The time is past urgent for the current administration to be up and doing with efforts designed to make the nation’s tax system more equitable. In addition, there is no doubt at all that the time is also past urgent for the government and people of the Bahamas to understand that each and every able and willing Bahamian must be dragooned into jobs and activities aimed at increasing productivity.
Some of the newest ‘knowledge’ going the rounds in business and other related circles is to the effect that, “…the Bahamas would be unable to use GDP growth to ease its way out of the current fiscal predicament…” this according to former Minister of State for Finance, James Smith. As this financial expert concludes, “It’s not going to be possible. You’d like to do that, but you’re faced with challenges. In major markets, particularly the US, expenditure patterns are likely to change.
You’re not going to have people spending the same money on travel, and in the Bahamas, you may not get the same spending even if you get the same visitor numbers…That has to do with the nature of the market, the competitiveness of tourism. It’s the weakness of small island developing states coming home to roost.” Clearly, then, this is a day of reckoning!
No effort aimed at boosting government’s revenues can work if the method chosen does not take into consideration the fact that some of government’s current levies are unfair; thus the people’s strike against them. The conclusion therefore beckons that the introduction of a value added tax will amount for little if collateral efforts are not taken to make the overall economy more productive.
There are today any number of distressed Bahamians who now find themselves in over their heads. They are mired in debt. There are today tens of thousands of Bahamians for whom the Bahamian Dream is fading fast.
In this cloud of people are to be found men and women whose properties are in distress; whose bills mounting –and who are trying to find work commensurate to their education, training and experience.
For quite a while now, we have railed at fiscal policies that seemed hell-bent on piling debt upon debt. When that was apparently not enough – we would routinely lament the failure of this or that public institution. For quite a long while, we would look askance as one administration after the other acted as if the nation’s money-spigot would –once tuned in and turned on – would spew money. Those days are gone. In their path, we find crime on the rise; social distress trending upward and a population of angry people seemingly at odds with an administration they so recently elected. This is par for the cause in a land where practically everything its people consume is imported. In that same land, export of services remains the one true source for most of the foreign exchange it requires: thus all those references we have made to what the economists describe as the fiscal crisis of the state. Things are not only tough for the Government of the Commonwealth of The Bahamas, but also for most so-called ‘ordinary’ Bahamians.
This is surely part and parcel of developments in the past five years that have struck the Bahamian people so very hard. Indeed, they now reel not only at the hammer blows inflicted by a world-economy over which they have little to no real control; but also cower under the shadow of impending blows as those who govern do their level-best to cope with this nation’s burgeoning debt.
Tragically, there is so very little room for maneuver available for this brand new administration. This because on the morrow of their electoral victory, many who fought the good fight realized that what they had captured seemed like little more than a poisoned chalice. And so try as they might, the new team and their leader are caught in the coils of a dilemma. While they need to bring in more money in order to keep things in their current state, they are also realizing that nothing big is on the immediate horizon. This is precisely where the so-called rubber meets the road. That is why we remain leery of any new proposal for change which seems premised on the creation and establishment of yet again one other bureau – as in the case of the proposed Value Added Tax proposal – supposedly directed at instigating some newly-minted transformation.
