The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

The deputy prime minister yesterday said "economic realities" will dictate how long the Government can keep financing its individual and business COVID-19 assistance programmes.

K Peter Turnquest told reporters outside the Cabinet Office that while the Government's fiscal and economic projections are presently "holding", the decision by many major hotel properties to delay their re-opening will dampen the rebound it had been hoping for.

As a result, he said the period between "late fall and early spring" 2021 is when the Ministry of Finance may have to look at adjusting its revenue, spending and borrowing forecasts depending on the timing - and strength - of the tourism industry's recovery.

"We have always said that we did not expect tourism to really ramp up until the late fall/November timeframe. Unfortunately, it is a fact that the major hotels have already announced they will not be ready in time to meet the (October 15 tourism reopening) date," Mr Turnquest said.

"That does delay some of the recovery that we anticipate will happen. But we do hope that some of the smaller properties, the Airbnb-type properties, would be able to pick up some slack - not obviously to the level of what we would lose by not having the major hotels - but hopefully we would be able to provide some level of activity for the community and people to be able to at least make a couple of dollars."

However, the mandatory 14-day quarantine period imposed on all persons arriving in The Bahamas has effectively shuttered the Airbnb and vacation rental market. Its customers are those tourists who want to go off-property and explore what The Bahamas has to offer - a model that has been halted in its tracks by these restrictions.

And small hotel properties, while better placed to re-open, are often closed in October anyway given that it is traditionally the second-slowest month in the tourism season. The delayed re-opening of Baha Mar and other major resorts also means that the airlift smaller hotels also rely on will be substantially reduced.

Mr Turnquest, meanwhile, acknowledged the possibility that the Government will have to revise its forecasts. “As we go into the late fall and the early Spring, things will start to become more immediate for us in terms of having to look at making any adjustments that may be necessary because then we would expect to start seeing the real impact of this reduced activity," he said.

"So at the moment we are holding; we are still able to meet our commitments. We are still able to provide the same level of assistance we have been able to provide for people to try and help them through this period, but this is a fluid situation and we continue to monitor and make adjustments as necessary."

The Government had been hoping an imminent hotel industry return would enable it to wind-down its social and business assistance initiatives, which are due to expire at September's end. These include programmes such as the 13-week unemployment benefit extension; then Small Business Continuity loan programme; and the tax deferral and credit initiative.

With the tourism industry's rebound set to be slow and protracted, the Government's hoped-for outcome is unlikely to occur. Yet, despite the continued needs of unemployed Bahamians and their families, it has given no indication as to whether these initiatives will be extended.

There has also been silence over whether the temporary furlough, which allows businesses to send staff home without paying them full severance, will be extended beyond end-September. Several sources have suggested this runs until the emergency powers orders end, and the Government plans this week to extend them to end-October.

The Government and National Insurance Board (NIB) have to-date paid out $146.5m to some 43,200 persons, and Mr Turnquest said: “The Government has made it a priority to give as much assistance as we can to the Bahamian people.

"We recognise this is a very difficult period for all of us, and there are persons who are operating on the margins even before this crisis that are finding it even more difficult because the donations and NGOs (non-governmental organisations) that have ordinarily been able to assist don’t have the resources to be able to assist.

"So the Government is stepping in to do the best we can to fill this gap. How long we can hold it really all depends on what happens in terms of the economic realities," he added. "One of the things we are committed to, and the Prime Minister has made this very clear, is that we are going to take care of our people to ensure that as best as possible we are going to help to avoid any Bahamian having to go hungry and having to go shelterless."