The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The deputy prime minister yesterday indicated the Government's COVID-19 support initiatives will likely extend beyond their end-September expiry given the delayed re-openings of many major hotels.

While not wanting to "pre-judge" any Cabinet conclusions, K Peter Turnquest told Tribune Business the Minnis administration will "decide this week" whether to continue programmes such as the Government-funded unemployment benefits extension given that many Bahamians and their families will need such assistance "for a bit longer".

He added, though, that any continued spending will not require the Government to undertake any additional borrowing beyond that already approved by Parliament to cover the 2020-2021 Budget's projected $1.327bn fiscal deficit.

Instead, Mr Turnquest indicated that the Ministry of Finance would look to reallocate existing Budget funding to provide extended support for individuals, households and businesses amid the wait for tourism's return and ongoing uncertainty over the strength and timing of its comeback.

He acknowledged that the delayed re-openings of properties such as Baha Mar, Sandals Royal Bahamian, the British Colonial Hilton and Club Med had dashed the Government's hopes of making quick, significant inroads into the unemployment rate and welfare dependency, and hinted that the Government had little choice but to continue propping up the economy for the time being.

"We did absolutely anticipate and hope, certainly, that the major hotels would be able to open and hire some of their staff - we didn't anticipate all - but we hoped it would be some - to lessen the burden on the central government," Mr Turnquest told Tribune Business.

"We recognise those people [hotel and tourism workers] are in need of assistance for a bit longer, so we're looking at the Budget to see how we can move things around to assist as many people as we can for as long as we can while ticking off some people whose industries have re-opened even though they may not be receiving the income they used to have and cover those that do not have an income at all.

"We'll try and adjust the programme so that those people have at least something through this period. I don't want to pre-judge it, but we appreciate the need for continued assistance in this difficult period."

Besides the confirmed resort closures, other major hotels such as Atlantis have also held-off on setting a re-opening date as they assess multiple concerns including the level of COVID-19 infections in both their major source markets and The Bahamas.

The Government had been hoping that major resorts would have been encouraged by the Ministry of Tourism's recommended October 15 re-opening date for the industry that is The Bahamas' largest private sector employer, which would have given hotels time to prepare for Thanksgiving, Christmas and the upcoming winter season.

The anticipated re-opening was seen as moving persons from the social security/unemployment lines and back to work, thus reducing pressure on the Government and National Insurance Board (NIB).

The latter has paid out close to $100m in unemployment benefits, with its minister, Brensil Rolle, having previously said this level of demand could create major liquidity pressures for NIB by end-September if the economy was not reopened and functioning. Combined with the Government, they have paid out $146.5m to some 43,200 persons to-date.

However, the present mandatory 14-day quarantine period imposed on all persons arriving in The Bahamas is deterring many potential visitors from travelling to this nation, giving the Government little alternative but to continue assistance such as the 13-week unemployment benefit extension; the Small Business Continuity loan programme; and the tax deferral and credit initiative.

Mr Turnquest, though, said any extension of these initiatives would not impact the Government's Budget preparations. "At this point we have no plans for any additional borrowing outside the envelope we have authorisation for from Parliament," he added.

"Some things are not going to happen because of COVID-19. Those funds we will be able to reallocate, and we will look at those areas to see how we can give people assistance."

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 in October, but some workers are now pressing for full termination packages rather than just receiving $150 per week.