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DPM: We will have to adjust the fiscal strategy again

As ministries begin to send their preliminary budget figures to the Ministry of Finance for the 2020/2021 budget, Deputy Prime Minister and Minister of Finance Peter Turnquest told Guardian Business that any cuts to those budgets will be made with surgical precision.

“We will be using a scalpel,” Turnquest said.

He added that the government will have to adjust its fiscal strategy again, as it did following Hurricane Dorian as mandated by the Fiscal Responsibility Act (FRA).

Turnquest would not go into detail about what kind of cuts the government would be eyeing in the upcoming budget year. Given the fiscal constraints foisted upon it – first by Hurricane Dorian and then the coronavirus (COVID-19) – he said the ministries’ budgets and the government’s priorities will be reorganized.

“We can anticipate changes and the reorganizing of priorities,” Turnquest said. “We are receiving initial budget submissions now.”

After Dorian, the government had looked to shave ten percent off each ministry’s budget, Turnquest revealed in October.

And, only seven months ago, Prime Minister Dr. Hubert Minnis had asked for austerity measures to be put in place because of the economic fallout from the hurricane.

As a result of the economic decline caused by Hurricane Dorian, the government was forced to invoke the country’s FRA “exceptional circumstances” clause, which it will likely do again.

“We will have to adjust the fiscal strategy again,” Turnquest said.

Hurricane Dorian decimated parts of Abaco and Grand Bahama, causing an estimated $3.4 billion in damage and forcing the government to “adjust its budget and fiscal targets for the current fiscal year and its medium-term fiscal plan”.

Now, the government is staring down a projected $1 billion-plus bill due to the shutdown of the Bahamian economy, designed to guard against the spread of COVID-19.

The FRA ensures that the government can no longer make deviations from its planned fiscal projections with no accountability to Parliament and the Bahamian people.

Turnquest said the members of the Fiscal Responsibility Council will receive the 2020/2021 budget in July for their comments.

 

 

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