The Tribune

By SANCHESKA BROWN

Tribune Staff Reporter

sbrown@tribunemedia.net

MINISTER of State for Finance Michael Halkitis said the government is taking a “balanced approach” to growing the economy and better managing expenditure in an effort to prevent a downgrade of the Bahamas’ sovereign credit rating.

His comments came after Standard & Poor’s senior analyst for the Bahamas, Lisa Schineller, said there is “at least a one in three chance” that S&P will downgrade the Bahamas’ rating within the next 24 months.

Last week, the credit rating agency also altered its outlook on the Bahamas from ‘stable’ to ‘negative’. Mr Halitkis said the government plans on tackling the potential problem in three ways.

“We have to take a balanced approach. To make this better we have to grow the economy, improve our revenue and contain our expenditure.

“In simple terms, there has to be growth, we need more money and we have to watch how we spend. We need to do a better job of collecting what is due to the government – not necessarily raising taxes on people but just making sure we collect what is due.

“We also have to watch every penny we spend and make sure we are getting value for our money,” he said.

Mr Halkitis said the government already has initiatives in the pipeline to grow the economy and improve revenue. He said: “You would have heard about our customs modernisation programme. With the help of the IDB, we are modernising customs, putting in a new IT system and putting in a better human resource management system.

“In terms of the real property tax, we are doing some reforms there as well. We are trying to make sure we bring the tax roll up to date so that all the properties that are supposed to be on the roll are on the roll, so we are collecting more in that way.

“We are looking at some of our other government agencies to plug up things as well see if there are any loopholes and more effectively collect.

“What we also have to do is look at new streams of revenue where we don’t collect now but there may be opportunities to start collecting. We will talk about these things as time goes on.”

Mr Halkitis said the Minister of Finance, Prime Minister Perry Christie, is also working “hard” to secure new foreign investments.

S&P also forecasted that the Bahamas’ net government debt would hit 45-47 per cent of GDP by 2013-2014 – a double digit rise in three years.