At times, the comments uttered by public officials indicate how detached they are from the economic realities of our people. Value-added tax (VAT) came into effect the beginning of this year at a rate of 7.5 percent. The tax was instituted to increase the revenue intake for the state.
The budget deficit for the 2012/13 fiscal year was $647 million. The projected deficit for the 2013/14 fiscal year was $550 million. With a debt-to-GDP ratio of 66 percent in 2013, The Bahamas is not in the crisis zone. Our debt level, however, more than doubled in just over a decade. It was only 30 percent in 2001.
To raise money, the government has taken money from single mothers, struggling businesses and those who do not even have enough to keep their lights on via the new consumption tax. All the while state spending levels remain at the highest levels. The increase in the cost of living as a result of VAT is obvious. Stand in a line at any grocery store and you hear the complaints of Bahamians as they watch their dollars buy less and less.
VAT represents the largest tax increase in modern Bahamian history. The people with so little feel it. In this context, the government has planned for next year another tax assault on the people. The Progressive Liberal Party (PLP) wants to dip into the empty pockets of taxpayers to fund the National Health Insurance (NHI) scheme.
Dr. Perry Gomez is the health minister. During his mid-year budget contribution in the House of Assembly yesterday, Fort Charlotte MP Dr. Andre Rollins sought to clarify whether the government planned to implement a new tax to support NHI. Rollins does not think we can afford it at this time. In response, Gomez suggested that a new tax is "better than death".
"We have to pay for it," he said.
Gomez headed a former commission on the issue under the first Christie administration. He noted the commission proposed a 5.4 percent payroll tax to fund the scheme. Gomez's comment that NHI is "better than death" demonstrates how lost the PLP is on this issue.
Bahamians have no more to give to the state. Many can't pay their mortgages, keep their lights on, afford to send their children to private school. Many more simply have nothing, as they have been out of work for years.
The national unemployment rate was last measured at 15.7 percent in November 2014. In Grand Bahama, the jobless rate was 18.6 percent; in Abaco, 20.3 percent. Youth unemployment nationally stood at 31 percent. Gomez's flippant remark and the prime minister's insistence on NHI indicate how out of touch they are with the struggles of so many Bahamians.
The people want to hear about policies that will lead to investment and job creation. They do not want to hear about more taxes to fund things we cannot afford. This government was elected nearly three years ago to help lead the way out of the major problems of our day.
On the two major issues facing The Bahamas - crime and unemployment - the PLP has failed thus far to provide any solutions. And now all we hear of for policy is new taxes. This is not what the people voted for. This is not what they expected.
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