STATEMENT BY CHESTER COOPER, EXUMAS AND RAGGED ISLAND MP, DEPUTY LEADER OF THE PLP, 24 FEBRUARY, 2021
NASSAU, Bahamas — We watched in shock today as the prime minister and minister of finance presented yet another poorly crafted fantasy in this latest mid-year budget communication. It demonstrates that the country is suffering from three crises: the aftermath of Hurricane Dorian, the COVID-19 pandemic and the governance of the Minnis administration.
At a time when leadership should inspire confidence, this administration engenders none. The Fiscal Strategy Report is also void of any meaningful strategy, just a repeat of same old rhetoric. Meanwhile, many have overdue payments from NIB. Many remain jobless, hungry and suffering, with minimal compassionate relief.
One almost never hears this administration speak of the real pain and suffering so many of our fellow Bahamians are currently enduring. These are the people who this mid-budget review should prioritize.
But it has not. Once again, the government has fallen far short of its revenue projections and steamrolled its expenditure projections, demonstrating that nothing this administration forecasts in its budgets actually comes to pass. We are deeply concerned about the double-edged sword of increased borrowing and dwindling revenues as certain sectors of our economy remain closed.
The Minister of Finance spoke shamelessly of reserves being up, without acknowledging that it is a result of borrowing in foreign currency at ridiculously high rates. It’s like borrowing to pay the rent and then bragging that it is paid. What was presented today was a bleak picture that only compounds our concern after a six-month snapshot and the condemnation found in the last IMF Article IV statement.
The revenue position is much weaker than expected, with a $425 million falloff against the previous period. This puts us at the position of only having collected around 40 percent of projected revenue to the mid-year point. Without any significant improvement, this will likely translate to a revenue shortfall of more than $400 million for the full fiscal year. At this rate, we are headed for another record fiscal deficit that could near $2 billion without a plan to increase revenue prospects.
A revenue shortfall this year will mean deferred expenditure into the next fiscal year, which will hopefully be the last year of this administration. What we have seen over the past year are measures that have unnecessarily hurt our economy and damaged our prospects at recovery. No amount of spin can change the fact that we are in a perilous situation with an administration bereft of meaningful to navigate us out of this.
We also have a minister of finance who has failed to follow the law on reporting on procurements during the emergency orders. First, they blamed the Progressive Liberal Party for them raising the rate of VAT to disastrous results. Then they blamed Dorian for knocking off their ill-advised fiscal responsibility strategy. Now, we are told that COVID-19 is to blame for everything. We hear a great deal of blame almost daily. Yet we never hear a credible plan.
The communication today was devoid of any real strategy and was a rehash of what we already knew and what was presented in the six-month fiscal snapshot. We heard nothing about what recommendations of the Economic Recovery Committee are being pursued. We also heard nothing about what projects are being fast-tracked as was promised by the prime minister earlier this year. We heard nothing about the progress of the Carnival cruise port or the sale of the Grand Lucayan.
It is doubtful that this administration will be able to fund the next budget without external help. Bahamians should brace themselves for an unprecedented period of economic calamity and stagnation under this administration.
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