Deputy Progressive Liberal Party leader Chester Cooper.
By RASHAD ROLLE
Tribune Staff Reporter
rrolle@tribunemedia.net
EXUMA & Ragged Island MP Chester Cooper bashed the government’s fiscal policies yesterday, saying its latest fiscal report proves the failure of the Minnis administration’s strategies.
His statement came after the Ministry of Finance released a report on the government’s budgetary performance during the first nine months of the fiscal year.
With less than three months left until the end of the fiscal year, the government has obtained $1,689.1 bn of its projected $2,648.7 bn revenue.
“It is astounding to learn that the government is $1 billion behind its projected revenue target with only three months left in the fiscal year,” Mr Cooper said. “It’s inconceivable that this administration budgeted so poorly. That value added tax was raised by 60 percent, yet that the government is on track to fall short of its forecast collection by hundreds of millions of dollars is a failure of epic proportions. It is a failure that with three quarters of the year passed, only 63 percent of revenue has been collected. The minister of finance knows full well that there is no windfall expected in the last few months of the budget year that will get them close to the target amount. It is clear and apparent by their own admission that this administration botched the implementation of VAT and other taxes due to poor modelling and a lack of consultation.”
To date, the government has brought in 56 percent of its projected $1.061 billion VAT revenue. Deputy Prime Minister and Minister and Finance Peter Turnquest said the transition period granted to the hotel and construction industries and consumer adjustment to the VAT increase is responsible for this lag. During this fiscal year the government allowed the construction and hotel industries to levy VAT at the previous 7.5 percent rate on their pre-booked business.
Mr Cooper said: “Whose fault is it that hotels and others were given a grace period to implement VAT because the government failed to understand many of their commitments were made with the understanding that VAT would not be hiked? The FNM is shamefully piling taxes and fines on the backs of the poor and a struggling middle class to simply appease ratings agencies and the IMF. The FNM is disgracefully starving capital expenditure and neglecting infrastructure in order to hit a deficit target that no one in this country asked for…Now the minister of finance suggests that next year, the budget targets are expected to be met. If they were so off with this budget exercise, why on earth would anyone believe they will craft a more realistic budget next year?”
Mr Turnquest criticised Mr Cooper in a response statement yesterday.
He said: “The opposition spokesman for finance, Chester Cooper, is the modern day Rip Van Winkle – having been asleep through the disastrous run of the Christie/Davis team – is now awake and suddenly talkative regarding the fiscal affairs of the country. Because he was asleep between 2012 and 2017, he clearly missed the billions of dollars in deficits occasioned by the Christie/Davis team. He missed the four downgrades. He missed the failure to implement fiscal responsibility legislation. He missed their utter lack of effort in turning the country around.
“But alas, the member for Exuma and Ragged Island is now awake. He gets regular reports on how the people’s money is spent and how it is earned that was never done. He has gotten a fiscal strategy report as part of the now implemented fiscal responsibility legislation. He has witnessed the turn-around of the country’s credit rating profile. He has seen the local and international reports that point to a country that is finally seeing a strengthening economy and a stabilising fiscal situation. He has witnessed a $40 million third quarter surplus. He is watching the current government pay off hundreds of millions of dollars in old bills and still managed to reduce the country’s deficits.”
The new fiscal year begins on July 1.
Comments
Dawes 5 years, 6 months ago
If the figures are correct then this is a large miss by the Government. Peter Turnquests response is laughable. All he is trying to do is deflect. At no point did he answer why such a large difference. Yes allowing hotels and construction to start the VAT later will affect the amount raised, but all this does is show how inept they were at raising the VAT. This should have been planned into all their figures when they did it. but no we all remember, there was the budget then two months of Government changing their plans due to them realising the actual implications of the changes.
John 5 years, 6 months ago
A simple rule of economics is as price increases, consumption decreases. And by extension, the more a government increases taxes, the less consumers will spend. And in some cases if consumers are already spending all of their income and government increases taxes, consumers have less disposable income and so they have no choice but to spend. Some may borrow or use credit cards to attempt to maintain their standard of living but eventually these resources also dry up. The problem is the Turnquest led finance team is/was sending too many shocks to the economy one right after the other. An economy that they met severely depressed and many persons unemployed and deep in debt. And it seemed like anytime they managed to get their head above water, another shockwave of taxes and bills would come and set them awash. And even now as the tourism sector continues to show strong and consistent recovery, little of the benefits have yet reached the local economy. And if the government continues to fritter away the money that is in circulation, without there being any real growth in the economy, then there will be even worse times ahead both for the government and for Bahamians.
Chucky 5 years, 6 months ago
"With less than three months left until the end of the fiscal year, the government has obtained $1,689.1 bn of its projected $2,648.7 bn revenue."
One has to ask what was the total spending budget, how can we be in a current position of surplus given what's been collected, and , are we at a large risk of a major shortfall?
Either they budgeted a whole lot less than they projected in revenue, or we might be headed for a big problem.
Well_mudda_take_sic 5 years, 6 months ago
Minnis and Turnquest must give a full and frank explanation for the alleged colossal shortfall in revenue.
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