06012017 business by tribune242

business@tribunemedia.net

THURSDAY, JUNE 1, 2017

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‘DAYS OF LARGESSE ARE OVER’: GOVT TO BORROW $722M By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Minister of Finance said yesterday’s Budget will drive home to Bahamians that “the days of largesse are over”, with the Government having to borrow a collective $722 million to cover two years’ worth of fiscal deficits. K P Turnquest told Tribune Business that he hoped the public will now realise “there’s no free lunch to be had” given the gravity of the Bahamas’ fiscal situation, with the 2016-2017 deficit having soared five-fold above the initial $100 million projection to around $500 million. When asked why yesterday’s deficit estimates were so different from the former Christie government, Mr Turnquest suggested it was a combination of the latter’s over-optimism and the Minnis administration’s more realistic approach to the Budget. The Government’s $323 million deficit projection for See PG B7

$400m ‘emergency funding’ sought To cover ex-Govt’s $320m ‘backlog’ $27m added to wage bill pre-election

THE private sector yesterday expressed hope that the 25 basis point reduction in the Business License fee rate marked the start of broader talks on the “best form of taxation” in the Bahamas. Gowon Bowe, the Bahamas Chamber of Commerce and Employers Confederation’s (BCCEC) chairman, said the slash to 1.25 per cent was “not comprehensive enough” as the Business License fee’s structure still meant companies could be “taxed into a loss”. “No matter what the fee

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$500m deficit ‘threat to fiscal credibility’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Government most move quickly to restore trust in its fiscal credibility, a governance reformer urged yesterday, pointing to the “vast, wild” differences between the new administration’s forecasts and those of its predecessor. Robert Myers, a principal with the Organisation for Responsible Governance (ORG), told Tribune Business that the nine-figure gap between the Minnis administration’s projections and those of the prior government threatened to undermine business, investor and

$300m change on 2017-2018 deficit forecast Target misses hurt investor, consumer faith ORG chief: ‘Trust but verify’ Govt forecasts ROBERT MYERS consumer confidence - not to mention that of the credit rating agencies - unless the differences were properly explained. He was speaking after the Government, in unveil-

ing the 2017-2018 Budget, revealed that the upcoming year’s deficit is projected to be $323 million - an almost $300 million increase from the $28 million in ‘red ink’ that was forecast by the

Christie administration just 12 months ago. Raising further questions about the former government’s fiscal forecasting, K P Turnquest, the minister of finance, said the deficit for the current 2016-2017 fiscal year was now estimated to be $500 million - a five-fold increase upon the $100 million that was forecast last May, and $150 million more than the mid-year Budget estimate. While Hurricane Matthew’s role in the deficit growing 400 per cent beyond projections, Mr Turnquest said the former government had exacerbated the storm’s impact by entering See PG B6

MINISTER ‘CONCERNED’ ON RATING AGENCY REACTION DEPUTY Prime Minister Peter Turnquest presents the Budget to the house. Photos: Terrel W. Carey/Tribune Staff

Tax ‘Task Force’ eyed as Business License fees slashed 25% pts By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

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By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Minister of Finance yesterday conceded he was concerned about how the credit rating agencies will react to a five-fold increase in the projected 2016-2017 deficit, plus $722 million in new government borrowing.

Hopes can ‘make case’ for no downgrade K P Turnquest told Tribune Business that he hoped the new administration’s greater fiscal transparency would help to convince

Moody’s and Standard & Poor’s (S&P) that it can “turn this thing around”, and ensure the Bahamas avoids a further downgrade of its sovereign creditworthiness - which is already at ‘junk’ status with the latter. Both rating agencies are due to visit Nassau for their annual visits this summer, and will likely be seeking

an explanation for why the Bahamas is missing its previous fiscal projections by hundreds of millions of dollars. “Obviously we are concerned about how they may view this thing,” Mr Turnquest said of Moody’s and Standard & Poor’s. “We give due regard to their See PG B10

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Atlantis gets preferential tax rate is, it’s being paid on gross revenue,” he explained. “A business on the borderline of profit or loss could be taxed into losses or further losses. “It’s still not a tenable situation, particularly for the See PG B11

Timeline urged for Fiscal Responsibility legislation By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Government was yesterday urged to provide timelines and details on its “fantastic” promises to reform loss-making government enterprises and introduce a Fiscal Responsibility Act. Robert Myers, the Organisation for Responsible Governance’s principal, said quick action by the Minnis administration on these pledges was vital to restoring private sector and consumer confidence that the Government will get the Bahamas’ public finances under control.

‘Fantastic’ pledge can halt ‘reckless’ spend $429m taxpayer subsidy eaters face reform ‘Zero tolerance’ approach to tax dodgers “We’re very pleased to hear legislation will be introduced, but when?” he told Tribune Business on the Fiscal Responsibility See PG B13

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