The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The deputy prime minister yesterday defended the government as “very responsive” to the poor’s needs, as it was focused on “providing a hand up” rather than “giving away money”.

KP Turnquest, hitting out at “misleading” opposition claims that it is too obsessed with austerity measures and hitting its fiscal targets at the expense of assisting Bahamians in distress, said social security spending had increased during the 2018-2019 fiscal year.

“That is very misleading,” he told Tribune Business in response to recent opposition attacks. “If you look at the expenditure, social services expenditure is actually up. There’s no cutting back in that regard.

“Second, the investment in the small business area and general support for SMEs, sports groups and the like; there’s no cutting back. That’s misleading that we’re not responsive to people’s particular needs. We are very responsive in terms of the assistance we give.

“We’re not the government that gives away money. We provide assistance and a hand up for those in need, and provide a safety net for those that find themselves in a disadvantageous position.”

The government’s nine-month fiscal “snapshot” and budget report, released yesterday, backed Mr Turnquest’s assertion that social security spending had increased year-over-year for the 2018-2019 fiscal year to end-March. It was shown to have risen by $4.5m from $27.8m to $32.3m, an increase of 16.2 percent.

“Social Assistance Benefits, which could be in cash or in kind (eg medical services) totalled $32.3m, a gain of $4.5m (16.3 percent ) from last year, and approximated 65.3 percent of the budget,” the report said.

“Continuing the observation in the first half, this outcome was primarily attributed to an increase in payments under the National Drug Plan Programme - from $6.4m to $12m.

“Transfers to households, earmarked to provide relief from the financial burden of various risks and needs, were $0.9m above last year’s spend at $27.7m. Approximately $17.4m of this amount was allocated for scholarships, an increase of $1.9m from the year earlier period.”

Mr Turnquest, meanwhile, pledged there would be “no deliberate holding back” on priority items amid The Bahamas’ many infrastructure needs despite the reduction in capital expenditure during 2018-2019.

“We do note that there was an underspend in the capital budget this year,” he told Tribune Business. “That’s as a result of a number of matters, primarily programming and timing issues.

“We are certainly mindful of the infrastructure needs of the country, and we are prioritising what needs to be done within the fiscal parameters we have. We have every intention that those items identified as priorities are dealt with. There will be no holding back on priority infrastructure needs for sure.”

Capital spending for the first nine months of the 2018-2019 fiscal year was down by 31 percent or $56.8m at $126.7m compared to the prior year. The Government’s report attributed this to “the expensing of $70.4m of the Government’s $88m year-to-date payment towards settlement of the $100m Bahamas Resolve promissory note to Bank of The Bahamas”. That took place in 2017-2018.

Elsewhere, the Government said it had settled some $112.7m, or 65.4 percent, of the $172.3m in unfunded arrears payments targeted for 2018-2019 by end-March. Mr Turnquest said: “In addition to financing the ordinary cost of government, we have budgeted to pay off $172m in old bills in this fiscal year, so we have limited room to manoevere.

“Through the end of March, we’ve settled over $110m in these old bills. To be able to pay off such a backlog of arrears, while still reducing the deficit, is no easy feat; it depends on us being disciplined.”

Recurrent spending, which goes on the Government’s fixed costs, such as salaries and wages, rose year-over-year by $143.3m or 9.3 percent to $1.692bn for the first nine months of 2018-2019. This represented 65.3 percent of the budget target, and was boosted by the arrears payments.

“Compensation of employees stood at $518.9m for the period, falling some $27.6m (5 percent) below last year and equivalent to 65.4 percent of the budgeted provision,” the Government report said.

“At 88 percent of the total, wages and salaries were lower than the year-earlier spend by $23.8m (5 percent) owing to the completion of employment contracts. Allowances were reduced by $3m (7.1 percent) to $38.9m, partly due to a reduction in payments for overtime, responsibility and other allowances.”

Total government spending was up by $86.5m or 5 percent at $1.818bn for the period, representing 63 percent of the budget target.