Prime Minister Perry Christie delivered the government's budget communication on May 27, 2015. There were quite a number of important points made and initiatives were announced for the 2015/2016 fiscal year. The communication also gave the governmentan opportunity to provide an account of its stewardship of the nation's finances and provide clarity on matters of national importance.
As can be expected, some praised the budget and others criticized the same. In customary fashion, it was not surprising that the members of the government and supporters of the governing party touted the budget while the Official Opposition found flaws in the communication as lacking in substance and being more of the same.
The 2015/2016 budget was entitled "Building a Stronger Bahamas" and the prime minister highlighted a new initiative aimed at encouraging us all to get involved in building a stronger Bahamas. This piece objectively considers the budget and explores the question as to whether we are stronger today than we were in prior years - after all, the numbers don't lie.
Fiscal highlights
One of the biggest pieces of news coming out of the budget communication is the reduction of the GFS deficit by $342 million or two-thirds over the past three years from a high of $539 million during the FY 2012/13. Regardless of our political affiliation, we can all agree that this is a positive trend and a step in the right direction when we also consider that the government expected to borrow $182 million in 2015/2016 compared to $670 million during the 2012/13 fiscal year.
The government's projected GFS deficit for the current period is estimated at $198 million, down $88 million from the initial forecast of $286 million; 31 percent lower than initially forecast and lowest in seven years. Additionally, recurrent and capital expenditure as well as total government debt are expected to come in slightly lower than the budget forecasts.
The introduction of value-added tax (VAT) received mixed reviews from several stakeholders and individuals within the country. However, many agree that the implementation is worthy of commendation although it was not totally hitch-free. Like other nations that have introduced VAT, initial intake has surpassed projections as VAT receipts for the first three months of 2015 totaled $110 million. While it may be too early to tout VAT as a success, initial figures suggest that the government seems to be achieving its goal of increasing revenue.
Healthcare
The topic of National Health Insurance (NHI) has dominated the press for the past week with diverse views expressed on this important matter. It is important to note that the government has a duty to its people to move toward the achievement of universal health coverage. More importantly, we ought to protect the people who cannot help themselves and ensure that they have access to quality healthcare.
On this fundamental point, the debate has revealed that we are all on the same page and agree that NHI is required. The main contention seems to be the manner in which NHI will be implemented and the prime minister seemed to have addressed some of these concerns by stating NHI will be phased in and a comprehensive consultation exercise will be undertaken.
While many question the logic of imposition of VAT on healthcare and health insurance premiums as we move toward NHI implementation, it was encouraging to see that the government has determined that there will be no excise tax on medical equipment, audio/visual equipment and alarms.
The biggest announcement on this topic, however, was the fact that NHI will be implemented in January 2016 at no additional cost to Bahamians. In essence, there will be no initial additional taxes to implement NHI at this time.
In the interim, the budget provides $60 million to improve quality and efficiency in the administration and delivery of existing healthcare services. In this regard, the government would do well to ensure that the existing health infrastructure, systems and human resources are strengthened as part of this process.
The government ought to be commended for taking a prudent approach to NHI implementation to ensure that it is not only affordable but also sustainable. This demonstrates maturity in governance, which ignores political pressure and rhetoric in favor of sound economic decisions in the national interest.
Youth empowerment
The rate of youth unemployment in The Bahamas and the region is quite high. There is no doubt that this is cause for concern and should be one of the main priorities of the government.
It was therefore encouraging to note that $20 million has been allocated in the budget for youth jobs training. While the vehicle through which this program will be implemented has attracted some concerns, the commitment should be applauded.
However, it would be wise to reconsider the involvement of Urban Renewal 2.0 in this program until the outstanding issues regarding the social initiative have been properly addressed.
It is often said that perception is reality and even though the validity of this saying could be challenged, we should be careful not to taint this vital initiative with unnecessary allegations or distractions. The youth of The Bahamas need to feel like a part of our country and this initiative has the potential to empower the future leaders of our commonwealth.
An important aspect of this proposed program must be the acquisition and development of skills by our young people. Hence, the private sector must play a major role if we are to achieve our objectives in this regard.
Tax relief, housing and the environment
The prime minister announced reductions in stamp duty in real estate transactions and excise tax on vehicles. The ban on the importation of vehicles 10 years old or older is a welcome development in that it should impact the health and safety of our people.
Our environment will also be better for this ban due to potentially harmful emissions from older vehicles, some of which are not roadworthy.
The granting of tax exemptions on building materials for construction in economically depressed areas in New Providence should assist the less privileged among us, provided it is not abused. The government working through its agencies will need to ensure proper policing in this regard.
The construction of 1,000 homes though a public-private partnership involving the Bahamas Mortgage Corporation should generate some economic activity and assist our people in achieving their dream of home ownership if properly implemented.
Conclusion
In the coming days, we will receive more details on the government's plan for the 2015/2016 fiscal year as the budget debate gets underway. The Bahamian people will be listening attentively to get an idea of where we are headed as a nation.
What they hear will either encourage them and give them hope for the future or discourage them and paint a gloomy picture of tomorrow.
While we await the presentations, the answer to the question as to whether we are stronger as a nation will remain subjective in a nation polarized by politics and political affiliation.
One thing is certain, though, in spite of the challenges we face with crime, high unemployment, unhealthy debt-to-GDP ratio and a sluggish economy, our financial position is improving and trending in the right direction.
There is much work to be done and we must continue to work to wipe every tear from every eye in our country. A stronger Bahamas is a united Bahamas in which we work together in the best interest of all of our people, not just a select few.
o Arinthia S. Komolafe is an attorney-at-law. Comments on this article can be directed to a.s.komolafe510@gmail.com.
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