Central Bank of the Bahamas.
By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
An “horrendous” $234 million was added to the Government’s fiscal deficit during the May 10 general election quarter, Central Bank data released yesterday reveals.
The regulator’s May economic developments report shows the former Christie administration actually contained the ‘red ink’ during the first three months of 2017, even posting a “small surplus” for its Budgetary operations.
However, the Minnis administration’s estimate of a $500 million deficit for the full 2016-2017 fiscal year suggests this achievement was squandered by excessive government spending and contracts in the run-up to the general election.
Given that the Central Bank pegged the nine-month deficit at $265.9 million, the new administration’s full-year estimates - given by K P Turnquest, minister of finance, and in its Budget booklets - suggest that the Government spent $234 million more than it took in during the three months to end-June 2017.
Mr Turnquest did not respond to Tribune Business calls and messages seeking comment yesterday, but the figures provide an insight into the extent of the alleged hiring and contract signing frenzy that took place in the former Christie administration’s final few months.
“With the Government recording a small surplus on its budgetary operations during the third quarter of the 2016-2107 fiscal year, the cumulative fiscal deficit rose by $5 million over the nine-month period to a preliminary $265.9 million,” the Central Bank said.
“In terms of the components, total expenditure grew by $65.3 million (3.9 per cent) to $1.724 billion, outpacing the $60.3 million (4.3 per cent) advance in total revenue to $1.458 billion.”
Given that the half-year deficit was pegged at $275 million, this suggests the Christie administration ran a near-$10 million ‘surplus’ for the three months to end-March 2017, seemingly making good on efforts to arrest the damage caused by Hurricane Matthew.
The Central Bank’s April monthly report placed the end-February, or eight-month deficit, at $302.9 million - indicating that, possibly as a result of Business License fee collection timing and a crackdown on ‘tax dodgers’ - the Government had managed to generate a $27 million surplus for March.
These efforts make the seeming $234 million June quarter ‘deficit’ all the more remarkable, based on the new government’s $500 million deficit projection for the full-year - unless the latter turns out to be incorrect. The Minnis administration was in office for just three weeks of that period, when all government spending would have been set or pre-programmed.
Rick Lowe, a ‘fiscal hawk’ with the Nassau Institute think-tank, told Tribune Business of the numbers: “That’s horrendous, if that’s the case. There’s just no buckling down at all.
“The Central Bank numbers, I’m sure, are accurate. It’s not good. It just adds to the burden.”
The Central Bank yesterday also adjusted its position on the Bahamas’ fiscal outlook, warning that prospects for reducing the deficit had become bleaker due to increased civil service salary costs.
“Medium-term fiscal consolidation prospects remain dependent on the success of measures to enhance revenue administration and curb expenditure growth,” it said.
“However, the near-term prospects of a deficit reduction have lessened, owing to increased expenditure commitments from salaries and ongoing recovery costs from Hurricane Matthew.”
The $234 million ‘deficit’ for the final quarter of the Government’s fiscal year will only add to the explanations that will likely be sought by the rating agencies, Moody’s and Standard & Poor’s, when they visit Nassau in the next few weeks.
They, together with the International Monetary Fund (IMF), will likely seek further understanding of the Government’s financial position, having already been unnerved by the $722 million borrowing and $500 million deficit announcements.
Breaking down the Government’s fiscal position at end-March 2017, the Central Bank said: “The expansion in expenditure was driven by a $71.6 million (51.7 per cent) rise in capital outlays to $210 million, due mainly to a $55.5 million (51.2 per cent) increase in hurricane rebuilding-related infrastructure spending, and a $16.1 million (53.8% per cent) expansion in asset acquisitions.
“In addition, current expenditure expanded by $30.8 million (2.1 per cent), with a $37.4 million (5 per cent) rise in consumption outlays, and respective increases in personal emoluments and purchases of goods and services of $21.7 million (4.4 per cent) and $15.7 million (6.4 per cent).
“In a slight offset, transfer payments contracted by $6.6 million (0.9 per cent), as subsidies declined by $28.1 million (9.9 per cent) on account of decreases in outlays to the Ministry of Tourism, while transfers to households fell by $8.7 million (7.7 per cent). In contrast, interest payments - predominantly on external obligations - rose by $7.3 million (3.8 per cent).”
As for revenues, the Central Bank added: “The broad-based gains in revenue over the first three quarters of the fiscal period were led by a $53.7 million (4.3 per cent) rise in tax receipts to $1.308 billion, as taxes on international trade advanced by $22.3 million (5.9 per cent) due to higher import and excise tax collections.
“Similarly, selective taxes on services more than doubled to $21.9 million, due to a two-fold increase in gaming tax receipts to $20.8 million. Further, business and professional fees firmed by $9.7 million (9.5 per cent), buttressed by a $9.2 million (13.2 per cent) gain in general business fees. ‘Other’ non-trade tax inflows grew by $11.9 million (4 per cent), as measures to improve revenue administration contributed to a $16.3 million (18.2 per cent) expansion in property tax collections.
“In contrast, with the hurricane-related disruption still evident, Value-Added tax (VAT) receipts narrowed by $9.5 million (2 per cent) to $465.2 million. In addition, the $4.9 million (13.6 per cent) uptick in income—mainly from ‘other’ miscellaneous sources—as well as the $2.1 million (2 per cent) rise in fines, forfeits and administrative fees supported the growth in non-tax revenue.”
Comments
realfreethinker 7 years, 4 months ago
How does one go from a $10mil surplus at end of third quarter to $234mil deficit 3 months later. This is nuts. Perry those really did a number on us. We are really up the creek.
ThisIsOurs 7 years, 4 months ago
Don't think they're saying everything was good up to 3rd quarter since the report says "the half-year deficit was pegged at $275 million,", Seems they did "ok" in the 3rd quarter so the deficit went down by 5 million , but I could be wrong.
Also you'd really have to know something about their cash flow pattern, for example have you ever built a house? At certain intervals you spend more of the money, depends on the operation.
banker 7 years, 4 months ago
This deserves jail time.
SP 7 years, 4 months ago
HOLY CRAP! These guys make piracy look like child's play!
While gross misfeasance is uncovered all over the place almost on daily bases, Perry Christie claims he did the right thing and continues sticking to his story.
Now we know why Philip Davis and Gargoyle Roberts are so adamant about their calls for and an end to the so-called "witch hunt". They know exactly what they did in fleecing the country and definitely doesn't want the electorate to learn just how corrupt they are!
There is no way back for the PLP brand. The electorate at large will never trust "PLP" ever again.
jackbnimble 7 years, 4 months ago
And Carla Bethel says he can find nothing legally wrong with this?!!! He needs to have his head examined! Then you gat the idiotic PLP's on this blog and social media actually defending the over hiring and crying victimization because the Minnis administration has a hiring freeze and is not renewing short-term contracts? Can't you people read? What planet are you living on?! Our prospects of reducing the deficit are LESSENED because of the extra financial burden from all the last-minutes hiring.
Somebody needs to go to jail!
TalRussell 7 years, 4 months ago
Comrades! This latest governing administration the 4th Red Shirts Regime's early warning radar to prosecute those politicians and their politically connected who are being accused of personal wealth enhancement from the state's funds - has turned out to be about as effective as Freeport Airport's non-existent Radar was in guiding Dr. Myles and his passengers to a safe landing.
proudloudandfnm 7 years, 4 months ago
Honestly if PLPs are not prosecuted this country will never recover. It is imperative that these scumbags be prosecuted. Especialluly that sad little man that was PM. Him and Halkitis must be prosecuted....
EasternGate 7 years, 4 months ago
PLP one big shitty party!
truetruebahamian 7 years, 4 months ago
As I first said several years ago PLP = Plunder Loot and Pillage.
TalRussell 7 years, 4 months ago
Comrades! As a people we want to improve upon how our government operates... but we must not lose sight of the fact that the early governing years of Pindling - were unquestionably our nation's very finest governing years.
realfreethinker 7 years, 4 months ago
But unfortunately his last years has gotten us to where we are
B_I_D___ 7 years, 4 months ago
Bingo!
OMG 7 years, 4 months ago
And then came the drug trade, Normans Cay, George Smith and the sale of the Bahamas.
sheeprunner12 7 years, 4 months ago
We should expunge the names of Pindling and Christie from our country .... they were the equivalent of Blackbeard and Jack Rackham
DDK 7 years, 4 months ago
Says you!
TheMadHatter 7 years, 4 months ago
FNM - The answer for you here is VERY simple. Why not show the people HOW MUCH money this really is and at the same time let the people benefit. You say it's the people's time?'
Let's guess there are 350,000 people in the Bahamas with NIB numbers who are Bahamian citizens and/or are paying NIB contributions on their salaries.
$234million divided by 350 thousand people is about $670 each.
Give that much credit to every single such NIB card holder, and allow them to collect from any NIB office in person showing ID. They must collect it all at once in order to reduce repeat persons making the lines worse than they would be in any case.
Then people will realize how they "could" have benefited if the PLP had "wasted" that money on them instead.
The total amount is not a lot of money in the grand scheme of things, and it will help boost the economy as well - probably paying for itself (almost) over time as the economic engine gets a kick start.
Of course, I don't expect you to follow this advice because I am not a Canadian consultant - but I thought I would mention it anyway.
DEDDIE 7 years, 4 months ago
THAT IS WHERE THE VAT MONEY WENT!
SP 7 years, 4 months ago
Meanwhile the emptiest barrel of them all, MP Picewell Forbes was on Hard Copy yesterday praising the PLP and Hakitas for their "stellar" services in managing the countries economy..Lol!
This dumb idiot we all know never had an independent thought since setting foot in the HOA was obviously well prepped by Brave and Fred to parrot certain responses made a damn fool of himself trying to convince the electorate that Pillage Loot Plunder is a powerhouse, ready and able to regain power and "work on behalf of the Bahamian people".....Lol....Lol....Lol.
Hey Forbes, please explain to us how you guys gonna regain power from jail cells, cause that's more than likely where the majority of you will end up!
sheeprunner12 7 years, 4 months ago
Who is going to put them in jail?????????????????
birdiestrachan 7 years, 4 months ago
It is disingenuous to use the words "The PLP blew" there are some who expects or are dying to see certain people go to Jail. They will be disappointed some may not appreciate how the money was spent. but it is not necessarily criminal.
ThisIsOurs 7 years, 4 months ago
No it's not, 200 million in a quarter is ridiculous. That said, I don't think all this finger pointing will get us anywhere, they can continue if they like but I'd like to see much less emphasis on it and more on where we'll be in five years and the steps we're going to take today to get there
sheeprunner12 7 years, 4 months ago
Sooooooooo, are we going to condone this fiscal wastage forever????? ....... Ever since 2002, there has been these large deficits requiring incoming governments to borrow excessive amounts to clean up outstanding bills ....... This Minnis government must put in place mechanisms and a culture of fiscal responsibility and accountability so that this practice is minimal or eliminated altogether ........ It is unethical and immoral to fiscally handcuff an incoming government ........ Watsayu????
ThisIsOurs 7 years, 4 months ago
No one is condoning anything, they're spending 98% of their time pointing fingers and then getting schooled by Wayne Munroe and Fred Mitchell. I'd like to see them spend 80% of their time on strategy and 20% of finger pointing since they must.
Seaman 7 years, 4 months ago
I say give Minnis them one year to get things sorted out ....... then if no case is before the court dock...... let's vote them out as well....... I say that as a huge FNM supporter. They were voted in to give us justice and justice is what we want.
ThisIsOurs 7 years, 4 months ago
One year is too long. I find myself wondering if I'm in an alternate universe, but I knew something was off the first few days. The awkward statements from multiple ministers showed me they had absolutely no consolidated strategy for how they would govern. DAguilar was classic when they asked him about tourism, "oh I don't know what I'm going to do, guess I'll go in and talk to the experts". It actually made some sense but the way he said it, it "appeared" as if they hadn't had a single meeting about what each minister should do when they got to their respective ministries.
Baha10 7 years, 4 months ago
Well said Seaman!
OldFort2012 7 years, 4 months ago
OK, jailing Christie might be too hard. It needs evidence. So, start with those lower down. Bring them all in for questioning. Every single one. And offer them a deal: squeal on your superior and your sentence will be cut in half. You will get to Christie and all ministers in no time. Then jail them all for 50 years, seize all their property and sell it. Seize all property belonging to close and distant family. Strip them of citizenship. Let them wander the Earth looking for some other fool prepared to give them shelter. Maduro might.
John 7 years, 4 months ago
Anyone in business can feel the difference in the economy. it is like you just fell of a cliff and are now in a state of unconsciousness. Can't move, can barely understand what's going on around you. Just looking around for a friendly face in the (economic) crowd. Bills piling up and no income coming in. But hey Minnis and FNM, you are in the driver's seat now. better make something happen fast because the people are hurting and they put their trust in you. Stopping the t'iefin and letting the people know about it is good, very well done, but now we needs to get this economy moving.
B_I_D___ 7 years, 4 months ago
We need election reform...no party should be able to rape the public treasury in the lead up to an election...all expenses should remain the same with the exception of those directly involved with staging the venues and coordinating the polls for the physical election...
JohnDoe 7 years, 4 months ago
Excellent point! But it is not just electoral reform that is need; the fact of the matter is that our current form of the Westminster system incentivizes the Political Party in power to use the Public Treasury to finance their political campaigns every five years. The PLP has become particularly adroit at this but make no mistake the FNM is equally as guilty. The real losers in all of this are of course the Bahamian people.
Our current system results in successive governments pursuing or telescoping their fiscal economic policies to the short to medium term because they cannot resist the temptation to use fiscal policy to further their own self-interest during the period leading up to an election. This system and the behavior of our politicians create significant headwinds for our economy. When the obituary of our economy is written, our inability to formulate and execute coherent and sustainable long term economic policies will be a primary reason for its demise.
Unfortunately, we are often our own worst enemy. In addition to containing the mis-direction of government funds and reducing future government deficits, to truly get us out of this hole we need bold leaders with knowledge, vision and the courage to say to the Bahamian people we have been living above our means and we must now cut out the excesses. At the same time, we must expand the aggregate supply and productive capacity of our economy with a focus on GDP growth without an over-reliance on FDI and creating domestic employment opportunities that concentrate on expanding exports and reducing the reliance on imports.
I believe the PM's heart is in the right place but so was the former PM's heart. The real challenge will be whether or not he has the courage to say to the Bahamian people and to his Cabinet that we must all now be prepared to make sacrifices for the survival of the Bahamas as we know it today and hold his Cabinet accountable. In that regard, the former PM failed miserably.
Seaman 7 years, 4 months ago
You see parties change but servants remain.......I am told that the crooked PLP Administrator is still in North Abaco....... pushing her PLP polices.... Still informing her PLP buddies who were kicked out in the Local Government Elections what's going on in the inside. Shit.... I'm told she even invited them to a meeting even after they were vote out of office. She has to be ....well let's say..run the hell out of town. This is the people's time.
Baha10 7 years, 4 months ago
John is on point!
licks2 7 years, 4 months ago
The big boom is coming. . .this one ger be huge!! Our PM told the region leaders that he will "do some drastic things". . .he warned them of what is coming. . .so they don't get involved and listen to Fred Mitchell and PGC et al when the hammer comes down on them!! Take a look at the Mussick case in TCI. . .all that crap he did some members of CARICOM still said that the British were persecuting him unfairly. . .THEY COMING BACK TO SET FIRE TO THE WEEDS AND WATCH THEM "RATS" SCATTER ALL OVER THE PLACE!!
killemwitdakno 7 years, 4 months ago
This number jumble is written so poorly, what is the point of reporting?
killemwitdakno 7 years, 4 months ago
They didn't blow it , they blew threw it, and the only thing horrendous was waiting to do evertytgjng near election and so testing had contractors because of rushing like the kids pool on the side the highway which might be dangerous.
Ok , maybe that's blowing it.
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