The Tribune

THE six-month warning issued to the Bahamas by credit rating agency Moody’s is a consequence of the distracted and dithering approach of Prime Minister Perry Christie, according to the opposition FNM.

According to party chairman Darron Cash, if the country is to dodge a debt rating downgrade, a focused approach to revenue collection must be put in place immediately.

He said: “July 1, 2014 VAT should be off the table and a clear set of interim revenue alternatives proposed.

“Simultaneously, Prime Minister Christie must propose a meaningful set of cost cutting measures and this list must include a clear demonstration of the PM’s courage to Stop, Review and Cancel some of his padded pet projects.

“The warning from the international ratings agency, Moody’s that the Bahamas has a six months window in which to prevent another downgrade of its sovereign debt rating is deeply troubling.

“This is a type of fiscal cliff that could have been avoided if Prime Minister and Minister of Finance Perry Christie had been paying attention to this nation’s number one priority. Sadly, he has been distracted and busy chasing a shiny object called ‘BTC control’ and seeking to buy something for which he has no money to pay. This Minister of Finance has been derelict in his duties.”

The FNM chairman said that while Mr Christie was busy getting his priorities mixed up, the country has been slowly running out of time to get its fiscal affairs in order.

“Because of this failure, any downgrade would rest solely at the feet of this unfocused, dithering and ineffective Minister of Finance.

“The country did not have to be this close to the edge of the fiscal cliff. But sadly, the soft warning from Moody’s may be an indication that the country has almost no time left.

“Comments by the Moody’s vice president reveal more than the reality of little time left. The comments seem to reflect a deep lack of confidence in this government. His alarm that the VAT legislation had not even been presented to Parliament seemed to jump off the page. He is not alone at being alarmed at the backwards approach being employed. Bahamian businesspeople and consumers as a group expressed collective disbelief that the legislation is not likely to be ready until the end of January. “

Additionally, Mr Cash noted that the agency used the words “enormous”, “pretty drastic” and “sceptical” to describe the government’s proposed tax increases.

“The words they should have used were ‘draconian’, ‘unrealistic’, ‘potentially detrimental’ and ‘foolhardy’,” he said. “These words best describe the size and impact of the significant VAT tax. The process that leaves Moody’s with diminished confidence reflects the fact that the design, rollout and public education on VAT has also lacked clear thought, leadership and discipline. Prime Minister Christies is chiefly responsible for the failed rollout. His public dithering and mixed messages have not helped at all.

“Now, with almost no time left on the clock the PM must Stop Review and Cancel his plan for the foolhardy July 1 2014 VAT implementation. Secondly, if he refocuses and engages with the official opposition and the business community in a meaningful way over the next 60 days, the country can form a bi-partisan and united front and present the Bahamian people and international stakeholders — including ratings agencies — with a meaningful package of interim tax measures until the right tax prescription can be agreed and implemented.”