The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

An FNM candidate yesterday said it was “mind boggling” that the Progressive Liberal Party’s (PLP) 2017 election ‘action plan’ fails to mention how it will address the Bahamas’ fiscal crisis, adding: “They don’t want Fiscal Responsibility.”

Dionisio D’Aguilar, the Opposition party’s Freetown contender, told Tribune Business that the governing party was “taking the easy way out” by giving constituents and supporters public sector jobs.

He described the Christie administration’s policy of constantly increasing the tax burden on productive industries to fund a bloated public sector as “a recipe for disaster”, with the civil service now too “overwhelming” for taxpayers to support.

The PLP’s ‘action plan’ makes no mention of the Government’s continued $300 million-plus deficits, or the $7 billion national debt, let alone specific plans for how it will tackle a looming fiscal crisis that threatens to sink the Bahamian economy and society.

“It’s mind-boggling that they don’t address the two major concerns of the country,” Mr D’Aguilar told Tribune Business of the PLP’s election campaign manifesto. “They don’t want Fiscal Responsibility.

“If they are constrained by fiscal responsibility, and have to maintain caps on spending due to a Fiscal Responsibility Act, they can’t pad contracts.

“This is why the PLP is such a dangerous option. Here we are being told by S&P, Moody’s and the IMF time and time again that we need to get our fiscal house in order, we have to stop spending this VAT money, and deal with the debt.”

Both Opposition parties, the FNM and the Democratic National Alliance (DNA), have committed to introducing a Fiscal Responsibility Act as part of a strategy to bring greater accountability and transparency to the Government’s financial management.

The PLP, though, has been silent on the issue ever since the current administration failed to deliver on Prime Minister Perry Christie’s February 2015 pledge to initiate public consultation on whether a Fiscal Responsibility Act was appropriate for the Bahamas.

The matter has come back to the fore after an Inter-American Development Bank (IDB) paper, published last week, warned that the Bahamas and other Caribbean nations need to impose discipline on their governments via so-called ‘fiscal rules’ if growing debt is ever to be controlled.

The IDB paper suggested that spending rules, which adjusted the Government’s expenditure to keep its fiscal ratios in line with a set debt-to-GDP target, would deliver greatest value for the Bahamas.

Mr D’Aguilar, backing the imposition of caps on government spending, said Royal Bank of Canada’s (RBC) chief Caribbean economist, as well as multiple international agencies, were warning that the Government will never control its expenditure if left to its own devices.

He accused the Christie administration of “busting the Budget” in its efforts to secure re-election, adding: “They’re promoting people, hiring people without any thought for the country.”

Tribune Business previously revealed how the Christie administration has increased the civil service by a net 4,500 persons since taking office in 2012, a development that explains where a sizeable chunk of VAT’s net $756 million revenue rise is going on an annual basis.

And, in recent interviews, constituents of Prime Minister Perry Christie and Jerome Fitzgerald, minister of education, science and technology, have both revealed how the two men have secured jobs for themselves and their family members within the public sector.

Mr D’Aguilar accused the PLP of ‘scare-mongering’ by suggesting an FNM government would dismiss such hires, but described the Christie administration’s focus on growing the public sector rather than the economy as “a formula for disaster”.

“The dumb approach is to increase the tax burden on your productive sectors to fund more public sector employment,” he told Tribune Business.

“That’s a disaster. The civil service will become overwhelming for the taxpayer. Unfortunately, it’s a dangerous course to be on. What the PLP fails to tell the people is that the Government can’t give everyone a job.

“Instead of using ingenuity and creativity to incentivise the private sector to grow jobs, they’re taking the easy way out of giving people jobs in the public sector. You can’t do that forever,” Mr D’Aguilar added.

“Because they’ve failed to grow the private sector and the economy, they’re providing jobs in the public sector. While that works for a while, you can’t do it forever. You can’t grow Government and not grow the economy. That’s a formula for disaster. If you grow the economy, only then will you grow public sector jobs.”

The PLP’s ‘action plan’ includes some notable omissions, with no mention anywhere of Value-Added Tax (VAT) or the legalisation of web shop gaming - two issues that some sceptics will likely rank as the Christie administration’s ‘greatest achievements’.

The party also appears to be promising a further expansion in the size of government through the creation of a Ministry of Communication & Information and Ministry of Culture and Tourism.

When it comes to accountability and transparency, the PLP is pledging that every government ministry will issue Annual Business Plans, which are to include performance targets and timelines about what they intend to accomplish.

“These Business Plans will support better accountability for all parts of government on an annual basis and be supplemented by annual Business Reports from each Ministry,” the party’s ‘action plan’ said.

“These will clearly indicate progress against the previous year’s Business Plans to further enhance the accountability of Ministries.”

The PLP also promised to implement the Freedom of Information Act, and improve efficiency and execution in government through a variety of measures.