Govt social assistance expenditure up 650.3% compared to same period in prior year
NASSAU, BAHAMAS — The country’s fiscal deficit in the nine months ending March of this year ballooned nearly 250 percent compared to the same period of the prior fiscal year, widening from $251.3 million to a massive $878.2 million, according to the Ministry of Finance.
The Ministry of Finance’s combined nine-month fiscal snapshot and report noted: “In the nine months to March, in line with the government’s budget projections and strategy, the fiscal deficit widened to $878.2 million from $251.3 million in the same period of the prior fiscal year.
“In line with the fiscal strategy, government expenditure increased overall by $99.5 million compared to last year, driven substantially by additional outlays for social assistance benefits ($145 million), finance charges ($43.5 million), public debt interest ($21.8 million) and subsidies ($19.2 million).”
It also noted that the government’s operational activities for the first nine months of FY2020/21 included a net increase in liabilities of $1.08 billion.
As reported by the Central Bank, at year-end 2020, the national debt stood at $9,856.7 million.
According to the Ministry of Finance, public debt interest grew by $21.8 million (nine percent) to $264.1 million or 66.6 percent of budget. By currency, $92.6 million (35.1 percent) represented payments on foreign currency obligations and $171.5 million (64.9 percent) was for Bahamian debt.
“Expenditure on social assistance benefits expanded significantly by $145 million (650.3 percent) to $167.3 million compared to the same period in the prior year, to settle at 121.8 percent of the budget,” the report noted.
“The outcome is largely attributed to the extension of the COVID-19-related food and unemployment assistance programs.”
According to the report, taxes on goods and services, accounting for 72.2 percent of total government tax revenue, contracted by $402.2 million (35 percent) and represents 70.2 percent of the budget target.
The government also saw gaming taxes contract by $14.4 million (46.7 percent) to $16.4 million.
“Proceeds from the Patrons Winnings Tax implemented January 1, 2021, have not resulted in improved revenues due to a legal challenge by the Association of Gaming House Operators in respect to the application of the tax,” the report noted.
