The Government of The Bahamas will redress the imbalance between spending and revenue by giving “immediate and urgent priority” to a fundamental and durable restructuring of public finances in order to strengthen and secure the country’s international standing and the future prosperity of the nation, Prime Minister, Dr. the Hon. Hubert A. Minnis said Tuesday. “Doing so is critical to securing the Government’s ability to implement its reform, modernization, and growth agenda in a responsible and fiscally sustainable way during the course of our five-year mandate,” Prime Minister Minnis added.
Prime Minister Minnis said Administration officials are currently “striving to finalize” Fiscal Responsibility legislation for tabling in Parliament “at the time of the next Budget Communication” as part of their efforts to redress the imbalance. “My Government believes that such legislation can usefully serve to constrain the ability of governments to engage in excessive spending above and beyond the levels approved by Parliament, and also serve as a legal check on the ability of a government to run-up unwarranted annual deficits above and beyond budgetary projections. “I would only wish to emphasize at this time, my Government’s firm resolve to implement such a law as a practical constraint on governments, that will facilitate and secure, the move towards the elimination of the GFS deficit, and the return of the burden of government debt to lower, more sustainable and appropriate levels. “I believe that a law of this type, will serve to improve the Government’s budgeting process by instilling a greater sense of realism and urgency into the exercise,” Prime Minister Minnis added.
Delivering his Contribution to the Mid-Year Budget Debate in the House of Assembly (Tuesday, March 20), Prime Minister Minnis said the level of government operational spending on programmes and services “that is out of line with the revenues that are available” was at the crux of the country’s current fiscal problem. “This gives rise to the unsustainable fiscal position that we inherited,” Prime Minister Minnis said. “Its resolution requires determined action – in the near term and going forward – to bring spending and revenues back into balance. “Over time, as our growth agenda begins to bear fruit in the form of more buoyant economic growth and job creation, revenues will of course also be bolstered. This will pave the way for fiscally sustainable higher levels of spending on critical programmes and services.”
The Prime Minister said the Government will implement a number of new initiatives during the course of this fiscal year to remedy the imbalance between spending and revenue – mainly by a review of expenditure programmes, and the introduction of Fiscal Responsibility legislation. “As the Cabinet mandated in July of last year, Ministries and Departments are implementing a 10 percent reduction in operational spending from projected levels going forward,” Prime Minister Minnis said. “They are engaged in an in-depth and fundamental review and assessment of government programmes and services across the board. Many of these have been on the books for years, and are well overdue for a fresh review as to their effectiveness as well as to the efficiency of their delivery. “I cannot stress strongly enough, the importance of this exercise and how committed my Cabinet colleagues and I are to its success. Achieving such a permanent level of savings will admittedly be challenging. It will require tough decisions and trade-offs. “Thus Ministers, individually and Cabinet as a whole, will drive this process directly and decisively in order to secure the needed fiscal savings that have been identified,” Prime Minister Minis added.