The Tribune

By NEIL HARTNELL

Tribune Business Editor

A LEADING businessman has warned Bahamians to brace for "substantial increases in taxes over the next five years", arguing that the Christie administration could not avoid this if it was to slash "mind boggling" $500 million-plus fiscal deficits.

Calling on political leaders to find "the testicular fortitude" to tell Bahamians there would be a price to pay for all the Ingraham administration's infrastructure/capital works spending, Dionisio D'Aguilar told Tribune Business the Government would be "delusional" if it felt it could evade tax/fee increases.

Acknowledging that he, like everyone else, would "bitch and moan" about tax increases, the Superwash president said it was "better to pay now than go bankrupt later", with this nation's national debt set to breach the $5 billion mark within the next year and continue rising thereafter.

And Mr D'Aguilar also urged the Christie administration not to embark on any major capital works projects of its own, just merely finish those the FNM had started. This, he said, was because the Government needed a pause to "catch ourselves" from the heavy recent deficit spending, criticising the new administration for effectively shelving any moves to tackle the problem for another year.

"It's definitely out of hand," Mr D'Aguilar told Tribune Business of fiscal deficits projected to come in at $504 million for the 2011-2012 fiscal year, and $550 million for the 2012-2013 fiscal year.

"The national debt is mind boggling and mind blowing. But I don't understand the problem with the politicians. Every last one of them is afraid to tell the Bahamian people why they've now got to pay.

"We need someone with the testicular fortitude ready to stand up and say: 'We've got new roads, a new stadium, a new port and new airport, and now we have to pay for it'."

Describing as "a joke" the Government's description of its finances as a Budget, Mr D'Aguilar added of the fiscal position: "Politicians have to realise it's out of control. We don't mind these new things, but tell us what we've got to pay. It's ridiculous. It's unbelievable. It's unthinkable."

The last comments were a parody of remarks by former Prime Minister Hubert Ingraham that were seized on by the PLP during their general election campaign. And, similarly warming to his theme, Mr D'Aguilar added: "If we want a country that has first world facilities, we have to pay first world prices.

"You can't fool the Bahamian people into thinking they can have something for nothing. We've got to start doing something to offset this spending. There's so much revenue sitting on the table. There are so many revenue streams we can deploy.

"Everyone's going to bitch and moan, but we're going to have to pay more taxes. It's better to pay now than go bankrupt later. Unlike Greece with the Eurozone, there will be no one to bail us out."

The Superwash president added: "I, more than anybody, don't want to pay more, but our politicians are forcing us to do that. We have no choice.

"Everyone is going to bitch and moan, but we can't let the country continue on this road. A $500 million deficit is unbelievable, but come on. We as a people have to pay for decisions made by politicians to improve infrastructure. We don't mind the improvements, but don't tell me we don't have to pay for it. We can't have it for free."

Assessing the implications for the Government's fiscal policy, Mr D'Aguilar told Tribune Business: "I'm expecting there are going to be substantial increases in taxes over these next five years. I don't think the Government can avoid it, and they're deluded if they think they can.

"Unfortunately for them, the FNM had embarked on a substantial amount of capital projects. I really don't think the PLP can do anything else other than complete what the FNM started.

"Other than that, we need a period to catch ourselves and try to get some revenues in to feed the debt or reduce the debt. Or the chickens will come home to roost. It's only a matter of time.

"Stop spending money you don't have, and if you want to spend money, come to us like men and say taxes have to go up to pay for these services."

The businessman added: "Governing is not always about popular decisions. At the end of the day, politicians do us a disservice by telling us we can have something for nothing.

"It's better to govern properly for five years than tell us a lie, and you're kicked out after five years anyway. The FNM spent so much money and got kicked out. Just tell us the truth."

Summarising the bleak short-term fiscal future for the Bahamas, Mr D'Aguilar told Tribune Business: "This is not a period of reducing taxes. Anyone looking at the deficit realises it cannot be sustained.

"We have to do it now, but have to wait another year while the PLP decide what to do. That's another year of running a huge deficit."