The Tribune

• Opposition demands gov’t explanation as fiscal responsibility comes under scrutiny

• Thompson criticizes delayed release of fiscal reports

• Urges immediate action to address soaring deficit

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

The Opposition’s finance spokesman yesterday warned against an “exploded” deficit for Q1 and chided the government on holding back on its August and September fiscal report for so long.

Kwasi Thompson, former minister of state for finance under the Minnis administration, said in a statement that the “Opposition is alarmed to read in the extremely late September budget report that the first quarter budget deficit of $58m for fiscal year 2023/2024 is almost 300 percent higher than the $20m deficit for the corresponding period last fiscal year. Instead of seeing a rapidly shrinking deficit in line with the government’s broader fiscal plan, we see a deficit for the first quarter that has exploded year-on-year. The deficit seems to be well in excess of what should have been the target for the first quarter of the year.

“This is no doubt why both the credit rating agency, Standard & Poors, and the IMF are projecting that this Davis administration will bust its budget deficit targets by a huge margin. It also explains why in our view the government has deliberately held back the publication of these reports for months and months and tried to slide them out on a Friday evening before an extended Christmas holiday break. They were hoping no doubt that the Bahamian people would be distracted by the holiday festivities and would miss this bit of troubling fiscal news that does not fit into the narratives being generated by the PLP spin factory.”

The government reported a $47m increase in total spending resulting in a near-tripling of the government’s first quarter fiscal deficit year-over-year and also disclosed that the deficit for the three months to end-September 2023 hit $58m as compared to just $20.5m during the same period in the prior fiscal year.

Mr Thompson added: “Based on the September 2023 report, this year on year spike in the quarterly deficit was fueled by a $47m jump (percent) in spending that compared to a modest $9m increase (1.5 percent) in revenue. This is taking place in a budget where overall, the government is projecting that revenue is to increase by 16 percent and spending only by a half percent.

“But with the extravagant and unnecessary spending by this reckless PLP government, spending is increasing significantly while revenue is staying flat. What is also troubling about the September report in particular is the decrease in total revenue particularly VAT for the month when compared to last year September. Also for the month of September, we saw a tremendous increase in spending this year compared to last year September. This trend cannot continue.”

He added: “We note for the record that the government still has nine outstanding budgetary and fiscal responsibility council reports, some of which are over a year late.”