The Tribune

By NICO SCAVELLA

Tribune Staff Reporter

nscavella@tribunemedia.net

FORMER Tall Pines MP Leslie Miller on Friday cautioned the Minnis administration to be “very careful” in rolling out its new austerity measures, warning that the Free National Movement government “could cause a recession if you go too far”.

Mr Miller, in an interview with The Tribune, said while he agrees with “some of the things” the Minnis administration is doing to curtail government finances, its plans could ultimately backfire, warning: “Be careful how you tread down these roads.”

Mr Miller’s statements were in reference to Prime Minister Dr Hubert Minnis’ inaugural address as the nation’s leader last week, in which he announced there would be a ten per cent cut in spending in all government ministries and no new public sector hiring.

Deputy Prime Minister K Peter Turnquest subsequently took a step further, telling reporters on Thursday that while it isn’t seeking to inflict discomfort on government workers, the government is undertaking measures to “rationalise their service” and “ensure their services are needed.”

In the event workers have to be disengaged, Mr Turnquest said the Minnis administration will do so with “full analysis of what the consequences are” for both sides and “to the extent that we can help them transition into the private sector.”

However, the East Grand Bahama MP stressed the need to “clear the system” so that “we have opportunity at the bottom for new entrants”.

When contacted by The Tribune on Friday, Mr Miller cautioned the government of the dangers of implementing its austerity measures, referring to comments made by former Finance Minister James Smith to Tribune Business and published in Friday’s Tribune.

Mr Smith, also an ex-Central Bank governor, told Tribune Business the Minnis administration had “very little wiggle room” to achieve such cuts because so much of the government’s annual budget was consumed by fixed costs.

This included civil servant salaries, debt servicing and repayments, and building rentals and other contracts that were already locked in, which were “way up there” in terms of the proportion of the budget they account for.

Mr Smith further warned that civil service ‘buy in’ at all levels--from top to bottom--was vital if the government’s fiscal consolidation is to succeed, as he likened the public sector to “a big aircraft carrier that is hard to turn around.”

“I listen to experts like James Smith, who is like a brother to me, fellas who taught me a lot of what I know,” Mr Miller told The Tribune. “Listen to what he had to say in your papers (Friday).

“They (the government) need to be very, very careful. If you already laid so many Bahamians off that (the PLP) had on the job programme, and now you’re not going to hire anybody for the next 12 months, where are those people who you have displaced going to get an income from?

“How are they going to feed their families? How are they going to send their kids back to school come July and August? Where are you going to find the jobs? If you’re going on an austere programme, that could cause a recession if you go too far.

“…But the ball is in their court,” Mr Miller added. “I just think they got to be careful with this austere programme. I agree with some of the things that they’re doing and they’re making some concerted efforts.

“But if people out there hurting, and they don’t have a job, the next thing they gone do is turn more towards crime, especially the young men. So be careful how you tread down these roads.”

On Thursday, Mr Turnquest said while the Minnis administration will not participate in “any action that is going to further cause the Bahamian people to suffer,” it will aggressively seek to “bring discipline to government finances and rationalisation of the programmes we are engaged in”.

Mr Turnquest further explained that the government expects to achieve even more savings that the 10 per cent reduction, primarily by identifying duplicate government programmes, cutting overpriced public contracts and eliminating wastage.

Mr Turnquest, also the minister of finance, told reporters each ministry will be mandated to present the details of its spending reductions to the Minnis administration before the next budget communication in June.