Claiming that the fear of the economic fallout from COVID-19 has perhaps surpassed the fear of the virus itself, Progressive Liberal Party (PLP) Deputy Leader Chester Cooper yesterday called for an examination of the state of the national treasury.
In response, Deputy Prime Minister and Minister of Finance Peter Turnquest said late yesterday in a statement that “the integrity of the public treasury remains intact”, and the state of the country’s economy will be outlined in the FY2019/2020 fourth quarter budget update, which is scheduled to be released on August 30.
Cooper, who is a member of the Treasury Committee of Parliament, said he wrote to the chairman after the committee was invited to examine the monthly revenue collected and deposits, as well as the balance on the consolidated fund and any overdraft facilities.
“It is proposed that the committee examine the actuals compared to projections as well as comparisons to prior year by month. In the meantime, we request the Ministry of Finance to provide a copy of the most recent report of the Fiscal Responsibility Council, as it would have sight of internal Ministry of Finance reports in preparing their analysis. The silence of the council is more deadly than the incompetence of the administration in the current environment,” Cooper said in a statement.
“We would also wish to examine all loan documents signed this year, including the documents related to the government’s overdraft and for the Central Bank’s debt sustainability analysis, given its new legislation which limits its ability to lend to the government. The minister, in the referenced interview, refers to bridge facilities with multilateral lenders such as the IDB (Inter-American Development Bank), the CDB (Caribbean Development Bank) and the World Bank. We further renew our call for a review of the loan agreements executed with the IMF (International Monetary Fund).”
Turnquest responded yesterday, saying that the Minnis administration has set and continues to follow a prescribed fiscal plan that will meet the government’s ongoing core financial obligations.
“As foreshadowed during the budget exercise this past May and June, the budgetary performance early in the new fiscal year reflects the prevailing reality in the broader economy,” he said while noting that he has always made himself available to the shadow minister of finance on any serious or substantive matters.
“Revenue receipts are muted and discretionary spending has been constrained. The priorities of the government remain to provide funding for critical government services and social support.”
The IMF recently approved a $252 million rapid finance facility the government requested to offset the economic strain caused by the COVID-19 pandemic. It is a part of the now $9.5 billion debt level and contributed to a $1.3 billion fiscal deficit, the largest deficit ever incurred in the history of The Bahamas.
Turnquest said shortly after the 2020/2021 annual budget presentation that though the number is staggering “the government is not broke”.
Cooper also lamented that while the nation has received weekly health briefings on the COVID-19 crisis from health officials, there are no regular economic briefings, which he said is of critical importance.
“Suffice to say, the fear of the economic fallout has perhaps surpassed the fear of the virus itself. This is most evident by the pain and suffering of the most vulnerable, especially as it relates to access to the most basic essentials such as food and shelter,” he said.
Cooper continued, “Further, the minister of national insurance has recently gone on record in expressing concern that the government unemployment program is without funding to go beyond September.
“Further, many small businesses have expressed concern about the inability to access capital from the recently touted small business assistance program. It has been reported that funding for the first tranche of the program has run out, while funding for another tranche that would cover those who were disadvantaged during the second wave, has not yet been finalized.”
In April the PLP released the “Mitigation of Coronavirus Economic Fallout” plan in which the party suggests that the government allocate funds for temporary employment programs, public-private partnerships for projects and the development of a state-of-the-art digital infrastructure, as well as restructure taxes to ensure that they are progressive and equitable and conduct studies to validate the possible reduction of the value-added tax rate.
“We are confident that had the government followed the substance of the recommendations, specifically to ‘go hard and go early’, that much of the current uncertainty may have been mitigated,” Cooper said.
In addition to the release of the fiscal year 2019/2020 fourth quarter report on Sunday, the Ministry of Finance will hold a press conference on the country’s fiscal affairs on Wednesday, September 2, where detailed updates will be provided.