Making a startling announcement in the House of Assembly in a lengthy 2018/2019 Budget Communication yesterday,  Deputy Prime Minister and Minister of Finance, K. Peter Turnquest said that “the country’s bond rating is at junk status.”

In defense of his government’s decision to hike the VAT rate, he charged that the Minnis administration could do as those before and present a misleading budget with under-budgeted allocations and hidden obligations, and that it could have kicked the can down the road and borrowed some more – delaying the inevitable day of reckoning.

However, according to the minister, playing such a game would have only made a bad situation worse. 

“The country’s bond rating is at junk status,” he said.

“The reason for that is because others before us failed to act promptly and judiciously. 

“But worse than the junk status, the penalty for inaction is a continued quickening crawl toward a fiscal point of no return.  

“And as we have seen, when countries hit crisis mode, the path to correction is extraordinarily hard and painful.”

This blow to taxpayers comes as the government still has to pay off $360 million in arrears, which it hopes to pay off in the next three years.

“With the implementation of this three-year fiscal strategy, the mandated deficit targets will be fully met in 2018/19 and the two following years,” he said.

“The end result will be a balanced budget after three years with some $100 million in duty and excise tax reductions, bringing down the cost of imported goods.”

The government has committed that at the end of it, it’ll return the favour so to speak to taxpayers.

“We make the commitment as well that, as the hundreds of millions of old arrears and obligations are finally paid off over the next three years, the government will then give back to consumers in the form of customs duty and excise tax reductions, on the order of $100 million, to the benefit of Bahamians throughout the country,” the DPM said.

“With the implementation of this three-year fiscal strategy, the mandated deficit targets will be fully met in 2018/2019 and the two following years. 

“The end result will be a balanced budget after three years with some $100 million in duty and excise tax reductions, bringing down the cost of imported goods.”