Shadow Minister of Finance Chester Cooper yesterday slammed the government over revised projections for the 2019/2020 fiscal year, which revealed that debt will climb to $8.2 billion as the government borrows nearly $600 million.
“We are alarmed that this government is engaged in record borrowing, a good chunk of it having nothing to do with Dorian,” he said.
“This will lead to a record deficit, the last one having been orchestrated by this same administration two budget cycles ago. Ultimately, this will be record government debt that our children and grandchildren will have to pay.”
In a presentation to the House of Assembly yesterday, Minister of Finance Peter Turnquest said government spending for the fiscal year is now projected to be $308.1 million more than was initially projected.
While Hurricane Dorian was expected to have a significant impact on the year’s budget figures, Turnquest revealed that $120 million of the additional spending is non-hurricane related.
Cooper said Turnquest used the exercise to add spending that the government “neglected” to include in its budget.
“This proves the last budget exercise was a farce designed to mislead the Bahamian people on this administration’s lip-service effort at fiscal responsibility and transparency,” he said.
He added, “The government has appeared to have found religion regarding the need to spend in the aftermath of a hurricane and the deleterious effect a storm can have on the economy.
“But why is there an additional $120 million totally unrelated to Dorian being heaped on the taxpayer at this time?”
In a breakdown of the spending estimates, Turnquest highlighted $37 million for renovations at Princess Margaret Hospital as a particularly pricey non-Dorian expenditure.
Responding to that revelation, Cooper said: “It beggars belief that the government somehow learned of the need for these upgrades since the last budget was passed.”
According to Turnquest, $30 million was allocated for the acquisition of a turbine generation power plant, though only $27 million ended up being spent on the plant.
Cooper called for Bahamas Power and Light (BPL) to clarify the need for the additional spending at the company, which has been the subject of significant controversy in recent months.
“This is in addition to the $95 million in borrowed money BPL spent on station A, and the $70 million in borrowed money BPL plans to spend on station D at Clifton before selling these assets to a foreign company in a less than transparent process,” he said.
“We call again on the government to release its BPL business plan, if it has one, that might clarify what appears to be haphazard moves.”
Cooper also questioned why $16 million was allocated for the Grand Lucayan Hotel. The government purchased the property in 2018 for $65 million with an initial capital investment of $32.4 million.
It since signed a letter of intent with Royal Caribbean Cruises Ltd. and the ITM Group in March for the purchase of the resort for $65 million and the redevelopment of the Freeport Harbour.
“As the Grand Lucayan VSEP (voluntary separation) exercise was conducted before the last budget was approved, it would be interesting to know what all this money was used for,” Cooper said.
He added, “We also note that there has been an additional $8.6 million allocated to the Office of the Prime Minister.
“The Minnis administration must provide to the Bahamian people a breakdown of what this money is for.”
Cooper also called for more clarity on the Dorian-related spending.