The Tribune

The Government will be "in very dodgy territory" should it seek to interfere with how Bahamian businesses price their goods and services, the DNA leader has warned.

Branville McCartney told Tribune Business that proposals to force businesses to pass on import duty reductions in the prices they charged consumers would deter entrepreneurs from going into commerce.

He was speaking after Price Control Commission chairman, E. J. Bowe, suggested the Price Control Act will be amended to force companies to reduce product prices in line with import duty reductions and exemptions.

Such a measure appears designed to ensure businesses pass reduced/eliminated taxation on to Bahamian consumers in the form of lower prices, but many in the private sector will likely view the proposal as a further example of Government over-reach.

They are likely to perceive it as tantamount to unwarranted interference and intrusion into the affairs of private companies, and their freedom to determine their prices, margins, revenue and profitability.

Mr McCartney, who owns several businesses himself, said that while companies "ought to do the right thing" in passing on the benefit of tax cuts, the Government could not "dictate" to the private sector what to do.

"I can understand about 'breadbasket' items," he told Tribune Business, "but the Government is not able, and should not dictate, how private businesses operate.

"Private businesses ought to do the right thing, and where there is a reduction in import duties, they ought to pass them on for the benefit of consumers.

"But the Government must be careful in that regard; trying to run private business is very dodgy territory. It threatens to turn-off private business, and it's a turn-off for persons going into - and staying in - business."

Mr McCartney said the Bahamas' economic and social system was not one that contemplated the extent of government intervention seemingly being sought by the Price Control Commission.

"The Government should be very careful about intervening," he warned. "We're not that type of society where Government interferes with private business.

"Business persons are there to make a profit. That's good, and we want that. But they should also look to do the right thing, and not gouge and over-price, whether it's goods or services."

Pointing to the Bahamas' continued slippage in the World Bank's 'ease of doing business' rankings, and the ever-increasing tax burden being imposed on the private sector, the DNA leader said the Government needed to fulfill promises of post-VAT tax cuts and refunds if it ever granted Mr Bowe his wish.

Meanwhile, Rick Lowe, an executive with the Nassau Institute think-tank, warned that the Price Control Commission's plans threatened "to cross a fundamental line" with the private sector.

He warned that without the necessary freedom to plan, cost and price their products and services, Bahamian businesses - and the wider economy - simply would not grow and create jobs.

Many in the private sector believe competition and market forces will achieve what the Price Control Commission feels can be accomplished by force of legislation.

Mr Lowe was no different, telling Tribune Business: "They [the Government] don't own the business. The business has to have some freedom to decide what it can make and cannot make.

"If the consumer decides not to buy from the business, that's their right. We should not use the force of government to do that with legislation, forcing somebody to do your bidding or will for some political expediency."

Mr Lowe added that the proposed amendments, as suggested by Mr Bowe, simply threatened more bureaucracy and made it "more unbearable" for Bahamian entrepreneurs to be in business.

"It forces them to do things the wrong way and think twice about expanding," he added. "There's got to be some element of freedom, or your economy doesn't grow.

"There's certain fundamental lines Government should not cross, and this is one of those fundamental lines where you're fooling with people's freedoms.

"It's impossible for the Government to run the economy. Venezuela just tried that. You can't take freedom away from the business community to expand, and still pay the tax dollars you expect to run your behemoth."

Should the Price Control Commission get permission to proceed, Mr Lowe said some businesses may simply decide to stop importing price-controlled items, even if it inconvenienced the consumer.

"It depends how far they're going to push the envelope," he told Tribune Business. "It's going to make business even more difficult, the forms to fill in; it's the typical stuff.

"There's certain freedoms the Government needs to consider if it's serious about getting the economy going again. These types of initiative slow the economy even further.

"If someone goes into business and imports product, how can the Government say what they must charge for that? There has to be minimal Government; you can't keep over-burdening people with this stuff."