Turnquest defends fiscal projections, says Bahamians should be able to trust political leaders

Turnquest defends fiscal projections, says Bahamians should be able to trust political leaders
Deputy Prime Minister and Minister of Finance Peter Turnquest

NASSAU, BAHAMAS — Deputy Prime Minister and Minister of Finance K Peter Turnquest has accused the Opposition of spreading misinformation in a bid to score “partisan political points”.

He was referring to parliamentary debate over the borrowing of the previous administration and the current Minnis administration.

PLP Deputy leader and shadow finance minister Chester Cooper cast doubt on the government’s fiscal projections during his contribution, charging that the Free National Movement’s fiscal management has made the current economic crisis even worse.

The Exuma and Ragged Island MP has accused the Minnis administration of borrowing $1.5 billion net to date with nothing to show for it; claims the Minnis administration has pushed back against strongly.

In a statement released by the Ministry of Finance Tuesday night, Turnquest said Bahamians should be able to trust that the figures presented by their political leaders as an accurate representation of the country’s fiscal position.

“The Ministry of Finance’s record of transparently reporting on fiscal matters speaks for itself,” Turnquest said.

“In the past three years, we introduced quarterly budget performance reporting; we produced annual fiscal strategy reports; and we passed Fiscal Responsibility legislation that makes this kind of reporting a legal obligation for this and all future governments. Accurate fiscal reporting is important to us, so we have published a wealth of information about the Country’s debt activity on the budget website (www.bahamasbudget.gov.bs).”

Turnquest said the Minnis administration has “raised the bar on fiscal transparency in ways that literally no other administration can compare”.

“What is important to this Administration, in the midst of the crises we face, is not who borrowed more or less; after all, our objective continues to be balancing the budget and reducing our debt to GPD ratio or overall debt profile,” he continued.

“What is important to this Administration is using government revenue and borrowed funds in an effective and responsible way—to invest in Bahamian families, communities, businesses and the nation as a whole. We only borrow when and what we need to invest in our priorities and nothing more. For the sake of public trust and financial literacy, it is our responsibility, however, to provide factual information and to inform the public about the global standards for calculating and reporting debt activity.”

Turnquest further pointed out that gross borrowing is a “misrepresentation” of the impact of government financing activities on debt because it includes customary and typical government refinancing and interim borrowings that are repaid, which have no impact on the Government’s end of year debt.

“Nobody that is credible would use gross borrowing if they understood these matters.  The technical name that we employ for Government Debt is the Direct Charge. These are the obligations that the Government is directly accountable for,” he noted.

Turnquest noted that there is a standard calculation to determine how much money any administration increases the Direct Charge (or Government Debt) and that during the last Administration, Government debt increased by $2.6 billion.

This figure he pointed out represents their net borrowing and not their gross borrowing. He also noted that between 2002-2012, Government Debt increased by $643 million. The current Minnis administration he noted  has increased Government debt by $977 million in  the first two years. Given the misinformation being circulated in the Public, I presented a comparative chart in the House of Assembly yesterday, to accurately show net borrowing across administrations within the first two-years, to provide accurate data on government debt activity.”

Turnquest said: “I have seen a new meme circulating where another incorrect comparison is being made between the former Administration and the current Minnis administration. The proper net borrowing of the previous administration (over five-years) is being compared to the estimated gross borrowing (over 3-years) of the current administration.

“The author of that meme – like the members of the Opposition – clearly understand that net borrowing is the appropriate figure, but they have opted to score partisan political points by spreading misinformation, as they have opted to use the incorrect figure to reflect this administration. My admonishment continues to be: If you know better, do better.”