Cooper: This is a failed budget

Pointing to the government’s recently announced tax breaks and employment and revenue initiatives, Progressive Liberal Party Deputy Leader Chester Cooper yesterday called the Minnis administration’s 2021/2020 annual budget a failure.

The government’s debt level is expected to rise to $10.4 billion in 2021/2022 and the deficit is projected to reach $951.8 million after another round of borrowing of $1.8 billion in the upcoming fiscal year.

Contributing to debate in the lower chamber, Cooper said the government squandered the opportunity to press the reset button and chart a new course for the country.

“The revenues are woefully unrealistic and absolute fantasy. The expenditures appear understated and underreported. As a result, the deficit is likely to exceed the projected $1 billion. The debt-to-GDP ratio is likely to be well in excess of 100 percent. We are maxed out and rolling over loans like a hamster on a spinning wheel. And we have a looming debt crisis with no discernible debt management strategy presented,” he said while contributing to debate on the budget in the House of Assembly yesterday.

“As for your so-called plan, four years in, still no vision, still no plan and still no strategy. This is your last budget, but it is by far your worst. I cry shame on this administration. This budget is a failure. It even fails as a proper election budget. Your promises are half-backed, ill-conceived, unrealistic, a day late and a billion dollars short. While it is filled with promises, many of these promises will not be fulfilled because this administration is out of money and thankfully you are out of time.”

Prime Minister Dr. Hubert Minnis presented the budget communication last week filled with tax exemptions, revenue enhancement initiatives, some expenditure cuts and increases.

Regarding the employment initiative in which the government is offering private businesses tax credits to cover the salaries of up to ten new employees for up to $400 per week per employee, Cooper said it has the potential to be a breeding ground for fraud and waste.

“The auditor general published a report on the last job initiative undertaken by the FNM administration during an election year. That should be mandatory reading for the persons who would be charged with administering this program. That program, in which the government used taxpayer funds to pay private sector employers to engage workers, was mismanaged and there were strong elements of fraud,” he said.

“The similarities between the two programs cannot be understated. This $40 million program, like the earlier program, is not about job creation but about electioneering. Also, an employer who took on five employees at $400 per week under this program would have to collect over $100,000 in VAT per year to pay them. Seems like a reach.”

The prime minister also last week announced an incentive for property buyers on certain Family Islands, eliminating VAT on conveyances for properties under $250,000 for Bahamians and a discounted rate for foreigners for two years to encourage persons to buy properties and homes on those islands.

Cooper said these initiatives will only impact a few and are counterproductive to the government’s goal of increasing revenue generation.

“Amending the Family Island Development Act (FIDA) to provide VAT exemptions sounds good, but how much does it cost and what percentage of successful applicants from the current FIDA are Bahamians? An exceedingly small percentage. Likewise, how many Bahamians have the resources to buy a second property in Grand Bahama or Abaco?

“Remember, VAT exemptions are already provided to first-time Bahamian buyers of property up to $500,000, so who is this impacting? With these exemptions, we will come nowhere near the revenue or GDP target and it will mean further borrowing and economic contraction. This administration seems unable to accept that there has been permanent job loss and business closure,” he said.

“And I also note, the government is now planning to forgo taxes on marijuana. This should be rethought. It starves government of a much-needed revenue stream. And I don’t hear any discussions on other new meaningful revenue streams either.”

Cooper also criticized the shroud over many of the government’s dealings since entering office, lambasting it for its lack of transparency on critical spending and allocations.

“We have yet to see the detailed spending for Lucayan Renewal Holdings and Grand Lucayan resort. You have yet to table in this House the lease for the post office at Town Centre Mall. I note an increase of $1.5 million for post office operations. Does the lease have anything to do with this? We have received no update on the health visa accounting, although there is $37 million in expenditure projected for it. We have no detailed report on the pandemic spending, though one is mandated by law. We have no report from the Fiscal Responsibility Council, which was required by law by the end of March. We have no detailed report on Irma donations,” he said.

“We have no report on Dorian donations. People are still asking where the hurricane money gone. We have never been told how much we paid foreign attorneys to prosecute Bahamian political figures. Let’s not forget, the Oban files are still missing. We never got a report on the removal of the BPL board. And the recent loan agreement for the IMF loan and the new loan agreement for the World Bank has not been brought to Parliament. So, you failed on transparency and accountability, too.”

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