NASSAU, BAHAMAS – Progressive Liberal Party Deputy Leader Chester Cooper yesterday slammed the government’s plans to borrow $587.9 million to finance Hurricane Dorian recovery efforts and cover revenue losses.
“We are alarmed that this government is engaged in record borrowing, a good chunk of it having nothing to do with Dorian,” Cooper charged in a statement.
“This will lead to a record deficit, the last one having been orchestrated by this same administration two budget cycles ago.
“Ultimately, this will be record government debt that our children and grandchildren will have to pay.
“The FNM’s tax high, shamelessly borrow fiscal responsibility experiment has failed.
“They’ve now resorted to trying to mask bad budgeting practices in the aftermath of a major disaster.”
In the House of Assembly yesterday, Deputy Prime Minister and Minister of Finance Peter Turnquest delivered a break-down of Dorian related expenditure as he tabled a supplementary budget and a resolution to borrow $507.9 million from a number of potential facilities like local banks and the Inter-American Development Bank (IDB).
He also tabled another resolution to borrow $50 million from the Caribbean Development Bank.
Government debt is expected to increase to $8.2 billion by the end of fiscal year 2019/2020, up from $7.612 billion.
The finance minister explained recurrent expenses are projected to be higher by $157.6 million, bringing the revised estimates to $2,687.6 million.
On the capital side, Turnquest said spending is estimated to grow by some $150.5 million to a revised $385.5 million, with $100 million being directly related to hurricane restoration.
But Cooper questioned the government’s budget, pointing to some $76 million being spent “that has absolutely nothing to do with Hurricane Dorian”.
“Of the $590 million being borrowed, we see that $27 million has been spent on a generator for the Blue Hills plant,” Cooper said.
“This is in addition to the $95 million in borrowed money BPL spent on Station A, and the $70 million in borrowed money BPL plans to spend on Station D at Clifton before selling these assets to a foreign company in a less than transparent process.”
Cooper reiterated his call for the government to release its BPL business plan.
He also called into question the additional $8.6 million allocated to the Office of The Prime Minister.
“The Minnis administration must provide to the Bahamian people a breakdown of what this money is for,” he said.
“If it is to be used for the ill-advised Disaster Recovery Authority and the new bureaucracy in the Ministry of Disaster Recovery, the taxpayer should receive full disclosure.
“We await further clarity on this matter.”
Turnquest has confirmed the government has decided against introducing additional taxes given the substantial impact of Dorian to the Bahamian economy and the need to maintain private consumption levels.
However, Cooper maintained his party has “no faith when this administration promises not to raise taxes”, pointing to the government’s increase in VAT from 7.5 percent to 12 percent.