Minnis says Davis’ comments are ‘reckless’

Prime Minister Philip Brave Davis’ declaration that there is a $1 billion difference between the numbers provided by the Minnis administration in its Pre-Election Economic and Fiscal Update Report “and the truth”, is a “reckless and dangerous” statement, Leader of Her Majesty’s Loyal Opposition Dr. Hubert Minnis said.

Minnis said Davis basically accused the former administration of “hiding $1 billion”.

Davis made the revelation in the House of Assembly yesterday.

During a press conference in the Minority Room, Minnis, who served as minister of finance, said, “That was a very reckless and dangerous statement made by the prime minister without providing the evidence,” he said.

“Therefore…I’m certain that the entire Bahamian populace are waiting for the evidence.

“He basically said that we have hidden $1 billion in such a short space of time. That is a reckless and dangerous statement. He must provide such evidence as the debate proceeds.”

Minnis added, “We have always complied and followed the law. We have not deviated. We [were] a law-abiding administration.”

The Minnis-led Free National Movement (FNM) was swept out of office on September 16.

The Progressive Liberal Party, under Davis’ leadership, won 32 of the 39 seats up for grabs.

During his first major address in Parliament yesterday, Davis, who serves as minister of finance, said he requested a full accounting of the government’s fiscal position when he assumed office.

He has described the country’s fiscal situation as grim.

Twin crises hit The Bahamas six months apart — Hurricane Dorian in September 2019 and the COVID-19 pandemic in March 2020.

Dorian, which caused $3.4 billion in damage, severely damaged Abaco and Grand Bahama, which are the second and third largest economies in the country.

The ongoing COVID-19 pandemic resulted in a months-long closure of The Bahamas’ tourism industry and other commercial sectors.

At the end of the 2020/2021 fiscal year, the fiscal deficit stood at $1.3 billion, up from $811.7 million in the previous year.

The national debt climbed to $10.3 billion. Gross borrowing was at $3 billion for the fiscal year.

Davis said a renowned accounting firm has been reviewing information provided by the Ministry of Finance with respect to liabilities of the government as of September 30, approximately one month following the issuance of the pre-election report.

“Madam Speaker, the numbers provided by the Ministry of Finance for the period ending the 30th September 2021, reveal a $1 billion difference from the numbers provided by the previous government in their pre-election report,” Davis said.

“I want to repeat that to be sure everyone hears it – there is a $1 billion dollar difference between the numbers provided by the previous government prior to the election and the truth.

“It is painfully clear that the pre-election report was an incomplete presentation of the government’s contingent and real liabilities.”

Davis said the Minnis administration’s pre-election report excluded over $100 million of contracts executed by the Ministry of Works, for which no funding has been provided in the budget.

He said that report also omits, among other things, under-funding of pension and gratuity payments for public officers, which is now being addressed in a supplementary budget that was tabled yesterday.

“The pre-election report omitted a loan assumed by the government for which the only source of payment is BPL, an entity with significant financial challenges,” he said.

“It excludes amounts owing for taxes for a star witness in a criminal case of a former Cabinet minister.

“This very unusual arrangement is supported by a promissory note signed by a senior official of the Ministry of Finance. It excludes court judgments made against the government, for which funding now has to be provided in this supplemental budget. It makes no mention of potential liabilities emanating from contract breaches committed by the former administration.”

Under the Fiscal Responsibility Act, a pre-election economic and fiscal update must be published no later than 20 days before a general election.

The Act mandates that the report detail updated fiscal information including government revenue outturn and forecasts for the current year and next three years; government expenditure; approval of new spending since the annual budget including contracts and service projects and policies; net and gross debt for the current year and next three years; and other significant financing matters that occurred or are planned.

It mandates several other items as well.

Former Minister of State for Finance Kwasi Thompson said yesterday that it is up to Davis to provide the details on his allegations.

Regarding the $100 million contracts executed by the Ministry of Works, Thompson said, “My response to that is the pre-election report was very specific in terms of what items should have been included in [it].”

He added, “The same technical persons who assisted and put together the report are the same technical persons who are in the Ministry of Finance today. So, it complied with that the law said it should comply with.”

Asked about the $1 billion disparity, Thompson said, “I cannot speak to that. I have no idea about the specifics of what the prime minister said. He should provide those specifics and then we can respond to it. But the report complied with the law in terms of what ought to have been included in it.”

Then-Shadow Minister of Finance Chester Cooper lambasted the Minnis administration in August for failing to meet the deadline to publish its Pre-Election Economic and Fiscal Update Report.

Once the report was released, Cooper said it was still in breach because it did not contain any information on contracts the Minnis government entered into since the passage of the 2021/2022 annual budget.

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