Deputy Prime Minister Peter Turnquest. Photo: Terrel W. Carey/Tribune Staff
By KHRISNA RUSSELL
Deputy Chief Reporter
krussell@tribunemedia.net
AS the former Christie administration committed an “immoral” fiscal travesty while in office between 2012 to 2017, the government’s direct debt mushroomed from $3.9bn to over $6.5bn, Finance Minister K Peter Turnquest revealed in Parliament yesterday.
This increase of over $2.6bn represents a rise on average of $529m each year, the deputy prime minister said.
Despite $1.5bn in new revenue generation from introducing value added tax in 2015-2016, the debt still increased, Mr Turnquest said, suggesting this exorbitant spending ate up the new tax income brought on by binge spending on the nation’s proverbial credit card.
In the first full fiscal year of VAT, recurrent revenue went up by $261m from the previous year as would have been expected, but rather than use the new income to pay down on the debt, he said the former government ramped up spending on programmes and services of so-called discretionary spending by $302m.
As these circumstances remain challenging to the government, the deputy prime minister said the Minnis administration is still picking up the pieces nearly a year into assuming office.
While the government discovered $150m in commitments that must be paid including $63m for NHI and the prescription drug plan along with $7.5m to Arawak Homes, Mr Turnquest said the Minnis administration also paid out $54m in the first half of 2017-2018 to satisfy the previous bills.
Among these was $13.2m in respect to 573 prior-year transactions across ministries and departments; $13m owed to the Bahamas Telecommunications Corporation; $5.6m for unpaid bills from the Department of Customs reform and modernisation project and $3.8m for the Fox Hill Community Centre among other exorbitant fees.
Nonetheless, he said 2.5 percent growth is expected this year and 2.2 percent is projected in the following year.
According to Mr Turnquest, the former Progressive Liberal Party government’s handling of the state was “shoddy” at best.
“When I mentioned that we faced a bare cupboard last May, I was not speaking in jest, for there is no humour in the fiscal morass that we inherited – and the one that so severely constrains the room in which we have had to manoeuvre.
“Indeed our government walked into a most challenging environment in respect of the management and administration of public sector finances,” the East Grand Bahama MP said.
Mr Turnquest said the previous government also engaged in “shameless and extravagant” pre-election spending.
“As we quickly discovered upon coming to office, that spree left us with virtually untold millions in unpaid overhang commitments with which we must now deal. Indeed their overhang is of an order of magnitude that may well be unprecedented.
“To date we have been able to ascertain just over $200m in such commitments. Unfortunately, it appears that this is not the end of the story as new unpaid commitments continue to surface. Such irresponsible behaviour by a government solemnly and faithfully elected by Bahamian citizens is simple unconscionable.”
Other questionable matters he said is the claim that the former government committed $18m to support the printing of the Bahamas Handbook and in-room tourist guides, but only paid $500,000 towards the bill.
“The former administration did not put this work out to contract nor send it to Cabinet for approval. It is now left up to the government to sort this matter out and investigate the $17.5m that is supposedly owed.”
Any number of consultants were also brought on some not having Cabinet approval nor working through the required procurement process, with ill-defined roles among other things, Mr Turnquest said.
“A Public Treasury where the senior staff could get no assistance obtaining critical equipment, or get approval for much needed staff – despite millions of dollars being frittered away. All because we suspect the treasurer was prepared to tell the former administration to follow the rules.
“A revenue enhancement project initiative and team costing at the time more than $1m a month to run including expensive foreign consultancies without any evidence of Cabinet approval.
“Despite all of the hoopla around the Bahamas Junkanoo Carnival festival, the Ministry of Finance had engaged an accounting company which had not been through the resources of the carnival festival and which has been holding on to bills from last year,” Mr Turnquest said.
Moving forward Mr Turnquest said the government intends to transform state-owned enterprises, introduce new public procurement legislation, improve the ease of doing business and revitalise the Grand Bahama economy in order to achieve long-term economic growth.
Comments
bogart 6 years, 8 months ago
The people are joining lines for food, soup lines, opportunities needed to work......these amounts wasted are mind boggling.....yet the supporters, die hards, friends, families, lovers. Cronies.....will be denying, obfrusapcatin, twisting tings, an muddoes even changing da subject to mislead.....more investigations needed and da guilty cronies too need to to go to jail....one Bahamian singer done say liar is a tief .....mind boggling .!!!
TalRussell 6 years, 8 months ago
Not so fast Ma Comrade KP, owed for what?
Don't you think the $13 million owed to BEC, along with the $7.5 million owed to Arawak Homes - does need some public details explaining?
Smart242 6 years, 8 months ago
So are we protecting the people of The Bahamas from this happening again? What laws and bills will be enacted to prevent this from happening? Will the Freedom of Information Act help? Will it help with the Call for Proposals/ bidding especially? We will not live forever, our children are coming next. What will be done to protect others continuing the horrible trend of robbing our future? Let's not just talk about it!
TheMadHatter 6 years, 8 months ago
All kinds of big million dollars mention for debts and commitments - but no line itemized list. That's what web pages are for. Is there any info on min of fin website? Of course not. Anybody can stand up call off any kind of nonsense and say "Hey look! It adds up to 281 million."
What's the secret?
John 6 years, 8 months ago
The fact is VAT was supposed to replace customs duties, stamp taxes and other taxes. NOT TO BE Collected in addition to them. So this why the economy has such a difficult time recovering. There’s too much of a drag from the tax burden. And to make it worse too much tax money was being wasted and frittered away, at least by the former government. So this led to additional borrowing which drew even additional money out of the economy. So instead of government seeing a growing economy with increasing government revenue, they are faced with a stagnant one. They are cash strapped and has resorted to additional borrowing And considering increases in taxes which will cause the economy to shut down.
DDK 6 years, 8 months ago
Too right! For shame!
John 6 years, 8 months ago
With the jobs report out today, 90% of companies are saying they cannot find workers to fill job openings. And this is just the start up of many companies agreeing to bring their operations and billions of dollars back to the US. But wage increases remain flat and consumer confidence is still, maybe because of who is president. In the event of uncertainty, consumers choose to hold on to their money.
SP 6 years, 8 months ago
Pillage Loot Plunder minister of finance and his "team" redefined malfeasance and misfeasance to previously unimaginable heights!
Friends, family, and lovers were well taken cared of at the expense of the public Treasury. The "witch hunt" has revealed innumerable nefarious googlish dealing and this just the tip of iceberg.
PM Sheriff Minnis is duty bound to have the whole lot of these people charged with racketeering, fraud, receiving and any number of other corrupt practices.
Bradley Roberts knows everybody's business so what say you big bad brad?
BahamasForBahamians 6 years, 8 months ago
PM Minnis is even worst than any of these guys they hope to refer to, to distact us from the mismanagement and ability to govern in almost 1 year.
There has been NO relief brought to The Bahamian - through investigation, prosecution or though successful governing by this administration!
SP 6 years, 8 months ago
PM Minnis is unequivocally providing evidence Pillage Loot Plunder misappropriated $100's of millions of the peoples' money to friends, family, and lovers, and you want us to believe this is bad governance, mismanagement, of no relief to Bahamians and just a distraction??
Pillage Loot Plunder learned nothing May 10, 2017. You guys are totally stuck on stupid with your arrogant, self-righteous opinion that Bahamians are ignorant fools. We will see who the fools are soon enough!
DDK 6 years, 8 months ago
Outrageous! And they all go to Church and do not know the eighth Commandment. They seem to have reworded it to "THOU SHALT STEAL AS MUCH AS YOU CAN", and this they teach their children...........
Well_mudda_take_sic 6 years, 8 months ago
I can't count the number of times I forewarned the proponents of VAT (John Rolle, Pinder, Gowan Bowe and others like them) that you should never feed more tax dollars to a spendthrift corrupt government, no matter what the circumstances or dire consequences. The same holds true for our current spendthrift government led by the dimwitted Doc. Minnis and Turnquest have done nothing of any substance to curb the out-of-control growth of government and willie-nilly wasteful and, yes, corrupt spending.
Sickened 6 years, 8 months ago
And it seems to be happening again under this government. Where did last year's VAT money go? Why are we still borrowing $100 million every month? This lot is just as bad as the last. STOP BLAMING THE LAST GOVERNMENT AND GIVE US DETAILS ON WHERE THIS REVENUE IS GOING!!!
OMG 6 years, 8 months ago
Some writers seem to think that once the FNM got into power they would have a magic wand to erase all known and unknown debt and start from scratch. I would like to see names of all the company heads, politicians and persons who signed of on all these devious and crooked schemes. How about central Eleuthera where a huge area of land was excavated by bulldozers for months to level it for a hospital. At least three groundbreaking ceremonies (last one just before the election) which in themselves must have cost thousands of dollars) and now a mountain of curry. Who got paid, how much and who signed off on this hair brained idea? There must be a record somewhere.
TigerB 6 years, 8 months ago
Sickened. seem they still paying off the old debts from your old government... did you read any of the headlines yesterday? They do hip with the money, including buying lunch with the tax payers money, and you and I will pay... continue to defend them
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