The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The FNM’s finance spokesman says Central Bank data proves the $314.4 million first half deficit cannot be blamed solely on Hurricane Matthew, as he slammed Prime Minister Perry Christie’s “reckless spending”.

K Peter Turnquest, who is also the party’s deputy leader, said that comparing the numbers from different central Bank quarterly statistical reports showed the Government needed a “10 per cent improvement” above normal second half trends if it was to hit its $2.2 billion revenue target for 2016-2017.

The numbers, also reviewed by Tribune Business, cast doubt on assertions by Michael Halkitis, minister of state for finance, that the increased economic activity and revenue inflows seen during the Budget year’s second half will keep the deficit in check.

The Minister, for two consecutive years, has suggested that increased revenue inflows associated with the peak winter tourism season, the March payment of Business License fees, commercial vehicle licensing month and the collection of the majority of real property taxes, provide a deficit-narrowing boost.

However, the Central Bank’s data shows that the Government ran GFS deficits of $113.038 million and $49.441 million, respectively, during the third and fourth quarters of its 2015-2016 Budget year.

That period is the first six months of the calendar, which means that a repeat performance would add $162.479 million to the deficit in the 2016-2017 second half - taking it to almost $477 million for the full-year, and a sum close to where the Christie administration started in 2016-2017.

Mr Turnquest, meanwhile, said the Bahamas has been downgraded four times in five years, and is now at non-investor grade status (Junk) with S&P, as he slammed the Government’s fiscal policies.

Mr Turnquest said that the Central Bank reports showed the Government had spent around half its full-year projected expenditure in the six months to end-December 2016, while collecting only 39.3 per cent of projected revenue. The latter figure is not unusual, given that the bulk of revenues are collected in the second half.

“But, disaster spending is far from what happened in the second quarter of 2016-2017,” Mr Turnquest said, arguing that while recurrent spending was in line with previous quarters, the Government spend less on public works in Matthew’s aftermath.

He pointed out that the $34.399 million spend was less then the prior quarter’s $39.809 million, with the bulk of $95.859 million in capital spending during the three months to end-December 2016 going “to fixing up government buildings as usual”.

Noting the increased transfer payments and subsidies to loss-making state-owned corporations, Mr Turnquest said: “We have repeatedly demanded that Christie privatise state-owned assets.

“We note that since 2011-2012, expenditure in the form of transfer payments and subsidies, $398.7 million, had increased by $375.3 million to $774.1 million at the end of 2015-2016.

“The FNM has implored Christie since 2012 to continue the policy of selling government assets to Bahamians and private enterprises to mitigate the strain on government resources. With this said, we call on the Government to make public the details of the bids in BEC’s request for proposals, and of its 2 per cent buy back of BTC shares.”

Mr Turnquest also expressed “shock” at the $14 million of debt in Poinciana SPV Ltd, the special purpose vehicle (SPV) created by the Government to acquire UBS House on East Bay Street as the new home for the non-Central Bank financial services regulators.

He also called for more information from the Government and the Central Bank of the Bahamas over the latter’s increased Treasury Bill holdings, which jumped by $97.6 million in 2016, and urged the Government not to increase spending in a bid to win the upcoming general election.