The Tribune

OVER the weekend, we had an interesting, but troubling talk with two businessmen. One was particularly concerned by the confusion being caused in the business community, which had resulted in the sudden – and unexpected – drop in business.

About two months ago, he said, the building supplies industry “picked up substantially”. Of course, elation immediately set in because it was felt that the Bahamas had at last turned the corner and Bahamians were sufficiently confident to start building again.

However, about two weeks ago, the market started to wobble, businessmen were uncertain by confusing signals coming from government — taxes and levies were jumping at them from all sides. Not grasping what it all meant, they decided to pull back and take stock.

Suddenly, said the young man, his business started to slow and go into idle.

For example, he said, government decided to remove the $10 stamp tax and replace it with an increase of one per cent of the cost of landed goods. “One per cent,” he said, “doesn’t seem much, but when you are dealing with a large shipment what was once $10 has mushroomed overnight into $700.”

This increase moves down the line until it hits the unwitting consumer in his pocket book.

Politicians, unversed in business, are sitting around a table making rules that govern the market without understanding the instability they are creating in that market.

Their levies on the business community, it is true, are making it possible for the continued operation of government, including all its built-in inefficiencies. What is angering business persons are comments such as “we shall now have enough to pay government’s bills”. However, the local community fails to see any effort being made by the government to institute savings that will assist the man in the street to pay his own bills.

John Q Public blames greedy businessmen for the high cost of living, forgetting that it is government dropping taxes all around that pushes up prices – high prices that will eventually lead to staff lay-offs to cut costs.

The real blame stops at the cabinet table, and the men and women who sit around that table.

Firstly, Bahamians with their tax dollars are supporting too many Cabinet ministers. When selecting his cabinet, Prime Minister Christie’s justification for appointing the largest cabinet in this country’s history was that government had become so complex that he needed more hands on deck to assist him. From our observations, we now firmly believe in the idiom that “too many cooks spoil the broth”. This is one political broth, which in the past 15 months has not only been spoiled, but has gone sour. Some sifting is urgently needed.

In the police force and other areas of government, persons already retired on pension have been brought out of retirement to fill top positions. If government leaders were so interested in giving younger Bahamians an opportunity, they would have recruited the best from the ranks for the top jobs and brought in young Bahamians at the bottom for training so that they too could start to climb the ladder to success.

The Bahamian taxpayer is paying for a bloated civil service. Many civil servants are excellent servants of the people, others are just slackers — clock-watching nine-to-fivers who are taking advantage of everybody. Yet the average Bahamian has to be taxed to pay for their indolence. As for the overtime scandal in places like BEC, words alone cannot sufficiently condemn that theft from the unsuspecting public. Privatisation is the only cure for such a cancer.

Excessive spending on foreign embassies, high commissioners and ambassadors need a thorough investigation. Also unnecessary travel by certain ministers, and their trailing entourages, should be trimmed. And — with businesses pulling back, and unemployment bound to worsen — it is insensitive for any minister to suggest a salary increase for parliamentarians. But at least one of them has already done so. He apparently feels justified in his position, and seems indignant that anyone should suggest otherwise.

Then we have to look at party lackeys filling positions, not because they are qualified for those positions, but simply because they are party lackeys. A thorough investigation of this would shake many trees that are bearing no fruit. But the taxes of unsuspecting Bahamians are being raised to pay for the advantages that their politicians are taking of them.

But we digress.

Our young businessman continued to talk about the small, seemingly insignificant levies that are pushing up prices in the market place. For example, he said, a businessman had to pay a Custom’s inspector $12.50 an hour to inspect a shipment of imports. With the new levies, he must now pay him $50 an hour.

The other day, he said, he was talking with a Bahamian who works in a bank. He was told that because of the uncertainty that looms over bankers’ heads in the shadow of the Homeowners Protection Bill – where bankers cannot collect their loans from delinquent mortgagees — banks are now holding back on mortgages for home owners.

“Do you realise how many businesses and trades this is affecting?” asked the young man. “This is what we are feeling right now,” he said.

If Bahamians can no longer get mortgages to build their homes, then not only will building suppliers be hit, but so will the architects, the electricians, the carpenters, plumbers, the heavy duty equipment operators, the furniture and appliance stores, the list is endless. When construction is crippled, the whole country is affected, he said. That’s when layoffs start. “They create this situation and then look to us to create the jobs!” he scoffed.

He then turned to what was once a lucrative business for some Bahamians — the importation from the US and resale of used car tyres. New car tyres are so costly, he said, that these cheaper tyres were a good business and provided a service for those who could not afford the new ones. However, the regulators in their wisdom have decided that on top of Customs duty to tack another $20 on each tyre as an “environmental levy”. At the end of the day, the used-tyre businessman on a large shipment would have to pay an extra $20,000 in taxes. “This virtually wipes out this business. There can certainly be no more cheap tyres for the Bahamian who can’t afford a new tyre!” he said.

As for the talk of VAT, he said, “it has people scared stiff. No one knows what’s happening.”

And so, business, thanks to our ever so clever politicians, is now in a wait and see mode. It seems that only a fairy godmother can now wave that magic wand.