More questions than answers
Given the level of planned borrowing in the current fiscal period, the impact of Hurricane Dorian and the needs of Abaconians and Grand Bahamians for specifics on timelines so that they can plan their lives, there are answers to key questions that ought to have been provided during yesterday’s Supplementary Budget debate in Parliament.
The government’s deficit projection of $677.5 million hinges on its ability to meet its revenue projections, the failure of which raises the likelihood of additional borrowing.
During his debate contribution, Finance Minister Peter Turnquest continued to make the case for the administration’s plan to borrow $587.9 million, but gave no details on how it expects to collect $458 million in value-added tax (VAT) and $122.3 million in excise tax revenue in the final six months of the fiscal year given a slowed economy and tax incentives for Abaco and Grand Bahama.
No details were provided on the progress of the government’s revamped Revenue Enhancement Unit, or the extent to which initial challenges with the Click2Clear system have been resolved so as to enhance revenue collection by the Customs Department.
There was no report on the amount of tax revenue deferred as a result of exigency orders issued in the aftermath of Dorian, and the minister gave no indication of provisional determinations on the need to extend all or some of the provisions of government’s Special Economic Recovery Zone (SERZ) order, which expires at the end of the fiscal year.
Government debt is projected to increase to $8.2 billion this fiscal year, a figure that has prompted concerned Bahamians to call for details on debt servicing and loan sources.
No update was provided on when government expects to table its promised Debt Management Bill, though we understand the same is currently out for consultation.
And no explanation was given on how the government arrived at an $11.4 million figure as part of planned borrowing to double National Insurance Board (NIB) unemployment benefits from a 13-week to a 26-week payout for eligible Dorian victims.
Minister responsible for NIB Brensil Rolle told Parliament that to date — 19 weeks after Dorian’s passage — over $4 million has been paid out to 1,500 applicants from the affected islands.
During a national address this week, Prime Minister Dr. Hubert Minnis announced a planned heads of agreement signing for a proposed $300 million development for South Abaco, which if it materializes, is expected to create hundreds of construction jobs at the outset.
But in order for displaced Abaconians to be in a ready position to take advantage of future job prospects on their island, their immediate needs for housing, electricity, water and schools in the hardest hit areas must be addressed.
State Minister for Disaster Preparedness, Management and Reconstruction Iram Lewis gave no explanation to Parliament yesterday for the snail’s pace of construction of temporary dome housing at Spring City, as only 32 domes of what was originally announced as a 250-dome Family Life Centre are earmarked for a February 20 completion date — and those are only for Spring City residents.
Hundreds of Abaco evacuees were urged by the prime minister last October to come home to occupy the domes, but had they heeded that admonition, they would have returned with nowhere to live.
The Disaster Reconstruction Authority has been allocated $1.5 million in recurrent expenditure and $2.5 million in capital expenditure, but Lewis provided no details on how these allocations are to be spent, particularly in light of the fact that the Supplementary Budget itself does not provide line item details for these allocations.
As for expenditures for Grand Bahama, Turnquest provided no specifics on allocations for the Grand Lucayan resort, which taxpayers have been funding since the government’s acquisition thereof back in 2018.
Given that the Bahamian people are financing the resort, and funds are to be borrowed to support its continued operation, the government ought to have provided to Parliament a detailed financial breakdown of the resort’s performance under state management.
We recognize that the finance minister is focused on closely adhering to legislated fiscal targets and we applaud his efforts in this regard.
However, it is important that he and the administration recognize the need to not only tell the public what it wishes to do, but to provide specifics on how it plans to do it and on the timelines storm victims can reasonably plan their lives by.