It's time for politicians to "be real", and for the public to come to grips with the truth about how the governments get the money to execute social and other programs, according to the nation's lead negotiator to the World Trade Organization (WTO).
"As a country, we still have a lot of education to do with our citizens regarding how government expenses and revenue works," Raymond Winder, who is also a partner with Deloitte & Touche, told Guardian Business.
"Somehow, Bahamians think the government can just create revenue and we can just continue to burden the government with this and that obligation and they will just continue to find [the money for them]."
Winder's comments follow a Moody's downgrade of the outlook for the Bahamian economy from stable to negative last week, although it affirmed the A3 rating for government bonds.
The international ratings explanation for the downgrade included a 150 percent increase in the debt level over the past decade to nearly half of GDP by the end of 2010.
Other reasons were historically low growth rates limiting the prospect of the country growing out of its debt burden and challenges the government faces to raising additional revenues.
Politicians have an important role to play as the country needs honest dialogue and discussion around these challenges, according to Winder, who said future opportunities for the government to borrow will be reduced.
"Going forward, The Bahamas will not be in a position to borrow to the extent that it has in the last five years," Winder said.
"We are not having sufficient balanced discourse on issues relevant to the country and while we may want government to do more, the reality is we are not in a position to continuously meet those new obligations."
Any expansion of existing government programs should be accompanied with an explanation to the citizenry of how such expansion would be funded.  Winder said the government is "really challenged" to control its existing expenses - the bulk of which are payroll related.
Addressing the challenges to raising revenue, the WTO negotiator said the most important part of that discussion must focus on the issue of leakage - losses in the amount of revenue the government actually receives versus what it should receive.  The current import-duty based tax system is one that should result in a minimum of such losses, Winder said, as it requires for the primary source to be paid up front.
He compared that to value added tax or income tax based systems that require voluntary reporting from persons or entities.  Typically, they produce greater losses through leakage, he said.
"Until we can put in place sound controls around identifying leakages, just changing the system may not yield as significant an increase in revenue as people may expect," Winder said.
"If those controls are not in place it would be very similar to real property taxes, and we all know there are huge sums still outstanding on real property taxes."

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