PM hails cut in nation’s deficit

Prime Minister Perry Christie.

As of Tuesday, March 8, 2016

By RASHAD ROLLE

Tribune Staff Reporter

rrolle@tribunemedia.net

PRIME Minister Perry Christie, during his mid-year budget communication in the House of Assembly yesterday, said his administration’s fiscal plan “has been successful,” adding that the government has reduced the country’s deficit by almost 75 per cent.

He revealed that on a year-over-year basis, recurrent revenues are some 31 per cent, or $217m, higher this year than they were in the first half of 2014/2015.

According to Mr Christie, the most significant contributor to this increase was value added tax (VAT) “to the tune of $317m.”

VAT was introduced in January 2015.

However, he admitted that the Bahamian economy grew at a slower rate than expected last year because of modest growths in the tourism sector and the continued delay of Baha Mar.

“The Ministry of Finance and the (International Monetary Fund) now estimate that our economy grew by just over one per cent in 2015 as compared to the projected 2.3 per cent in the May budget communication,” he said.

The slower than projected growth happened against the backdrop of a global economy that has also seen its growth projections revised down in recent years, Mr Christie said.

“The moderate pace of growth in our economy continued to reflect the ongoing though still modest expansion of output in our tourism sector as well as the boost to construction activity provided by foreign investment projects,” he said.

Nonetheless, Mr Christie said the Ministry of Finance and the IMF forecast growth in the economy between 1.5 per cent to just over 2 per cent for this year and the next.

Mr Christie highlighted a number of tourism projects throughout the country that he believes will help reduce the country’s high unemployment rate.

He also touted the deficit reduction that has occurred under his administration, saying that the deficit will decline to $141 million this fiscal year, a “$398 million improvement from the deficit of $539 million posted in 2012/2013.”

Mr Christie said that the government’s recurrent expenditure and revenue along with its capital expenditure are in line with its original forecasts delivered during last year’s budget communication.

Nonetheless, the significant changes in recurrent revenue compared to previous years reflect the country’s transformed tax base since VAT implementation.

At he same time, he said non-VAT revenues were $100 million lower this fiscal year than in 2014/2015 because of rate reductions to import duties, excise taxes, tourism taxes and stamp taxes.

Mr Christie said the annual increase in real property tax arrears is decelerating. He did not provide data, however, showing whether the government has been successful in collecting overdue arrears even though it has been two years since his administration outsourced the task to the private sector after successive administrations failed to address the issue for years.

Mr Christie said his government is putting particular focus this year on managing the public’s finances more efficiently through a public financial management system that is being launched.

The programme, he said, will enhance his ability to monitor the way public polices are implemented in key ministries, increase access to statistics and develop an improved “public procurement system with fair and transparent rules, generating savings and value for line ministries and relevant public entities.”

In addition, a key component of the government’s agenda this year will be the funding of public private partnerships (PPP) to the tune of $200 million.

As it relates to this, Mr Christie said the government is close to concluding agreements in connection with roads and government buildings, as in the case of the Clarence A Bain Building, the Levy Building and the Post Office Building.

Debate on the mid-year budget will begin next Monday.

More like this story

sheeprunner12 8 years, 8 months ago

The Minister of Finance needs to explain the mysteries of the new PLP National Budget format .......... this does not require another IMF loan (we hope)

Honestman 8 years, 8 months ago

"He also touted the deficit reduction that has occurred under his administration, saying that the deficit will decline to $141 million this fiscal year, a “$398 million improvement from the deficit of $539 million posted in 2012/2013.”

Is this supposed to bring us comfort? It is still a deficit thereby ADDING to the National Debt!

Hogfish 8 years, 8 months ago

Perry the dumbest nigga i know. except for us dumb niggas that voted you.

we taxed more than any other time in history and you still adding to the debt. You can't hide behind the bullshit anymore. even us dumb niggas see past it and the fixed numbers.

ya ass is out.

legacy of theft, corruption and failures and a destroyed and hurting peoples.

Lord God will pass judgement on you evil soul and you WILL rot in hell.

Emac 8 years, 8 months ago

Amen

proudloudandfnm 8 years, 8 months ago

Basically the PLP are celebrating over taxing us....

Zakary 8 years, 8 months ago

Basically the PLP are celebrating over taxing us...

Successive governments have always been able to what was done here in this budget without VAT. The fact that VAT was necessary to pull this off just illustrates how bad the economy has become.

If we assume a 0.93% GDP growth rate this year, which is my go to conservative value of 2014, we could estimate the GDP at around 8.67 billion. That means that we would have a current deficit of about 1.6% of that GDP according to this budget’s estimate. GDP growth isn’t likely to change in my opinion.

I often like to tell my friends that the government budget correlates with the election cycle, and we borrow more and more on each cycle as a trend. The million dollar question is can they maintain this? This is why I believe they initially went for 15% VAT because 7.5% can’t quite do the job.

http://cdn.tradingeconomics.com/charts/…" width="100%" height="100% border="0" alt=".">

TalRussell 8 years, 8 months ago

Comrades just think about it. At least Egypt's Military appointed President Sisi, asked his citizens to "only listen to him" by volunteering to send in their money's to the government.
The PLP cabinet stands up in The People's Honourable House of Assembly to brag how they are fleecing Hundreds Millions Dollars in VAT taxes, from the pockets their unsuspecting citizens. Mostly from pockets of the poor people.

....//https://www.youtube.com/watch?v=-OknE-E0QfI

sheeprunner12 8 years, 8 months ago

Who pays taxes and then expect to get NO benefits from the taxes?????? ........ Perry is now returning the VAT taxes to "the people" ......... BOB bail-out, CLICO pay-out, Carnival rush-out, BEC sell-out, Bahamasair rent-out, NHI cook-out and BAMSI give-out ...... if you are too dumb to see it, that is what he is telling all of us between the lines

SP 8 years, 8 months ago

........................... We would much rather "Hail A Cut In Nation’S Tiefin"! ........................ http://tribune242.com/users/photos/2015…

MonkeeDoo 8 years, 8 months ago

Tal: I dunno what happened to u but you been talkin sense these last couple a days. You exactly right on who is bearing the real burden of VAT. People with business or business connections can claim their Vat outflow back. Poor people just gotta suck it up !!! You ain't say nuthin lately bout the dock. ? It still there ? We locals could get to it ? I want to walk it and smell the fresh air out there. Lemme know if you going sometime so I could meet you there.

banker 8 years, 8 months ago

I noticed that too. Maybe the contacts on the PLP brain implant are corroded and common sense is taking over. Or ... maybe there is a patriot hidden down there somewhere.

MonkeeDoo 8 years, 8 months ago

All that Greek food got Christie belly bloat right up !

MonkeeDoo 8 years, 8 months ago

http://tribune242.com/users/photos/2016…

You think Doc sittin' right there would tell him to lose some weight eh. But B.J. hopin' he pass though so he could move up - so booff !.

watcher 8 years, 8 months ago

This is how Perry seems to do his calculations...I borrowed $400 from you last year. This year I only borrowed another $100. See !! This year debt is DOWN 75% !! (But, but, but..... Mr Christie.....now you owe me $500) Well, maybe that's so....but at least I don't owe you $800 like I could have done if I borrowed another $400 like last year.....so let's not confuse the populace with too many numbers, because they aren't too smart. So....like I said before......This year debt is DOWN 75% !!

asiseeit 8 years, 8 months ago

The only thing government has done is TAX the Bahamian people into the poor house, they have NOT cut their spending or been fiscally prudent. The reduction in the deficit is down because of the Bahamian people being taxed, government has done nothing positive nor has it made any changes that would cause the deficit to go down. Perry needs to stop taking credit for the reduction in the deficit, the Bahamian people deserve the credit because it is OUR money that has caused the reduction! F#@K the PLP THEIVES and LIARS!

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