Kwasi Thompson
By EARYEL BOWLEG
Tribune Staff Reporter
ebowleg@tribunemedia.net
FINANCE State Minister Kwasi Thompson said the government made the “hard” decision to increase the country’s national debt over the short term in order to fund the assistance programmes needed to keep people afloat during the COVID-19 pandemic.
He made the comment after telling the Senate the Minnis administration has doled out more than $280m in unemployment benefits and assistance up to the end of May. He also spoke about other assistance initiatives the government has implemented.
“To disperse the desired level of assistance required us to make some hard decisions,” Mr Thompson said. “We could have chosen to provide only minimal assistance to households, businesses and the healthcare sector and maintain pre-crisis levels of debt. . .or we could have chosen to temporarily deviate from our debt plan to provide crisis-time levels of support to keep Bahamians afloat. We chose the latter. You know what, this was the right decision to make.
“We knew then that providing adequate support would increase our national debt over a short term period, but we knew it was a worthy sacrifice to take care of the Bahamian people in the midst of the crisis.
“It was worth it to save the thousands of businesses. It was worth it to feed the thousands of households, it was worth it to put money directly in the hands of those who lost their jobs.”
The Tribune previously reported that government debt remains on course to top $10 billion by the end of the next fiscal year due to the Minnis administration’s commitment to substantial deficit spending to help the country rebound from the COVID-19 pandemic. The deficit is projected to be $951.8m in the 2021/2022 fiscal year.
Yesterday, Mr Thompson also said some critics have concerns about the government’s revenue projections — which is estimated to increase by about $588.3m — for the upcoming fiscal year. However, he said he wanted to put those concerns to rest, saying with the opening of the economy in November 2020, the country experienced higher than expected or projected growth in revenue inflows from main tax categories such as VAT, customs and border taxes.
He added that revenue for the five months ending November 2020 totaled only $530m, a contraction of 42.4 percent compared to the same period of the prior year. “But if we look at revenue for the last six months - the period of December 2020 to May 2021, preliminary data places revenue ahead of budget projections by 13.5 percent or $126.6m.
“Revenue collection for the six months ending May 2021 is also ahead of actual revenue for the same period in the prior year by some $5.4m.
“Obviously, we do not expect revenue inflows to compare to the pre-Dorian or pre-COVID levels, but as I have said, Madame President, we are trending in the right direction and well on track to meeting this fiscal year’s revenue estimates. “The momentum is building. The economy is on a good path and The Bahamas is coming back,” he said.
Yesterday, he also said the government set a plan when the COVID-19 pandemic began and delivered on that plan, not anticipating the impact the disease would have on society.
“Madam President, through the end of May 2021, our government provided $284m in support for households by way of the NIB unemployment benefit programme and its unemployment assistance programme,” he said.
He said from September 2019 to May 2021, these programmes assisted more than 86,000 people who were employed in tourism, wholesale and retail and professional services.
“So, Madame President, when I hear people say that the FNM didn’t do anything, it is absolute and complete nonsense,” he said.
He said the Ministry of Social Services also provided support through its rental, food and clothing assistance programmes.
“We provided, Madame President, $35.9m for the National Food Distribution Taskforce.”
He said this supported more than 72,000 people.
Mr Thompson also touted the government’s investment in the Small Business Development Centre (SBDC) so that it could provide business continuity loans, grants and equity financing of $45m to over 1,020 businesses.
He said of that total, 450 businesses received grants.
“These are real businesses, with real Bahamian owners and real Bahamian employees who were able to survive the necessary shut-down of the domestic economy through our strategic support for the private sector,” Mr Thompson said.
Comments
Topdude 3 years, 6 months ago
This is called leadership and prescient governance. This debt is not to line the pockets of Ministers, cronies and supporters and kick-backers. It is to help small businesses.
Furthermore it is assist the man and woman on the street.
When the history of this period is written it will surely be said that the FNM Government came into office and found a man made disaster caused by PLP corruption and then two natural disasters. And despite these horrendous challenges they rose to the occasion, put our nation first and put the country on the path to recovery.
The FNM is what we call a God send party. God has blessed us with this morally and ethical party.
tribanon 3 years, 6 months ago
Yeah, right. LMAO
tribanon 3 years, 6 months ago
The fiscal recklessness on display here is born of sheer desperation by a failed Minnis led FNM administration.
John 3 years, 6 months ago
Tribune is it ‘madam’ or ‘madame?’ . Yes, firstly why do government keep including NIB benefit money as I funds it spent on assistance? It is the people’s money that they contributed and hence made them entitled for assistance during the pandemic. It should be separate and apart from what the government paid out to persons who did not qualify or did not contribute to NIB. And yes, there are some workers who still haven’t been paid unemployment assistance and NIB claims it is because their current or most recent employer did not make contributions. So these workers, some who are still not working, are more at a greater disadvantage than persons who never contributed to NIB but have collected three or four checks. . So this is a crucial time for businesses and individuals as the economy struggles to reopen. Some businesses, though operating, are not seeing the volume of sales needed to turn a profit or to even break even. And either they must do like government and get additional credit or the owners must inject more capital into the business. Many have not been able to benefit from any of the government assistance programs and some who have benefited have already exhausted those funds. So now store are becoming empty and ‘for rent’ signs and going up. . And the same for individuals and families.Funds are gone, credit is maxed out and it is starting to take a psychological toll. But, fortunately there is a healthy stream of tourist visiting the country and they are injecting new capital into the economy. And fortunately some of this money is getting into the hands of persons who desperately need it, like hotel workers, taxi and tour drivers and it is also impacting the economy as these persons can not shop and pay bills. . And government’s decision to reduce curfew by an hour also have a positive impact as restaurants can stay open for an additional hour. Government must now continue to monitor and enforce the safety protocols to avoid another shutdown due to the corona pandemic. Trying to separate and divide the population based on who is vaccinated and who is not is very irresponsible. Persons who are not vaccinated are more at risk from persons who are vaccinated and the narrative should be to encourage these people to follow the safety protocols until they decide to get the vaccination rather than to ridicule and scorn them.
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