NASSAU, BAHAMAS — Opposition Shadow Finance Minister Chester Cooper yesterday asserted that the government has yet to identify a clear strategy for economic growth, while slamming many of the forecasts in the recently released Fiscal Strategy Report (FSR) as “fanciful”.
Cooper, in a statement on the FSR that was tabled in Parliament on Wednesday, said: “I have yet to identify a clear strategy for economic growth — which is what the government should primarily be focusing on at this time.”
He added: “What I do see is an administration that once again runs to impose additional taxes on the Bahamian people and further starve capital works that could spur the economy. The administration that railed against value-added tax then raised it, is now looking to a legalized gaming industry it opposed to shore up its fiscal position. The irony is breathtaking. Of course, we hear no talk of taxing the winnings of foreigners who gamble in the casinos where Bahamians are not allowed to play.”
The government is planning to implement a long-planned gaming tax on winnings on January 1, 2021 to help counter significant revenue losses. The tax was introduced via the Gaming House Operator Amendment Regulations passed in the House of Assembly in 2019.
The government also plans to cut back on expenditure by $200 million.
Cooper said, however, that for the government to “still talk of cutting expenses and putting finances in order nine months into the pandemic is worrisome”.
“This administration also takes the hypocritical position of wanting to cut $100 million in spending while asking Bahamians to pay more,” said Cooper.
“Bahamians will now also have to change the way their finances are budgeted as they brace for not only an increase in the rates they pay for water, but the frequency at which the bills come.”
He argued that increasing fares at Bahamasair will also hurt Family Island residents and impact tourists who wish to visit the Family Islands.
The government plans to undertake, in short order, fare adjustments and operational changes that it believes will eliminate the national flag carrier’s reliance on government subsidies over time.
Cooper further argued the FSR brings no real sense of comfort that there is a clear strategy to restructure and pay down the country’s debt, or identify significant areas of revenue the government could focus on.
“It is the usual politically correct rhetoric for the international community, which has no illusions about the fiscal position of The Bahamas under the management of this current administration. Many of the forecasts are fanciful and will need to be further adjusted. The government is looking to January to revise its projections. However, it is unclear what two additional weeks will tell them that they don’t already know,” Cooper said.
He added: “I again call on the government to establish a debt committee with private sector contributors to manage, renegotiate and restructure debt to create savings and headroom in the short-term. I also call for a detailed accounting of the affairs of the National Insurance Board (NIB) to whether the government has funded its share of the unemployment assistance via NIB or whether they are borrowing from the social security system.”
The Exumas and Ragged Island MP also argued that there is no real plan articulated for restoration on Abaco, Grand Bahama and Ragged Island.
“There is, curiously, no update on the status of the Grand Lucayan sale outside of the chairman who negotiated the deal and the minister of tourism bantering in the press about how bad the deal may actually be. Meantime, our debt-to-GDP ratio is approaching 100 percent and the deficit projections will be moot in short order. Beyond Dorian and beyond the pandemic, there remains deep concern about the competency of our political leadership at this time,” he said.