Batten down the hatches, Bahamians! Today, our fiscal ship finds itself in grave danger.
Burdened by a heavy cargo of national debt, MV Bahamas Economy is struggling to stay afloat in a sea-churning hurricane born out of years of wrong-headed navigation by captain and crews using faulty planning maps and integrity compasses, broken by self-interest. All has been made worse by the fierce and rapidly changing climate of international trade.
This was the understory of the message the nation’s deputy prime minister and minister of finance delivered when he laid the country’s 2018/2019 Budget before Parliament on Wednesday, June 30. Given the unlovely task of belling the cat, Deputy Prime Minister K. Peter Turnquest outlined the government’s strategy for setting our national finances in order, which centred on “Implementing the Government’s Policy Agenda and Securing Core Fiscal Objectives.”
It was clear from the outset that the major concern and focus of the administration’s policy was addressing the “rabbit out of the hat” trick practiced by their predecessors. Mr. Turnquest termed it: “artificially under-budgeting for known commitments.” It seems that years of political lying by omission has left The Bahamas fiscal ship foundering under the weight of arrears and unbudgeted commitments to the tune of $360 million. Breaking it down to street level, mismanaging the people’s money has left us with hardly a pot to pee in.
Ostensibly, the government has moved to end the fiscal chicanery by putting forward Fiscal Responsibility legislation, which is purportedly “a legally-binding framework for responsible fiscal management as well as effective parliamentary and public scrutiny of the fiscal performance of the Government. In the street that translates into an attempt to stop piratical Members of Parliament and government functionaries from emptying the public cash machine into carefully camouflaged back pockets.
Beyond the civil society groups, the general public seemed not to give a fig for fiscal responsibility. Lighting widespread passion was the increase in value-added tax from 7.5 percent to 12 percent effective July 1, which was presented as the primary weapon in the administration’s uphill fight to reduce government debt to less than 50 percent of GDP.
The firestorm ignited has practically obscured the sweeteners the government has added to help Bahamians swallow the bitter pill of tighter fiscal management. The candy jar was opened to dispense removal of VAT from medicine, residential property insurance, from all breadbasket items (except for sugar), and from electricity bills under $100 and water bills under $50, effective August 1. We are told that this benefit will impact 30,000 Bahamas Power and Light (BPL) customers, and 43,000 Water and Sewerage Corporation customers. Additionally, the Customs duty exemption for personal travel was raised from $300 to $500 twice annually and, in a mind-bending contradiction, retailers were promised duty-free imports of clothing and shoes.
The big question—Will the itinerary charted in the 2018/2019 Budget put MV Bahamas Economy on a course to enter the desired fiscal safe harbour?
As the French writer Marcel Proust said, “The real voyage of discovery consists not in seeking new landscapes but in having new eyes.” To get a handle on this country’s financial woes, a profound transformation in outlook and practice is unavoidable.
How do we achieve the desired transformation? How can we be assured that the 2018/2019 is not a ride on the age-old elliptical machine, generating circular rather than forward movement?
We can, if, along with the package of pain, the government has prepared curative doses of public education, self-policing, accountability and unity in its ranks, as well as planning for next steps that begins with consultation at concept stage.
We can, if the members of parliamentary opposition stop pouting and starting thinking “nation” instead of “next election”, and generate solution-building ideas. Don’t send now to know where the VAT money went. The election bell tolled for you last year. Better to have asked before it rang.
We can if we tone down profiteering at the expense of the nation and the poor. There are those who sail the seas of the economy as privateers, using their privilege and access to the seats of power as letters of marque to seize the filet mignons of government bounty and poach the share of the unwary. One may be forgiven for believing that shopkeepers will exploit breadbasket protection as an opportunity for excessive price-gouging in other areas.
We can find following winds to fill our fiscal sails if civil society groups take the time to examine our economic challenges and opportunities with sector agenda blindfolds off and nation glasses on to propose well-reflected, non- partisan advice on dealing to best advantage. In this, imagine a partnership that includes academics who are not research averse.
We can win, if we defeat the culture of dependence. Aided by political vote-buying screed, many of our people have come to expect the government to fund their outsize aspirations and redeem them from overspending and under-saving. The lethal ally of big dreams versus small planning and pocket is work aversion. In many segments of the populace, the theme song appears to be:
“Doctor, I thank thee for the name / That dignifies my soul’s complaint, / That silences the voice of blame, / That frees me from the toiler’s taint, /
That lets me loaf the livelong day.”
We must relearn and put into practice self-control and sacrifice today for a more secure tomorrow.
There is the strongest reason for changing the script for Bahamian financial management. When captains and crews refuse to make the necessary sacrifices to right their fiscal ships, international regulatory bodies become merciless Neptunes of the global financial oceans, drawing the foolish into murky depths of currency devaluation, inflation, increased unemployment and further punishments, leading to practical loss of sovereignty.
We can indeed overcome the rage and reach safe harbour. It will, however, take more than members of government as crew. While the National Cabinet has been mandated by our votes to be helmsmen, all Bahamians, all residents of The Bahamas, corporate and individual, will have to put aside partisan and personal distempers and come aboard. Together, we will have to row hard, pulling in the same direction.