Exumas and Ragged Island MP Chester Cooper yesterday labeled the Minnis administration “one, big, unmitigated disaster” that has “bungled” the handling of the country’s fiscal affairs.
“This latest budget is disappointing, uninspiring, unimpressive, unbelievable and frightening,” Cooper said during his contribution to the 2020/2021 budget debate.
“It represents a missed opportunity to press the reset button and does nothing that I can see to make The Bahamas more resilient.
“It includes nothing that makes me feel we will be better off in 12 or 24 months than we are today.
“The budget is treading water; borrowing big but not doing big things.
“Unprecedented times call for unprecedented leadership.
“This budget does not display the leadership the Bahamian people need during these times.”
During his budget communication on May 29, Minister of Finance Peter Turnquest said the Minnis administration intends to borrow $1.3 billion in the 2020/2021 fiscal year.
He painted a grim economic picture and highlighted a projected deficit of $1.3 billion.
Turnquest said the corresponding government debt level is expected to rise to nearly $9.5 billion in 2020/2021, equating to roughly 82.8 percent of GDP.
Government debt is projected at $8.9 billion at the end of the current fiscal year, which ends on June 30. He also noted that the government slashed the budgets of 42 ministries and departments.
Cooper said yesterday that the figures in the 2020/2021 budget “don’t add up,” noting that he has no reason to “believe” that revenue projection will return to pre-Hurricane Dorian levels by 2022.
He said the Minnis administration doesn’t appear to be “in touch with reality” based on the upcoming revenue projections. The government has forecasted that it will collect $1.7 billion in revenue in 2020/2021.
“Gaming tax, you project, will increase by more than 40 percent,” Cooper said.
“I want to understand how you’re going to do that, given that there’s high unemployment. You project export duties will increase by 256 percent. I hope you are right, but I don’t believe that either.
“I’m not sure how you got to that, but it certainly doesn’t seem achievable based on the dearth of announcements on enhanced export projects.
“You project insurance dividends will increase, yet, premium taxes will decrease, as many people may have no choice but to lapse their policies.
“With net assets of roughly $14 million at the Insurance Commission of The Bahamas and a net income of roughly $3 million, someone will have to explain to me how you get dividends of $18 million, $21 million and $23 million over the next three years from this regulatory body.
“Mr. Speaker, even the government claims it is decreasing its premiums to $60 million; no explanation on that. I’d like to hear more about it, given the experience in the last 15 years.”
Cooper said projections for real property taxes seem “a little bit inflated” based on the third quarter actuals.
“The same can be said of stamp duty on mortgages of $8.7 million,” he said.
“As is the case of excise taxes normalizing at $251 million in 2021/2022, despite steady rate reductions and a shrinking economy. We want to hear more about that.
“And then, there is revenue of $600,000 from stem cell research, even though I understand the only clinic in Freeport remains closed since Dorian. Maybe you know something that we don’t know.
“I do not believe the expected revenue can be achieved and as such the deficit will likely be higher unless the government can cut back even more. Perhaps, the minister can explain.”
Cooper noted a projected 25 percent reduction in rent allowances for foreign diplomats in the upcoming fiscal year.
“I know you won’t leave them homeless, North Abaco,” he said, referring to North Abaco MP and minister of foreign affairs, Darren Henfield.
“So, we’d love to hear some explanation as to the reasonableness of those numbers.”
Cooper also took issue with Turnquest’s continued attacks against the record of the Progressive Liberal Party.
“The Bahamian people want to know the way forward, not to walk with you down memory lane,” Cooper said.
“Newsflash: This is your third budget, might be time for you to move on.”
The government budgeted recurrent spending at $2.6 billion, which is $35.3 million or 1.4 percent higher than the revised budgeted sum of $2.5 billion for the supplementary budget.
Turnquest said capital expenditure will feature a number of projects that support hurricane restoration, as rebuilding efforts continue on Grand Bahama and Abaco.
Despite the projected revenue drop, the government will not increase taxes or introduce any new taxes in the 2020/2021 budget, the minister pointed out.