The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Governance reformers yesterday charged that the Government's promises of enhanced transparency and accountability are not matched by financial allocations in the 2023-2024 Budget.

Matt Aubry, the Organisation for Responsible Governance's (ORG) executive director, told Tribune Business that official rhetoric and policy statements on this issue were not reflected in the level of resources being allocated to initiatives and units that could drive improvements in this area.

Calling on Bahamians to more actively pressure their MPs and political leaders for greater progress in this area, Mr Aubry said the disconnect was exposed by the fact that the funding allocation for the Freedom of Information Unit remains flat with this year at $140,000 during the upcoming 2023-2024 fiscal year.

And, while the Public Disclosures Commission had received an increase, it was just $60,000 to take its total level of funding from $20,000 to $80,000. The ORG chief said there also appeared to be no Budget allocation for an ombudsman's office in the 2023-2024 fiscal year despite legislation to create the post being tabled in Parliament recently.

Mr Aubry argued that the functions performed by an ombudsman could be especially critical in resolving disputes between the Government and its citizens given the number of grievances that were likely to erupt as the administration pursues efforts to collect $1bn-plus in past due tax arrears.

"These don't necessarily match up with the statements and rhetoric around the policy," he argued of the Budget allocations. While the Government was focused on hitting its deficit targets, and revenue and spending objectives, the ORG chief voiced concern that observers will "not see a clear level of transparency and accountability" that they may be looking for.

As an example, Mr Aubry said the Freedom of Information Act was passed some seven years ago, but only several portions have been implemented and Bahamians are "no closer" to being able to request and receive information from the Government via this mechanism.

And he also voiced concern that the Fiscal Responsibility Council's $150,000 annual budget has been transferred from the House of Assembly to the Ministry of Finance - the very agency it is supposed to oversee in terms of the annual Budget and Fiscal Strategy Reports. "It was supposed to be under the House. That made it more independent," Mr Aubry said.

ORG, in a statement, said: "ORG notes that the level of allocation does not seem to align with the key policy outcomes outlined in the Government's ‘Blueprint for Change’ manifesto. Of particular concern is the proposed funding for the Freedom of Information Act (FOIA) unit, which remains stagnant at $140,000.

"Despite promises made over the past two years to bring FOIA into effect in ten government agencies, the unit acknowledges that they are currently underfunded to fulfill their mandate of granting citizens access to government-held information as established by the FOIA passed seven years ago.

"ORG additionally notes the absence of funding for an Ombudsman despite promises to debate and pass an Ombudsman Act. Furthermore, the allocation of $80,000 for the Public Disclosures Commission seems insufficient, especially considering a government commitment to a revised Public Disclosures Act, which can improve compliance and transparency in the disclosures process."

ORG added that "the need for meaningful reform in this area is underscored by the outstanding disclosures of public officials, which continue to be a pressing issue". It also argued that funding for the Tax Appeal Commission is also insufficient given that it is now expected to also handle disputes over public procurement contracts in addition to its existing tasks.

"ORG further highlights a concerning disparity in the Budget allocation for the Tax Appeal Commission given the Government's heavy reliance on reclaiming due taxes and implementing new fees and levies as part of its revenue strategy," the group charged. "This can be expected to result in a significant surge in appeals.

"However, against ORG’s offered recommendations, the 2023 Public Finance Management Act eliminated an independent Procurement Board, which was to build transparency and confidence by receiving and adjudicating vendor concerns related to government contracts. Instead, these cases will now be brought to the Tax Appeal Commission. The rationale behind this decision was to save costs by eliminating an additional board.

"Nevertheless, the current allocated funding appears insufficient to support the necessary training and public education required for the expanded scope and role of the Tax Appeal Commission. In the face of reduced mechanisms for transparency and accountability in the revamped Procurement and Public Financial Management Acts, ORG emphasises the critical need for strong and well-funded independent mechanisms for oversight and accountability," it continued.

"Without adequate funding and support, these vital pillars of good governance will be compromised, hindering the progress of The Bahamas towards greater social and economic opportunity for all. ORG urges citizens to appeal to the Government of The Bahamas to reevaluate the Budget allocations and prioritise the funding of transparency and accountability mechanisms, including the FOIA unit, an Ombudsman and the Tax Appeal Commission/ Procurement Board."

Moody's, meanwhile, said it expects The Bahamas' debt-to-GDP ratio to fall below 75 percent by 2026 due to ongoing fiscal consolidation measures. The rating agency, in its analysis of the 2023-2024 Budget, said: "The Prime Minister's Budget communication outlined a continued path for fiscal consolidation with relatively few changes to fiscal projections through fiscal 2026 compared with earlier government projections.

"The Government expects the fiscal deficit to narrow to 3.8 percent of GDP in fiscal 2023, a faster pace of consolidation than originally projected this year. This reflects higher revenue, where taxes on international trade and transactions have exceeded Budget targets and have more than offset higher spending in areas like wages and salaries, interest payments and subsidies provided to non-financial public corporations.

"The Government's fiscal position benefited from a very strong recovery in economic activity, in particular tourism, which has driven revenue growth. At the same time, the Government has largely displayed commitment to containing spending, keeping any upward revision to spending targets below upward revisions to revenue forecasts."

Looking ahead, Moody's said: "In fiscal 2024, the Government projects continued revenue growth and control over spending to drive the fiscal deficit to 0.9 percent of GDP. Recurrent revenue is set to expand 14.2 percent in fiscal 2024 compared with fiscal 2023, while recurrent expenditure will remain relatively flat. Similarly, the government expects capital expenditure to increase only slightly.

"The deficit reduction demonstrates the Government’s commitment to fiscal consolidation after years of large deficits. Over the past five fiscal years, the average fiscal deficit was 6.4 percent of GDP. We forecast a broadly similar path for the fiscal balance and the debt-to-GDP ratio, which we expect will decline to 82.7 percent of GDP in fiscal 2024, declining further below 75 percent of GDP by fiscal 2026."