The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Tax Coalition will “beat the drum for as long and loudly as we need to” over its demands for the Government to introduce a Fiscal Responsibility Act, its chairman promising: “We’re not going away”.

Gowon Bowe told Tribune Business that with Value-Added Tax (VAT) now implemented, the Christie administration and its Ministry of Finance would be mistaken to think the private sector will give up on demands for greater transparency and accountability in government spending.

“I wouldn’t want anyone in the Government and Ministry of Finance to think that was left at the doorstep,” the Coalition for Responsible Taxation’s chairman told this newspaper.

“It’s one we’re going to beat the drum for, for as long and as loud as we need to, to get movement on their part.”

The two key instruments to achieving this goal, at least as far as the private sector is concerned, are a Fiscal Responsibilities Act and a Freedom of Information Act.

Combined, they would in theory place restrictions on the Government’s annual spending and borrowing plans, and could be used to establish ‘balanced budget’ requirements and so-called ‘fiscal rules’, while allowing Bahamian taxpayers to uncover information on how their dollars are being spent.

Prime Minister Perry Christie, though, in his May 2014 Budget communication rejected suggestions from the Government’s own advisers about creating a so-called ‘fiscal rule’.

His administration has so far been reluctant to even discuss a Fiscal Responsibilities Act, giving the impression that the Government does not want to entertain anything that might restrict its ability to spend as it pleases.

And many in the private sector believe that by agreeing to VAT and its implementation, the Coalition and the rest of the business community have given up the leverage they once held to force real reform in government spending.

Undeterred, Mr Bowe told Tribune Business that he and the Coalition will persist.

“We are certainly going to be pushing that with the Government, and highlighting that it is really just a hallmark of transparency, accountability and the way to judge their stewardship in the long run,” he said, “and not get into the blame game over who is responsible for legacy debts left behind. A Freedom of Information Act is key to all that.”

Mr Bowe added that Barbados is about to enact legislation restricting government spending, although it provides flexibility and the ability to vary expenditure limits in an emergency, once approved by Parliament.

Mr Bowe’s determination was backed by Edison Sumner, the VAT Education Task Force’s co-chair, who said the Government had to be held accountable for how the extra tax dollars were spent.

“We also want to hold the Government accountable for what they do with the funds raised from the VAT system, and to make sure they’re applied where they should be applied,” Mr Sumner told Tribune Business.

While VAT was initially billed as essential to eliminating the Government’s consistent $400-$500 million annual deficits, and reduce the $6 billion national debt, Prime Minister Perry Christie’s New Year’s address appeared to indicate that the extra monies will be put to other uses.

He made no mention of deficit or debt reduction, instead hinting at a renewed government spending spree, talking about the country’s social and infrastructure needs.

Mr Sumner, meanwhile, also agreed with Mr Bowe’s calls for a Fiscal Responsibilities Act and Freedom of Information Act, with the Government seemingly ‘dragging its heels’ on both.

“We also want to be sure the Government holds up its end of the bargain, and shows prudence in the management of the financial and fiscal affairs of the country,” Mr Sumner said.

He urged the Government to heed recommendations from both the Coalition and New Zealand consultants when it came to the proposed legislation, “and ensure we have full compliance with what’s expected of the Government and private sector”.