The Central Bank of the Bahamas.
THE Free National Movement yesterday expressed concern about the Bahamian economy and the management of the country’s fiscal affairs.
The opposition also repeated calls for the government to come to the Bahamian people with a strong and definitive plan to counter the effects of inflation and to execute a credible and robust fiscal and economic plan.
“As reported by the Central Bank and the Bahamas National Statistical Institute, the country is facing a historically high inflation rate that is creating significant hardship for Bahamian families, especially working families on a fixed income,” the party said in a statement.
Regarding inflation, the FNM said Bahamians have seen how other governments in the Caribbean and around the world have taken prompt and effective steps to reduce the impact of inflation.
“Governments have temporarily capped or eliminated gasoline taxes. They have expanded the list of VAT-free products. They have provided even more vouchers and help for working families and businesses.
“The Davis administration has been twiddling its thumbs, just now finally realising this week that it ought to consider a tax break on gasoline when we in the FNM had recommended this same thing and much more months ago. When we made the recommendation they claimed that it couldn’t be done. Now that gas prices have finally started to come down, they just now realise that Bahamians need a break on fuel tax to combat the massive spike.
“They must explain to the Bahamian people how they can now consider a reduction on VAT on gas, but refuse to do the right thing and eliminate VAT on bread basket items and medicines given how the prices of these essential items have shot up due to inflation? When will the Davis administration finally accept that - as other countries have done - that it is critical to remove VAT on essential items in order to protect struggling families throughout the country?
“Further, we once again call on the government to announce the dates for the annual Back to School VAT holiday that was started by the FNM. Working parents will need the savings even more now that the prices of virtually everything have gone up. If you will take VAT off gasoline, do the same for breadbasket items and medication. Provide assistance to struggling small businesses through the Small Business Development Centre or the one-time purchase of inventory VAT free.
“We hasten to point out that the FNM believes in fiscal responsibility. Thus all of these necessary tax relief measures must be paid for through additional revenue measures or reduced spending. Thus to cover the cut in the gasoline tax and the elimination of VAT on essential items, we call on the government to put back in place the 12 percent VAT on real estate over $2 million, when that tax cut only benefited wealthy Bahamians and foreigners.
“The government should also postpone its current illegal tax cut on yachts for the wealthy until this can be properly done through the Budget process. Further, the government should eliminate the $4m increase in the international travel budget, radically reduce the $30m allocation for consultants, and scale back planned spending for events, entertainment, and other non-essential items.
“The Davis administration must give priority to helping struggling Bahamian families deal with inflation.”
The FNM further spoke to The Bahamas’ international bonds - Series 09/29 and series 20/32 - saying they were in the midst of a historic price collapse as reported on the website of the Frankfurt stock exchange.
“The 20/32 series are trading today (August 5, 2022) at 57 cents on the dollar and the 09/29 series is trading at 52 cents on the dollar. The latter is now down by more than 50 percent from last year and both bond series have trended steadily downward over the last 52 weeks, erasing close to half their value.
“Why is this occurring and what effects will this have on The Bahamas? The government must bring focus on this troubling occurrence.
“The government must heed constant advice to bring to Parliament a credible medium-term fiscal plan that ensures expenditure restraint and a defined flow of enhanced revenue inflows. The extravagant spending on travel, entertainment, and events must be curtailed, and the engagement of consultants and new staff must be kept strictly to a limited number of priority areas. The government must articulate a coherent tax reform plan and must bring the same to the public for a full consultation.”
The Opposition said it recognised the gravity of this situation and stands ready to support the government in any credible and consultative effort to address what has become a critical issue for the country.
Comments
Sickened 2 years, 3 months ago
Fiscal planning and the PLP and oil and water - they will never come together.
JokeyJack 2 years, 3 months ago
"...but refuse to do the right thing and eliminate VAT on bread basket items and medicines"
Yes - that seems to be the FNM agenda all along - make things easier for Haitians to buy rice and breadbasket items which is all they buy.
And this article seems to suggest that Bahamian financial hardship only began with the recent "inflation" talk since the war in Ukraine. What a joke. So things were all rosy while FNM was in power, eh? My memory must be failing.
But don't worry about Bahamians anyhow, they will vote yall back in in a couple years. Yall get to take turns every 5 years cause that's the only Parties they know. You can just relax. I don't even know why you bother making press statements. Just sit back and wait for the fingers to ink.
Maximilianotto 2 years, 3 months ago
Why’s the bond trading so low? Default and haircut priced in. It’s the market not the talks. Rothschild and IMF will fix it. At current situation and market perception the government can pilfer the remaining B$ holders who then wil be CCC rated and the international markets will be closed, It’s so simple.
birdiestrachan 2 years, 3 months ago
The FNM could not care less for the Bahamian people they increased VAT 60 % the increase affected services , they are only making foolish noises trying to fool those who are foolish already flour and coking oil bakeries and hotels can thank the FNM no fruits or vegetables or juice were on the list for the people
Sickened 2 years, 3 months ago
And who raised VAT from zero to 10% on breadbasket items? I guess that don't mean nothing to you or your family?
Flyingfish 2 years, 3 months ago
Yeah but who was the ones who put it down to 10%. Anyway enough PLP and FNM chatter, It is time we stop voting for this outdated and visionless elite couple who swear they have nothing to do with the other.
Except quite interestingly one party literally gave birth to the other.
sheeprunner12 2 years, 3 months ago
Birdie, the PLP is a party of illusion ....... Nothing of substance has been done since Sept 2021.
Lots of talk, travel and ceremony, but very little action on the ground. But watch how much spending will take place. Padded contracts and hiring of PLP friends, family and lovers will be the order of the day.
LastManStanding 2 years, 3 months ago
Says the party that just finished governing the country for a little over four years lol. Must think Bahamians forgot about those lockdowns.
sheeprunner12 2 years, 3 months ago
LastMan, don't compare Covid lockdowns with postCovid PLP gimmicks. Most of what Brave did after Sept 2021 was inevitable to happen regarding Covid protocols.
But we can all see that Brave has no real strategy to implement all of his New Day rhetoric.
What if any tangible difference has the New Day PLP done when it comes to: 1. Illegal migration/human smuggling. 2. Guns & murder. 3. FI infrastructure. 4. Local government. 5. Public service reform. 6. Public Transport 7. Agriculture. 8. Education. 9. Health. 10. Environment
Lots of talk, ceremony, travel & PR gimmicks, but little changes seen on the ground. The place is dirtier, the people are more stressed and pockets are emptier.
LastManStanding 2 years, 3 months ago
Oh, I agree with you that the PLP is selling dreams, but it is a bit hypocritical to talk this way considering what went on during the last administration. To be frank, I really don't expect either party to get the fiscal situation under control. Imo, it is too far gone.
tribanon 2 years, 3 months ago
Rothschild + Anthony Ferguson + James Smith = No hope.
That's three too many foxes of the worst possible kind that flummoxed and desperate Davis has allowed into the house of scrawny hens. And those three greedy foxes will chew, gnaw, crunch and swallow even bare bones. Not so much as a morsel will be left at the end of the day for the hovering foreign vultures the IMF represents, let alone the Bahamian people.
ted4bz 2 years, 3 months ago
By now anyone silently and intellectually paying attention to what’s going on already knows that the government of the Bahamas is in no position to make one ounce of a different to what they waltz into at the behest of foreign and global orders. We are not that kind of country. We do as we are told even if it means to damage every one of us, literally.
ColumbusPillow 2 years, 3 months ago
The warning is indeed justified! Mr PM please do not go to any more expensive climate change orgies. They do not help the economy. Climate change activists are not scientists.
SP 2 years, 3 months ago
Please STFU Pintard! The goose is no better than the gander.
Maximilianotto 2 years, 3 months ago
Game over if PM traveling or not.Enjoy as long as IMF and Rothschild permit as IMF will suggest elections to have a government in place who then can sign unconditional surrender.
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