The Tribune

By SHARON TURNER

I BEGIN by pointing out that the government says it spent $956 million in fixed and capital costs in five months, between the period of July and December 2012. That is a spending rate of about $191 million per month. But don’t ask on what, because that is none of our business based on what was supposed to happen in Parliament this past Monday, and what actually did take place.

In case many Bahamians do not know, you were the victim of an armed robbery this week. What was taken from you is too big to put in a police report, the perpetrators were not your average criminal roaming the streets, and the weapons of choice were power, arrogance, incompetence and laziness.

On Monday, the government was expected to present its Mid-Year Budget Statement along with the associated documentation, hereafter referred to as “the budget”. Many were keenly interested because we wanted to know exactly how our tax dollars have been spent thus far. We wanted to know which Ministries spent what, and on what. We wanted to know in which ways the government will cut spending and how it has decided to allocate or re-allocate funds to address critical needs. We also, and very importantly, wanted to know how our government was going to work realistically and expeditiously on cutting our national debt.

And these are the items stolen from you in Monday’s robbery – because the government did not table a mid-year budget at all. The only things it put on the table of your Parliament were the Communication by the Prime Minister and another bill for you to pay – this time in the form of a resolution to borrow another $100 million dollars – this is on top of the over half-billion ($550 million) your MPs voted yes to borrowing just six months ago.

Meantime in the Prime Minister’s Communication, instead of providing the details of our economy’s performance under his administration in his own words, what did he tell the nation? For details about the economy – read what the Central Bank has to say on the matter. Do any of you remember seeing “Central Bank” on the ballot on May 7, 2012?

Now because both the Opposition and the media did not see the need to point out these absolutely critical things – much of the public did not know what was done to them in the House sitting of Monday, February 25. But what was done was this – the government refused to carry out the process of an actual mid-year budget analysis. They generated no details whatsoever on expenditure and revenue. So MPs walked out of Parliament to prepare for a “budget debate” with what they walked in there with – their keys, their briefcases or purses - and nothing else.

I will leave the political arguments to those who call themselves politicians. What I will focus on is why we as Bahamians need to understand the importance of accountability and transparency in government, and why we need to see it as the most egregious of acts when our government refuses to be both transparent with us and accountable to us.

The Purpose of the Mid-Year Budget

The Mid-Year Budget process was instituted by the FNM administration as a new and what it termed “progressive” step in public sector reform and a means of enhancing accountability and transparency in the handling of public finances.

A key feature is the opportunity for Ministers to report to Parliament and the Bahamian people on the progress they are making in their portfolios at mid-year, and to make the case for additional funding if needed.

The documentation that is supposed to be tabled with the Prime Minister’s Communication should contain the necessary information for this process. This documentation is also supposed to show the progress of expenditure on Recurrent and Capital Account and on Recurrent Revenues, and is to be tabled so that Parliamentarians can query all aspects of the management of the public’s finances, and question Ministers on the same. Without this information, Parliament cannot put those questions to the government.

This information was not tabled, which means a Mid-Year Budget process was not carried out by the government of the day. Monday’s sitting of Parliament was an affront to the Bahamian people because the government did not do what it both ought to and pledged to do. Without the budget, next week’s debate will be little more than a nauseating violin movement of speech making, and the “it’s Hubert’s fault” blame game – a game that should be affixed with the warning label “to induce vomiting.”

$100 Million More in Borrowing

Here is a quick lesson in the running of a country. If I start a project today, whose length of time goes beyond my term in office because I have been voted out, whatever is left to be paid must be paid by the new government. That is not an unpaid bill – that is called the continuation of governance. The country does not stop because the government changes – neither does its expenses, and neither does the public service. So the Prime Minister should not engage in attempting to dumb down the Bahamian people the way he did in his Communication on this issue.

When the government got approval to borrow a half-billion dollars six months ago, it said it needed the money to pay bills. Okay. So now it is saying it needs $100 million more to pay more bills – bills they say actually existed at the time they asked for the half-billion. So, who turned on the lights in the Prime Minister’s office this month so that he could suddenly see this mysterious $100 million in “unpaid bills” that he did not see last May?

Furthermore, what the Prime Minister announced as his reason for needing to saddle us with more borrowing was not true in two of the three cases he stated. He said he needed it to pay for the 52-week job programme. That programme was already budgeted for with the monies approved. Then he said he needed it to pay lump sum payments for teachers and public officers. Again those monies were already budgeted and approved.

And if the Prime Minister doesn’t believe me on this, he can ask his Education Minister, who announced that teachers were straight because their money was already in the budget. So perhaps he should have consulted with his Minister before stating that as a reason to borrow another $100 million on the backs of taxpayers.

Since There is No Budget, Here is What We Don’t Know:

Revenue - The Prime Minister told the country revenue for the mid-year is down, and that would be a wonderfully useful statement if he told us how much revenue his government expected to have collected up to this point – but he did not. “Down” is not a number, it is a word. Budgets are about numbers.

We do not know how much has been collected thus far in customs duty. We do not know what was collected in real property tax. We do not know what was collected in business licence fees, in casino taxes, in hotel taxes, in banking taxes. All we know is we’re “down”.

And on the subject of “down”, the government has advised via the Communication that revenue for the full fiscal year is now expected to be down by $120 million. But here is the key problem – the Prime Minister announced that the economy – as projected - grew by 2.5 per cent in real terms. Well if the economy has grown, why are you collecting millions less instead of more?

Meanwhile, the Prime Minister said the excise tax on trucks less than 20 tons will be dropped by 20 per cent. This he said, is to assist small businesses and will result in increased revenue because now those businesses will go out and buy new trucks since the duty is lower. This raises a few questions, especially given that the Prime Minister never stated how much extra revenue he expects this tax decrease to create.

If my small business is trucking as one example, and it is struggling, I’m not likely to be able to buy a bunch of new trucks just because the tax is 65 per cent instead of 85 per cent. And since the price of gas for these trucks won’t be lowered, at minimum, that particular bill for me won’t improve.

If some of the small businesses the Prime Minister is referring to are car dealerships in the country – most of their stock is just that – cars, not trucks. If I as a Bahamian want to benefit from that tax drop, I will get my truck from abroad instead of a car dealership here so I don’t have to pay their mark-up. How much are the car dealerships expected to benefit in dollars and cents from the tax decrease?

The reality is, the Prime Minister already told the country that even though the economy has grown, he will not collect $120 million that he expected to. So that means one of the avenues of revenue collection is under-performing, and I’m willing to wager that area is Customs. If that is so, then how is the government expecting to bank on a gold-rush of revenue from new trucks if it is not collecting duty as it is supposed to?

Expenditure – In a chart provided in the Prime Minister’s Communication, the government says it plans to spend $101 million less on Recurrent Account. Recurrent Account is where you pay your salaries, NIB contributions, insurance, utilities and operational costs for each Ministry and Department.

These costs are relatively fixed. If you are going to cut these costs by $101 million over the remaining four months of the fiscal year, but you have not announced any layoffs (thereby decreasing salary costs), then which Ministries and Departments won’t be paying their power and water bills, or buying toilet paper, printer ink and gasoline?

Since no budget was created, there is no way for us to know where that $101 million will be cut from. And since no budget was created, we are unable to see which Ministries and Departments may have insufficient funds left to meet their fixed costs for the remainder of the fiscal year, whereas others may have extra money that could be re-allocated to balance out shortfalls. In layman’s terms, we call it “moving money from here to there.”

The government also says it will cut its expenses on Capital Account by $37 million. But the Prime Minister did not announce a single public works project that will no longer be done because $37 million is being pulled from the Capital Account.

Salaries and operations for ZNS are provided for on Capital Account. Operations of government entities and corporations such as Bahamasair, BEC and Water & Sewerage also come from this account. So who or what will be losing funding in this $37 million cut?

And though the Prime Minister did not announce it in his annual Budget Communication, $1.9 million or $50,000 per MP was budgeted for constituency allowance (an allocation line item created by the previous government). How many MPs have received any of this money thus far, and what have they done with it in their constituency?

Incidentally, as for the Prime Minister’s action plans in his Communication about the way forward for revenue collection and generation – there is a word for that portion of his speech – plagiarism. See budget communications between 2007 – 2012 for confirmation.

The Budget That Wasn’t

There is no point in singing to us a lullaby about each Minister giving us those details when he or she speaks in the debate. Firstly, the budget should have been created and tabled so that Parliament and the public could have that information.

Secondly, there are very few Bahamians, starting firstly with those in the media, who listen to every single contribution in a budget debate. And thirdly, how much hope are we supposed to have in that happening anyway, when just a few days before the Mid-Year Budget That Wasn’t as one major example, Minister Brave Davis told the nation he had no idea what was spent on Urban Renewal – which is only one area of his portfolio.

He would absolutely have had that information if an actual mid-year budget process was carried out. But it wasn’t. And because it wasn’t, that is the clearest indication necessary that the government has no intention of letting the Bahamian people know how it has spent their money to-date, and why its announcement on economic growth does not gel with its announcement on decreased revenue collection.

The Prime Minister and Minister of Finance demonstrated in Monday’s sitting that he has no desire of putting himself in a position to be held accountable, by providing requisite expenditure and revenue information to Parliament and the public.

If I keep you blind, you cannot see to ask me a thing, nor can you accuse me of anything, because I have only told you what I want you to know and that’s it. And because I believe you have no way on your own as a regular Bahamian of getting that information outside of me – you lose, and I win.

That is the game that was played this week in Parliament, and it was a tag-team effort – because the Prime Minister played the charade and the Leader of the Opposition was his back-up singer. The Opposition Leader did not provide a single piece of information to refute anything the Prime Minister said. He did not even do the elementary thing of telling the Bahamian people that the government did not produce a mid-year budget.

The overwhelmingly alarming thing about all of this is that we are still a country that has already experienced both a credit and economic outlook downgrade in the past few months, and those ratings agencies are not about games – they are about serious business.

Meantime with record unemployment, record debt, the consistently late payment of government bills and a government that has arrogantly demonstrated its unwillingness to account for any of it – there is nothing even remotely entertaining about this “budget that wasn’t” game.

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