Government said it plans to honor its commitment to the Bahamian people that they would enshrine fiscal discipline as a core element of the Minnis administration’s transformative agenda, according to Finance Minister Peter Turnquest.
During his tabling of the 2018-2019 Budget Communication, Deputy Prime Minister Peter Turnquest said putting the nation’s fiscal house in order is a clear prerequisite to a more buoyant private sector and stronger job growth, as well as securing sustainable improvements in the standard of living our citizens.
“Perennial government deficits and an ever-ballooning burden of government debt, pose a direct threat to a better life today and to prospects for future generations,” Turnquest said.
The deputy prime minister stressed the importance of its commitment to prudence and highlighted the recently tabled Fiscal Responsibility Legislation that lays out binding fiscal rules. The bill was first introduced earlier this month and is now out for public consultation and feedback.
Turnquest said the principles of the legislation will help achieve and maintain sustainable fiscal balance as well as prudent levels of public debt and managing fiscal risks.
He highlighted specific fiscal objectives that have been established, which he said, will reduce debt to no more than 50 per cent of gross domestic product (GDP).
Minister Turnquest also stated that the fiscal balance is to be reduced to no more than 0.5 per cent of GDP from 2020 onward and shall not exceed 1.8 per cent of GDP in 2018-2019 and 1.0 per cent in 2019-2020, to allow for a transition to the latter objective.
Following the attainment of the 0.5 per cent of GDP objective for the fiscal balance, according to Turnquest, the growth of recurrent expenditure shall not exceed the long-term rate of growth of nominal GDP.
An independent Fiscal Responsibility Council (FRC) will be established as a mechanism for enforcing the bill’s binding fiscal commitments, Turnquest said.
He also mentioned that it shall be required to prepare and implement an adjustment plan as an additional enforcement mechanism whenever the government does not comply with requirements of fiscal objectives which will be tabled in Parliament, forwarded to the FRC and published on the official website of the government.
“The plan will clearly specify the measures that will be taken to return to compliance with the requirements for the legally mandated fiscal objectives,” he said.
Turnquest stressed that the stringent fiscal requirements of this legislation are ground breaking when it comes to the management of this nation’s affairs, but are necessary to ensure that no government, including his own, ever repeats what he said is the disastrous fiscal experience of the previous administration.
The government is also pursuing an in-depth and extensive review of all government programmes and services Turnquest noted, which will also seek to enhance value for money, improve services to make them more effective and efficient, and identify savings and reallocations to accommodate their core policy priorities.
“It is simply well past time for such a review to ensure that the administration and delivery of government programmes and services are up to the best international standards of the 21st century,” he said.
Turnquest mentioned that all ministries and departments were mandated during this fiscal period to implement a 10 per cent reduction in respect of their discretionary expenditures.
As a result, Turnquest projected that the governments wage bill, and purchase of goods and services, will go down by $120 million or 10.3 per cent, from the amounts budgeted.
According to Turnquest, the in-depth review of expenditure is expected to make a significant and permanent contribution to deficit reduction going forward.
This article was written by GINELLE LONGLEY, Eyewitness News intern.