgrades and general economic malaise.
Notwithstanding these challenges, Turnquest has been single-minded in his determination to bring the government’s finances to good order. His technical training and business experience has instilled in him a dedication to competence and efficiency that has produced under his leadership a welcomed focus to the budget process.
This year’s budget contains a number of positives that should be applauded.
First, the restoration of the public finances to a fiscally sustainable path is bearing good fruits; the galloping trajectory of the fiscal deficit has been halted – nay reversed. As a result The Bahamas government has a smaller deficit and there is now slower growth in the increase of the national debt.
Second, the fiscal situation as reported in the budget is the most transparent ever, providing a clear picture of the government’s financial position. We suggest that the government follow through and produce and table in Parliament supplementary and final appropriation bills, Treasury accounts and audited accounts commencing with the accounts for 2017/2018.
Tourism is buoyant and GDP growth is improving. The government is presiding over a growing economy.
We applaud the budget’s financial support for the small and medium-sized business center.
The plan to address arrears left behind from the tenure of the former administration is another positive aspect of the budget, as is the amortized approach to paying off those arrears.
Similarly, the follow-through on fiscal reform measures is applauded. These reforms will undoubtedly improve fiscal responsibility, accountability and revenue administration.
The decision to amend the Stamp Act to permit the transfer of real property to immediate family members without attracting stamp duty (now VAT) is to be commended. We think, however, the government should rethink the condition attached to the amendment requiring retroactive payment of VAT if the gifted real property is sold to a third party within seven years. This will result in the double payment of VAT – once on the original transfer and then again on the new sale.
We support the government’s decision to build on action taken in the 2018/2019 budget to permit stamp duty to be paid on real property documents at a single location – the Treasury. This positively impacted the ease of doing business, obviating the need for travel to VAT offices at Carmichael Road and then to the Treasury in the city center of Nassau. We note the minister’s concern that the change resulted in refunds of most money paid to eligible VAT registrants on such documents. A simple amendment to the VAT Act could prohibit the payment of a refund on real property transactions. The payment of stamp tax may then continue to be payable at the Treasury Department, which has an experienced permanent civil servant staff.
Finally, we note the minister’s self-congratulations on the government’s demonstrated discipline in expenditure restraint. We wish to join in that congratulations but refrain from doing so given the total lack of restraint exercised by the government in relation to travel both within and outside of The Bahamas. We find government travel delegations overly large and unjustified. And we remain perplexed by the stubborn refusal of the government to give an accounting of money spent on official travel.