By RASHAD ROLLE
Tribune Staff Reporter
rrolle@tribunemedia.net
FORMER Minister of State for Finance Zhivargo Laing defended the fiscal performance of past Free National Movement administrations yesterday, knocking the Minnis administration's narrative that its current fiscal consolidation measures are necessary to address years of fiscal mismanagement in the country.
When rationalising their intended increase of value added tax to 12 percent, government ministers have blamed "successive administrations" for problems the country now faces.
Mr Laing, a member of two FNM administrations, stressed on his Guardian 96.9FM show yesterday that past FNM governments kept deficits low without major tax hikes, except during the 2007 to 2012 period when spending was deliberately increased in response to the 2008 Great Recession.
"I have to say on the face of it my first observation about the budget context and framing is that it is not in keeping with the facts," Mr Laing said.
Deputy Prime Minister and Minister of Finance Peter Turnquest has accused "governments before" of presenting "misleading budgets" with "hidden obligations," although Mr Turnquest has never specifically accused previous FNM administrations of this behaviour. Nonetheless, Mr Laing said at no time has a government he was a part of underreported obligations.
From 1993 to 2001, he said, "the debt to GDP ratio never exceeded 42 or so percent, never got close to 50 percent in that period." In the last two fiscal years of that period, he said the government ran a surplus on the recurrent expenditure accounts, a rare feat.
"Our debt to GDP ratio never arose to the level of 50 percent until the Great Recession, the most deteriorated period since the Great Depression," he added.
"In that entire period of GFS deficits of an average of 1.2 percent, the government of The Bahamas had no value added tax, never introduced a new tax. In fact it was the pride of the minister of finance at the time to be able to stand up in the House of Assembly and say 'I'm happy to say that this budget has no new taxes or increases in taxes' and everyone would beat on their desks in Parliament in great jubilation because that was the case.
"In that period of time, all the Family Islands, many were electrified, were provided with water, many schools were built, many upgrades to clinics were done, police officers got salary increases, civil servants got salary increases…in all that period of time those things happened without any new taxes, without any increases in taxes and with substantially low GFS deficits. So I am left to wonder what period in all of that represented fiscal mismanagement.
"I think it is important to have a context that's rooted in the facts of our history and I suggest to those that would put that there was this extensive periods of mismanagement that nothing could be further from the truth."
Comments
TalRussell 6 years, 5 months ago
Ma Comrades, here's Home baked Brownies thought. Red Shirts Centerville MP Reece, should switch jobs talkie show host Zhivargo?
hrysippus 6 years, 5 months ago
I wonder if the honourable gentleman wold like yo comment on the increase in stamp tax from 1.75% to 7% enacted by his government. I hope he is enjoying his pension for life after 8 years as a cabinet minister paid for by those citizens who actually have to work in real jobs.
The_Oracle 6 years, 5 months ago
Many bad deals were cut by those former FNM governments, setting the stage for a good part of our current fiscal demise. I believe many of those deals were good for Cabinet Members however. Electrification or east and west Grand Bahama by Southern electric/Marebuni/Mirant/Emera is one of them. Power bills in Freeport are still paying for that slight of hand.
SP 6 years, 5 months ago
Zhivargo Laing either really believes everybody is ignorant red and gold shirt tribal fools, or he is truly dumb enough to think "there is no difference between 49% and 51%"!
Obviously, since his FNM administration made major infrastructural improvements, salary increases etc, funds had to come from "somewhere" to satisfy the increased expenditure. Without raising taxes, the only solution for the government to cover the new debt is to borrow more and more money, which is exactly the reason the country has a $7B deficit and is in big trouble today!
Former finance ministers Pindling, Ingraham, and Christie knew damn well they were borrowing more than the country could afford. They should all be charged with misfeasance for deliberately running the country into the ditch.
bcitizen 6 years, 5 months ago
I was Hubert that bragged when he was last Prime Minister that the Bahamas and China were the only two countries in the world to not downsize their civil service during the recession that began in 2008. So now here we are.
DWW 6 years, 5 months ago
Laing, pindling, ingraham, all of them, anyone who has ever been elected to serve in office is the reason my 6year old daughter inherited almost $20,000 in debt which she did not ask for. if Laing serious he shoudl give up his ill gotten pension.
licks2 6 years, 5 months ago
Mr Laing just think that we are so stupid. . .H A I equally contributed to the "dumb" way of running a government. . .or should I say run it into the ground!! Hell. . .Mr. Laing was one with hands-on the messy financial dealing of the past that ran us into a ditch!! Barbados is now managed by IMF after they had to bail that country out of bankruptcy. . .after warning them that with the "lower" rate of VAT advised by the international bodies and they paid no attention to that advice. . .just like Mr. Laing them. . .now that nation is in the middle of what they were told they would find themselves if they pay no heed to warning.
screwedbahamian 6 years, 5 months ago
Mr. Laing in essence is saying that we, the Bahamian People are unintelligent and stupid. Perhaps he need to be reminded that the PLP ( the opposition party) won the 2012 elections by a landslide victory of 30 seats to 8 seats for the FNM despite his telling us that "PAPA DOC" oh, "PAPA INGRAHAM" government created PARADISE for The Bahamian People. I guess, we just liked "YELLOW" better the "RED". Being a Member of the 2007-2012 "PAPA WHOEVER" Government and a protégé of the leader would certainly not be proud of taking away the NIB pension of Individuals who had contributed to the pension programme since it inception in 1974.because of the GROSS MISMANAGEMENT AND CORRUPTION OF THE PENSION FUND. Many senior citizens like myself are paying the consequences today in trying to survive. Maybe he will be better off in is senior citizen days because of being member of the previous FNM government.
sheeprunner12 6 years, 5 months ago
If Laing was that smart, Minnis would have put him in his Cabinet. HAI loyalist to his grave.
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