The Tribune

By NEIL HARTNELL

Tribune Business Editor

THE Government will "have to walk a tight line" between its pre-election promises and the need for fiscal prudence when it delivers the 2012-2013 Budget today, a senior private sector official adding that they also faced the challenge of 'tweaking' what the FNM had left in place.

Winston Rolle, the Bahamas Chamber of Commerce and Employers Confederation's (BCCEC) chief executive, told Tribune Business the private sector was focused on "business development" initiatives that may be announced in the Budget, especially the likes of the Small and Medium-Sized Business Development Bill.

Noting that the Christie administration was faced with "converting" the Budget to account for what it has promised to deliver, Mr Rolle said: "That's going to be the challenge when you set certain levels of expectation, especially when you've committed to doing a certain number of things in the first 100 days.

"It's a very fine line they'll be walking over the next couple of months." He added that the Government was likely to present a fiscal policy that could be reviewed over the next six months, then produce a mid-term Budget that has "more of a PLP flavour".

Welcoming the previous pledge by Michael Halkitis, the minister of state for finance, that the 2012-2013 Budget would not contain any new taxes, Mr Rolle said such a move would "not have been what we wanted now, because a lot of businesses are still struggling".

He told Tribune Business: "From our perspective we're going to be keen on the business development side of things, the SME Act plus the solicitation of investment, which is going to be a key driver of the economy, and education.

"Education is a keen one, as it drives every industry in the country. We want to see what their plans are for technical and vocational training."

Given the new government's emphasis on the fiscal deficit, Mr Rolle said: "A lot of persons expect that going forward there'll be a plan to reduce the deficit as well.

"That's going to be key. That's going to be one of the critical challenges at a time when revenues are under tremendous pressure and the economy has yet to turn around to the point where we can see light at the end of the tunnel. It's going to be a challenge to put together a plan to reduce the debt."

Urging the Government to review any "prudent" debt and deficit reduction plans left in place by the former FNM administration, Mr Rolle said the likes of Moody's, Standard & Poor's and the IMF had already set the fiscal prudence parameters for the 2012-2013 Budget.

"The expectations of fiscal prudence have already been sent by Moody's comments, and the comments out of the UK [Cable & Wireless analysts]," he added.

"Whatever we do has international implications, and any time you look at periods when the economy's grown, it's directly tied to foreign direct investment. At any time we have to be mindful of doing right by the country, not only how it impacts us locally here, but the international community as well."