Prime Minister Dr. Hubert Minnis suggested yesterday the government is in no way willing to jeopardize the stability of the country’s balance sheet, even while under heavy pressure from unions that are calling for more out of the government’s coffers.
Minnis, responding to questions from the media on the looming union issues, said the government is looking for “wiggle room” in the country’s budget to deal with the union issues, but pointed to the Fiscal Responsibility Bill as a barrier to any large, new spending at the moment.
And to ensure the country remains a credit-worthy and investor-friendly jurisdiction, Minnis explained that the financial standing of The Bahamas must continue to stand up to the scrutiny of international watchdogs like the Organisation for Economic Co-operation and Development (OECD).
“We have just introduced our fiscal policy program; therefore, under no circumstance can we, to any degree, jeopardize our international financial standings… being revised by the OECD, etc.,” he said. “One cannot just look in isolation. One must look at the global picture.”
Today the government begins debate on a compendium of bills that will change the financial services sector in The Bahamas forever. These bills will bring the country in line with rules of the OECD and European Union on tax matters, stripping away the anonymity once held by the tops of international business companies (IBCs) domiciled in The Bahamas, and ensuring those companies have economic substance in this jurisdiction and are properly compliant with their tax obligations in their home territories.
These changes to the financial sector could usher in changes to tax policies in The Bahamas in the near future in order to protect from the possible erosion of the tax base that could result from these changes.
Closer to home, unions that are unsatisfied with pay, benefits and working conditions are putting more pressure than ever on the government to meet their demands.
Senior doctors who make up the Consultant Physicians Staff Association (CPSA) are asking for an increase in pay. The government continues to negotiate with the CPSA, as its members continue to strike.
Minister of Finance Peter Turnquest told Guardian Business recently that the Ministry of Finance will strengthen its team to ensure that when the Fiscal Responsibility Act (FRA) is ratified, the government will be able to meet its fiscal obligations.
He said “barring unforeseen circumstances”, the government has “every intention” of meeting its commitments under the FRA.