The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

A Cabinet minister yesterday defended the Government’s decision to slash funding for small and medium-sized businesses by $5m, arguing that this will not “interrupt” support for the sector.

Senator Michael Halkitis, minister of economic affairs, speaking ahead of the weekly Cabinet meeting, confirmed that “the plan is to have everything in place, and to have the whole supplemental Budget passed, by the first week in December to come into effect the first week in January”.

However, funding for small and medium-sized enterprises (MSMEs) has been cut from $30m to $25m in the Ministry of Finance’s capital budget. This appeared to go against the Government’s promises to provide the sector with $50m in annual support over a five-year period for a total $250m in financing.

When challenged about this, Mr Halkitis said: “We’re not interrupting anything in terms of small business development. As a matter of fact we will be looking at more ways to get more private sector involvement in small business development.

“Some people say that $50m a year is not enough and, quite frankly, we agree, but we have to do what our resources dictate. If you look at it carefully there’s a lot of reallocation because of the introduction of new ministries and allocation of portfolios. You might see some reallocations but our commitment is $250m over five years.

“If it’s not with the SBDC it’s going to be with the array of organisations like the Bahamas Development Bank, the BAIC (Bahamas Agricultural and Industrial Corporation), the venture capital fund along with the SBDC, and the Government’s guarantee programmes that deal with small business.

“So there is no diminution of the Government’s commitment for small business development. We feel that’s the way to go, particularly coming out of COVID-19.”

Mr Halkitis also drew attention to rising inflationary pressures, and said: “Particularly as we talk about inflation, we are having certain issues with shipping and the supply chain, and all of that’s exacerbating that.

“We import for everything, and so we will feel the effects. But they tend to be cyclical, and so at a certain time of the year you might see increased demand, particularly in the holiday season, but we expect that to smooth out because our inflation tends to track the US at about 3-4 percent.

“But, you know, we expect that to even out, and it’s one of those vagaries of economics. In a period it would be up and then it’ll come back to normal. Admitting that there is “nothing much” the Government can do about inflationary pressures, Mr Halkitis said: “We expect all of those issues to be worked out in the New Year.”