While he acknowledged that the upcoming budget deficit will be the largest the government has ever run, and will require the largest ever level of borrowing to fund it, Deputy Prime Minister and Minister of Finance Peter Turnquest yesterday insisted the government is handling the situation responsibly.
“This is the largest deficit ever incurred in the history of The Bahamas,” Turnquest said as he opened the debate on the 2020/2021 budget.
“But it is also in response to the largest revenue drop in the history of The Bahamas as a result of a one-two catastrophic sucker-punch to the heart of our economy.
“The unprecedented level of borrowing is to fund this unprecedented deficit. It is as simple as that. We are acting responsibly to adequately fund the government and ensure that our people do not suffer unnecessarily.”
Last week, Turnquest revealed that the 2020/2021 deficit is projected to hit $1.3 billion and the government debt level is expected to rise to nearly $9.5 billion.
“The borrowing we will have to undertake to close the deficit gap has implications for the country’s long-term fiscal health,” Turnquest said.
“These are facts we are not shying away from. On the contrary, we are eager and committed to resuming our plans to achieve fiscal balance.”
The government is expected to lose $900 million in revenue in the next budget year compared to 2019/2020.
Turnquest said although this is concerning given the government’s performance just three months ago, “the government is not broke, and we caution against any fear mongering that relies on such claims”.
“Faced with this scenario, we have put in place arrangements to ensure we can adequately meet our obligations, as any responsible government would,” Turnquest said.
Turnquest assured that as the government adjusts its spending to allocate for decreased revenue, it will continue to provide financial support for Bahamians affected by the events.
He said the government has allotted an additional $86 million in support to Bahamians through the extension of the COVID-19 policy measures that were implemented in March.
“This budget provides for the less fortunate among us. Those who cannot work, those now without jobs in search of work, and those who just flat out find themselves on hard times,” Turnquest said.
“We are not providing handouts; we are rallying together to unite the community and provide the support Bahamians need.
“This government did not create Dorian or COVID-19, and neither did the thousands of Bahamians displaced in their wake.”
When he delivered his budget communication on May 27, Turnquest cited Hurricane Dorian and the COVID-19 pandemic as having been detrimental to the economy and government finances.
But yesterday, he expressed confidence that the Minnis administration will be able to turn the country around.
“Fair-minded Bahamians realize the challenges we are facing as a nation,” Turnquest said.
“Again, and again, we have met the tough circumstances head-on, and made the tough decisions in the best interest of our beloved Bahamas.”
“I want to reassure all Bahamians that this government — your government — has drawn together every resource at its disposal to protect this country and support its people through this ongoing health and economic crisis,” Turnquest said.
“I said on the morning of May 27, and I want to reiterate again, that no Bahamian will be left without food, no Bahamian will be left without hope, and no Bahamian will be left to total desperation as a result of the twin crises this country currently faces.”
PLP ‘sowing seeds of division’
Turnquest also spent a considerable portion of his speech excoriating the Progressive Liberal Party record during its last term in office.
He also rebutted the opposition’s criticism of last week’s budget communication, accusing the part of “sowing seeds of division”.
“Despite the opposition’s theatrical dismissal of our plan, we have already considered proactive economic recovery solutions,” he said.
“And, despite the opposition’s hyperbolic ravings and twisting of the facts, the bad judgment, and failures during their term in office are plain to see.
He continued: “Bahamians, be not fooled by the rhetoric on the side opposite.
“They have been busy muddying the water and sowing the seeds of division at a time when we should all be unified against the challenges we face.
“They have no new ideas, so their propaganda machinery has reverted to personal attacks; pure sip-sip about who is rich and who is elitist.”
Turnquest said the public will see the difference between the two parties by how the government navigates the impact of Hurricane Dorian and the COVID-19 crisis.
“In contrast to the opposition,” he said, “we have a clear tale of two governments — one that is ready and capable for any challenge; and the other that has nothing to show for itself but crocodile tears, broken promises and bad debts.”