The budget debate opened in the House of Assembly on Wednesday with the Minister of State for Finance Michael Halkitis reiterating the prime minister’s sentiment on the country’s economy having a bright future.

Last Wednesday during his 2015/2016 Budget Communication, Prime Minister Perry Christie told the House of Assembly that the country’s budget deficit decreased by 65 per cent.

Mr. Christie had also projected that the government would have a $197 million deficit, down $353 million from 2012.

Mr. Halkitis informed the Bahamian public during his address that the Progressive Liberal Party has a very long way to go in terms of fiscal reform, and that is attributed to a system the PLP inherited.

“What landed in our lap was government deficit of $539 million, what also landed in our lap was an overdraft facility $200 million maxed out, all the other short term facilities maxed out,” he said.

“An incomplete road project Mr. Speaker that required the government to pay out the consolidated funds, from the government pocket so to speak, to keep the project going while we struggle to arrange the additional financing to complete the project.”

The minister said along with those problems unemployment increased and the government had to borrow money to pay bills that were left unpaid by the Free National Movement.

The minister also announced a number of tax reductions, which are considered as measures to help Bahamians.

“At the request of the Straw Vendors Association we’re reducing the duty on costume jewelry. At the request of the medical profession, we are reducing the duty on medical supplies inclusive of dental and veterinary and burglar and fire arms will now be duty free.”

Mr. Halkitis said specifically for example surgical gloves will decrease from 45 per cent to 10 per cent, needles, and catheters are going from 25 per cent to duty free.

The minister also made note of two tax increases, but provided that they were in the interest of a person’s benefit.

“We received representation from local water manufactures who present the case to us that they were victims of dumping where cheap water is being imported and that actually puts the local industry at risk,” he said.

“So we harmonized the duty on natural spring, mineral and disposable water. They will not attack the rate of 100 per cent and that is to give some protection to the local industry Mr. Speaker and to preserve Bahamian jobs and the local industries.”

The other case where there is a one penny surcharge is on fuel imports.

Other duty free initiatives, according to the minister, are also on bicycles, pesticides, canned and frozen vegetables, potting soil, construction boards and a few other items of food.

The government also announced that there would be an amendment on the Tariff Act that would benefit churches.

“As you know Mr. Speaker there was a list of items that can be brought in by churches duty free. Audio and visual equipment have not previously been on that list and now they have been added duty free.”

Mr. Halkitis also touched on the revitalization of what the traditionally calls over the ill or named depressed areas making them eligible for certain concessions.

Also on the agenda was the adjustment of the excise duty on motor vehicles.

“We are eliminating the 85 per cent and 75 per cent duty rates for motor vehicle,” he said.

“All motor vehicles will attract a duty rate of 60 per cent with the exception of the hybrid and electric vehicle which will continue to attract the rate of 25 per cent.”

He noted that taking in consideration the strict policy of only new vehicle being duty free, that has now also been changed to cars that are three years or younger and will completely ban the importation of wrecked vehicles into the country and cars older than 10 years.

“We are also amending the Tariff Act so that returning residents and this includes student who have been off to school for two consecutive years or Bahamians who have been working abroad for two consecutive years and they and now want to return home,” the minister said.

“They will now have the advantage of being able to bring up to $10,000 of their personal affects and one vehicle valued up to $30,000 duty free.”