DPM: Nearly $600 million in additional borrowing ‘not for idle purposes’

DPM: Nearly $600 million in additional borrowing ‘not for idle purposes’
Deputy Prime Minister and Minister of Finance the Hon. Peter Turnquest

NASSAU, BAHAMAS  – The Government’s request for nearly $600 million in additional borrowing is ‘not for idle purposes’, Deputy Prime Minister and Minister of Finance K Peter Turnquest said yesterday.

Turnquest noted the damages and losses to infrastructure as a result of Hurricane Dorian is over $450 million during his contribution to the supplementary budget yesterday.

The East Grand Bahama MP also noted that the government is eyeing the possibility of  the country’s gross domestic product shrinking by one percentage point as a result of Hurricane Dorian. 

“The additional borrowing we have requested is not for idle purposes,” he said.

“We are also investing to sustainably rebuild the economies of Grand Bahama and Abaco. The damage and losses to infrastructure alone as a result of Hurricane Dorian is very tangible, at over $450 million dollars.

“It means clinics that are no longer accessible and therefore parents, having to drive miles and miles instead of down the road to attend to a sick child. It means roads that are still impassable or severely damaged. It means water systems that are still not operating properly. The inaccessibility of these services impacts the lives of real people.”

He continued: “So much work has already been done for the restoration, but we need additional resources to complete the massive task at hand.  Unfortunately, we cannot just wish away the cost of this reconstruction.

“We have allocated approximately $214.2 million in capital projects over the next three years, because these infrastructure investments are required so that schools, clinics, roads, electrical and water utilities are restored; so that storm victims can rebuild their homes and businesses, and get on with their lives as soon as possible.

“While we are providing for the immediate needs of Grand Bahama and Abaco, we are also thinking progressively about the future needs of the country. 

Turnquest again noted that the government has allocated $11.4 million toward unemployment benefits to ensure eligible persons that lost their jobs receive unemployment benefits from the National Insurance Board for an extended period.

“This is putting money in the pockets of storm victims, helping them to sustain themselves as best as possible while working to restore their lives,” he said. 

“Our policies to support individuals and families come as a necessary cost. Unfortunately, what we have in available resources is significantly less than what we need.

“Although counter to our fiscal consolidation objective, borrowing is the only immediate choice we have that is in the best interest of the Bahamian people given the alternatives. So, we are borrowing to lift people from hardship to a path of more stable and sustainable living.”

Turnquest pointed out that the supplementary Hurricane Dorian budget tabled in Parliament presents the facts of all hurricane related expenditure and shows the revised budgetary estimates for the remainder of 2019/20.

“It shows the $232.6 million in revenue loss as a result of tax revenue lost and forgone,” he said.

“It shows the $182.7 million in new Hurricane Dorian expenditures. It shows the $119.9 million in liabilities deferred by previous governments.

“It shows the $5.5 million in new interest charges as a result of our new debt. The price tag of these necessary and unavoidable expenditures is $540.7 million.”

Turnquest continued: “We are not obscuring or hiding the fact that some of the expenses in our revised estimates are targeted at other critical governing priorities. These are important policy commitments that we felt merited immediate consideration.

“Our accounting for them in the supplementary budget further solidifies our commitment to transparent fiscal management.

“The $4.5 million we allocated for nurses’ back pay, for example, was a debt we could not shift down the road. The $20.4 million for renovations at the Princess Margaret Hospital were and are critical for the delivery of quality healthcare for Bahamians.

He said: “The truth of the matter is that the financial laws of The Bahamas contemplate contingency expenditure during the year, which is why we have a Contingency Fund. All administrations make use of this fund to address new and compelling priorities.

“The supplementary exercise gives us an opportunity to replenish the Contingency Fund, and this Government has availed itself of the opportunity to get this done in the most open and transparent way.

“What we have done to improve the integrity and credibility of our fiscal plan is to address these liabilities now. “

Turnquest noted that the Revenue Unit at the Ministry of Finance has received over 2,000 applications under the Hurricane Dorian exigency order.  

“Of this total,” he said, “over 900 applications were for the importation of replacement vehicles, and over 1,200 applications for relief goods and other non-listed items.”

The Exigency Order means that individuals who are directly impacted by the Hurricane in the affected areas can import approved goods duty free and VAT free based on the conditions outlined in the Order.

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