The Tribune

By  NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

The Opposition’s deputy leader yesterday expressed scepticism that the Government would deliver on its latest promise to revive a Mortgage Relief Plan, saying: “We’ve been to this picture show before.”

K P Turnquest described yesterday’s mid-year Budget promise as “more of the same”, adding that the persistent high unemployment and under-employment rates meant any scheme was likely doomed to fail.

“I am not confident that anything will come from that at all,” the FNM’s finance spokesman told Tribune Business. “The reality is that we’ve all been to this picture show before.

“Nothing has changed with regard to structural unemployment and under-employment.”

With the official jobless rate at 14.8 per cent, and the economy not expanding fast enough in terms of income and job creation, Mr Turnquest said troubled borrowers would still likely experience difficulty in serving restructured mortgages with more generous terms and repayment rates.

Prime Minister Perry Christie, though, in unveiling the mid-year Budget said the Government has held “considerable discussions” with the commercial banks on reviving its Mortgage Relief Plan, with both sides developing a Memorandum of Understanding.

“The required steps will now be taken to move forward with the legislation currently before the House of Assembly, as well to introduce a new mortgage policy initiative which together should set the framework for meaningful mortgage relief in the Bahamas,” said Mr Christie.

 During a press conference following the mid-year Budget, Mr Turnquest added: “I dare say that what is being contemplated today is more of the same. That those who can already afford to make arrangements with their private lending institutions will benefit, and those who find themselves unemployed or underemployed will continue to lose their homes.”

In 2012, the Government had committed roughly $10 million to its Mortgage Relief Plan, which was supposed to benefit around 1,000 out of an estimated 4,000 delinquent homeowners.

Mr Christie later admitted in the House of Assembly that the plan would only assist “four or five” people.

“I note that the Bahamas Mortgage Corporation (BMC), an agency controlled by the Government, is also foreclosing on mortgages. If there is to be any assistance given with regards to mortgage relief, one would expect that the BMC, a government-controlled entity, would be the first place that we would see some relief,” said Mr Turnquest.

  The Opposition also questioned the Government’s use of Value-Added Tax (VAT) revenue, the source of the $16 million allocated to make CLICO (Bahamas) policyholders ‘whole’, and how Bahamasair was able to secure a $100 million

loan for new aircraft given its debt history.

“The government had initially said it was going towards paying off the national debt with the VAT revenues, and now they’re saying that it’s going into the consolidated fund and being used for any number of programmes,” Mr Turnquest said.

“That is an unacceptable turn of events, but it is par for the course for this government; saying one thing and doing another, just as they did with the gambling referendum.”

As to the CLICO situation, Mr Turnquest added: “The question is where in the Budget does that money come from? As I recall there is no line item in the 2015-2106 Budget that calls for $16 million to be paid to CLICO policyholders.

“While we are very happy they will be made whole, the question for us becomes who’re we going to rob in order to make this payment.”

Mr Turnquest went on to question how Bahamasair was able to secure a $100 million loan for new aircraft. “We understand that there is no guarantee given by the Government, and Bahamasair was able to secure that loan on it own,” he said.

“I don’t know what institutions would give a loan to an entity which has lost over half a billion dollars over its life without some kind of guarantee from its shareholders.

“It’s going to be interesting to to see how the Government explains how a technically bankrupt entity is able to secure a loan for new aircraft without the approval or resolution by Parliament.”