The Tribune

By LEANDRA ROLLE

Tribune Staff Reporter

lrolle@tribunemedia.net

PROGRESSIVE Liberal Party Deputy Leader Chester Cooper has slammed the Minnis administration’s proposed 2021/2022 budget for the upcoming fiscal year, branding it as one that’s “badly flawed” and “far removed from reality.”

Mr Cooper’s comments came after Prime Minister Dr Hubert Minnis on Wednesday revealed additional tax relief initiatives aimed at assisting people amid the pandemic, including a back-to-school value added tax (VAT) tax holiday and a VAT holiday for hurricane preparedness.

On May 26, Dr Minnis unveiled several tax concessions for entrepreneurs and small businesses and outlined plans to create employment in the public and private sector among other things.

However, on Wednesday Mr Cooper attacked the government’s financial plans to help the nation rebound from the COVID-19 pandemic, referring to the 2021/22 budget as one “of sheer fantasy” and a purely political one.

“This budget is a disaster much like this administration's entire term in office,” he said in the House of Assembly. “The government debt has increased over 40 percent. The last three years of this administration has given us the worst fiscal outcome for any consecutive three-year period of GDP in Bahamian history.

“This administration came into office promising better fiscal management but will go down in history as the worst manager of fiscal affairs in a modern Bahamas. This budget is sheer fantasy. It will stunt the growth of the country for decades unless it’s policies are reversed and reversed quickly,” Mr Cooper added.

“Don’t get me wrong, there was never any question that Dorian and the pandemic would bring economic hardship that led to heavy borrowing but the Minnis administration’s navigation of the pandemic added to the dangers presented in this budget and accompanied communications will ensure that things get worse before they get measurably better.

“This is a budget characterised by short-term thinking and ignorance of the severity of our debt position and it contains reckless electioneering.”

Addressing the government’s revenue projections for the upcoming fiscal year, Mr Cooper characterised them as “unbelievable” and unrealistic.

“The core of the budget is the revenue estimates,” he told the House of Assembly. “In this area it is painfully obvious that something is wrong. The Minnis administration is either incompetent or intentionally trying too hard to make these numbers work, or both. This administration believes that it would collect 18.3 percent of GDP or $2.24 billion this fiscal year after falling woefully short of this year’s modest target of $1.76 billion.

“It believes that this can be accomplished despite granting perhaps an additional $100 million in new concessions. This is simply unbelievable. It is more likely that revenue would be around 16.5 percent of GDP or $1.78 billion; not as bad as the current year but about $400 million short of the predicted target.

“Looking at the revenue details it is easy to see the areas where there would have the greatest revenue shortfalls: VAT, real property tax and customs. These are the areas where the cancelled Revenue Enhancement Unit was making the most progress,” the PLP deputy leader continued.

“Though all budgets are rooted in hope in terms of forecasting revenue, there is too much trafficking in hope on the revenue side.”

The shadow finance minister also pointed to the country’s ballooning debt, which remains on course to top $10 billion by the end of the next fiscal year.

Mr Cooper said the nation’s borrowing is at “staggering” and “unsustainable levels” and also called the country’s projected deficit “flat out scary.”

The deficit is projected to be $951.8 million in the 2021/2022 fiscal year.

“We have a debt crisis approaching and this administration prepares to be ignoring it altogether. Ostrich economics will not help you. It will not help the Bahamians people.

“This administration fails to bring a debt management plan as promised in the last fiscal snapshot. This administration’s failure to put forward a plan to manage debt means our country is viewed as a risker bet which makes our borrowing more expensive.”

Mr Cooper said the Minnis administration’s past budgets, including the 2021/22 one, shows that the government has no plan and also accused the government of lacking transparency and accountability – something they heavily campaigned on in the last election.

He charged: “We have no report from the Fiscal Responsibility Council, which was required by law by the end of March. We have no detailed report on Irma donations. We have no report on Dorian donations. People still asking, where the hurricane money gone?

"We have never been told how much we paid foreign attorneys to prosecute Bahamian political figures. Let’s not forget, the Oban files are still missing. We never got a report on the removal of the BPL board. And the recent loan agreement for the IMF loan and the new loan agreement for the World Bank has not been brought to Parliament. So, you failed on transparency and accountability too.”