Govt Puts Bahamas ‘At Tremendous Risk’ – Bahamas Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The FNMs deputy leader yesterday accused the Government of treating the Public Treasury as a bottomless pit through its pre-election spending commitments, warning that it had placed the Bahamas at tremendous risk.

K P Turnquest told Tribune Business he had already reconciled himself to facing a total mess should the FNM win next weeks election, given that the Governments promises would bind any incoming administration.

He argued that the Christie administration was making numerous commitments the Bahamas can ill-afford in a last-minute bid to shore up its support, and secure a win at the ballot box.

Mr Turnquest accused it of defying warnings from the International Monetary Fund (IMF), credit rating agencies and now the Central Bank of the Bahamas, which are all calling on the Government to curb its soaring expenditure if this nation is to narrow its $300 million-plus deficits in the short-term.

These guys, in the last few weeks, have put this country at tremendous risk with the nonsense theyve done, the FNM deputy leader blasted to Tribune Business.

The Bahamian people ought to hold them accountable. Its not responsible for the Government to have done the things they have done in the last five weeks. Its irresponsible.

Mr Turnquest said he had personally heard more discussions about the risk of a Bahamian dollar devaluation, and of both local and foreign investors seeking to transfer assets, investments and funds away from this nation.

People are now starting to talk about the D word in a significant way, he warned, and are also talking about capital risk and flight.

Ive already decided, or reconciled in myself, that we will be inheriting a total mess. This government seems intent on its successor being bogged down in all manner of issues. Its going to be a very difficult year coming up. The Budget will be very difficult to manage, but we will have to be very responsible.

The Government has effectively embarked on a spending spree leading up to the May 10 general election, without estimating the cost to Bahamian taxpayers or how it will be paid for.

Among the treats handed out were the largest-ever promotions exercise at the Royal Bahamas Defence Force (RBDF), with 427 officers promoted this week. This came one day after 851 Royal Bahamas Police Force (RBPF) officers were promoted, and less than a week after the Government pledged to pay long-promised overtime payments.

The newly-released Baha Mar Heads of Agreement also commits the next administration to a massive, multi-million dollar energy and wastewater treatment infrastructure upgrade while relieving the projects new owner, Chow Tai Fook Enterprises (CTFE), of any responsibility to help finance this.

The Christie administration is also regularising 3,000 part-time public sector workers into full-time, pensionable civil servants - a move that will further add to recurrent spending and a $1.5 billion public sector pension deficit.

This comes on the back of a 4,500 net increase in the civil service since it took office in 2012. Mr Turnquest said that while neither he, nor the FNM, begrudged any of these promotions or appointments, the cash-strapped state of the Public Treasury raised serious questions as to whether the Bahamas can afford all this.

While we applaud these deserving officers promotions, we have to be responsible with the taxpayers dollars, Mr Turnquest told Tribune Business, and recognise this is not a bottomless pit; this is not a piggybank to play with.

These are peoples lives. Im very, very concerned about the commitments theyve made. We have a recurrent debt thats been increased by the salary obligations added to our payroll.

Im very concerned about the lump sum payments coming due, and how we meet those obligations we will find in place. It gives you very little room for manoeuvre going forward.

The Christie administration has added more than $2 billion to the national debt, the highest sum ever incurred in Bahamian history during a single term in office.

This exceeds the $1.5 billion added to the now-$7 billion national debt by the former Ingraham administration, which was roundly criticised by the then-PLP Opposition for doing so.

The Christie administrations debt has also been achieved despite the benefit of a $756 million net revenue increase since the January 1, 2015, introduction of Value-Added Tax (VAT).

Mr Turnquest said the Government was effectively ignoring the latest admonition by the Central Bank of the Bahamas, which this week urged the Bahamas to implement sustained expenditure controls if it was to meet its medium-term fiscal consolidation targets.

Arguing that Baha Mars impact was likely to be muted and delayed, the FNMs deputy leader added: For them to achieve any kind of balance, they need to rein in expenditure. Theyve increased expenditure by 11 per cent every year for the last five years.

The IMF and the rating agencies have been saying for the last five years that expenditure controls are an important part in the fiscal consolidation plan, but every year we see these increases in expenditure and no real attempt to rein them in.

Mr Turnquest accused the Government of hypocrisy, saying it had criticised its predecessor for signing contracts in the run-up to the 2012 election, only to now do exactly the same thing - along with temporary public sector hires.

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Govt Puts Bahamas 'At Tremendous Risk' - Bahamas Tribune