Ingraham TV – PM Presents Budget 2010/11

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What BP through the technical mind of C Allen Johnson has done in presenting the Bahamas Budget online; NO OTHER MEDIA ENTITY in The Bahamas has done. NOT ZNS, NOT CABLE 12 NOT any of the newspapers nor ANY of the online websites. Johnson has placed online FULL real-time archive speeches of the House debate on the 2010/2011 Budget. Students today at a Universities in WALES, Cardiff, New York, Argentina, South Korea, South Africa and Japan can on large screens view, halfway around the world, what Bahamians locally could not see before; THE PARLIAMENT DISPLAYED ONLINE!.

And that Cheshire cat named Carl ‘Undernourished’ Bethel claims we are attack journalists at BP; suggesting are ‘insignificant’ when it comes to making waves in the Bahamas and around the world? Boy, I tell ya! He’s one of those same people who GLORIFIES MEDIOCRITY and attempt to block, stop, censure and halt SUCCESS! He’s a failure! Our Papa had good reason to FIRE HIS YOU_KNOW_WHAT! Bethel has been MOST Neglectful and WUTLESS! He has no shame!

Bahamas Government 2010-2011 Budget Debate – May 26, 2010 from C. Allen Johnson on Vimeo.

Speaking Notes

Wrap-Up Debate of 2010/11 Budget

Mr. Speaker,

As with countries across the globe, this is an austerity budget. It takes account of the severe and crippling impact of a global economic recession which has ruined economic performance in our country as it has around the world.

The Bahamas Government has done and is continuing to do all in our power to cushion and lessen the consequential hardship brought on by this global phenomenon and to ensure that when it ends, as indeed it will, The Bahamas will be in a condition that it can benefit from the turnaround.

I am aware that a significant number of Members Opposite chose to live in a twilight zone in which The Bahamas escapes an economic catastrophe that engulfs the rest of the world.

Those of us who live and work in the real world know that the twilight world is not real.

  • In that twilight zone, the mere signing of heads of agreement however inconceivable, translates into real-time investments and job creation
  • And, in that same twilight zone Government could spend and spend, borrow and borrow without regard to increased public debt and without improving or adding to the national infrastructure.

We live in the real world.

In the real world we have sought, as best we could, to cushion the harsh impact of the economic turmoil upon the Bahamian people even as we acted to ensure that it did not destabilize our fiscal situation.  That is the focus of this austerity budget.

That is why we introduced an unemployment benefit.  Under the NIB scheme some 16,588 individuals benefitted at a cost of some $ 24.88 million.  Not so when unemployment last stood at double digits.

As the scheme moves into a permanent phase on July 1 many more will qualify for benefits under the programme including some who are presently engaged in the Temporary Work Programme.  As Honourable Members are aware, 52 contributions are required to qualify for the unemployment benefit, 13 in the last 26 weeks and 7 in the last 13 weeks.

Also, we funded a temporary employment programme where real jobs were undertaken and real value created in both the public and private sectors by the employment for up to 6 months of some 2326 persons.  Refer to Report on Temporary Employment Programme prepared by the by Ministry of Finance.

We did still more to cushion the impact of the recession.  Since July, 2008 we have:

  • Engaged some 805 persons in our environment enhancement programme
  • Issued 130 bulk waste contracts, employing an estimated additional 260 individuals
  • Issued 155 small maintenance contracts employing approximately 300 additional people.
  • Issued 95 trucking contracts employing an additional 190 persons.

And, we caused the creation of hundreds of construction jobs in a number of necessary capital works:

  • The $50 million dredge of Nassau Harbour
  • The commencement of the $400 million redevelopment and expansion of the LPIA
  • The multimillion New Providence Road Corridor Improvement project
  • The roadwork being undertaken on many of our Family Islands
  • In the construction of the new Sister Patricia Russell Junior High School in Grand Bahama and the Completion of the Anatol Rogers Junior High School in New providence
  • In the repair of hundreds of poorly constructed government subdivision houses and in the re-launch of the construction of Government low and middle income houses
  • In the extensive repair programmes for government operated schools around the country.
  • The construction of two new Government Administrative Complexes at a cost of some $40 million in Freeport and Central Abaco
    In short some $860 million in public sector projects.

And we will create hundreds more jobs as work commences on the reconstruction of Supreme Court premises, and as work continues on the completion of the Magistrates’ Courts Complex, the construction of a new Straw Market on Bay Street, and the preparation of the Queen Elizabeth Sports Centre and associated roadwork to accommodate the new national Stadium now under construction.

Infrastructural Works:

Criticism of the continued road works programme in the face of austerity measures elsewhere is largely uninformed. In the first place, the international lending agencies will in ordinary circumstances make loans available for capital investment which is what the road works are; they do not make such loans available for recurrent expenditure.

The purpose of such loans is to enable the economy by investing in the fixed assets required to sustain it and to permit its growth.  The basic fixed assets which enable an economy – its telecommunications, electricity, water and roadways are the capital investments without which it has no future.  It is for this reason the international funding agencies concerned with economic and national development devote themselves to capital investment loans.

It is for the same reasons that even in the face of the most severe economic circumstances, the capital investment programmes must continue to be pursued, even if at a lower level.  A failure to maintain this investment in the nation’s future will one day be an enormous cost to bear.  And so, while we act to prevent the burden of today’s debt from compromising the future prospects of our nation, we must continue the capital investment which makes a vibrant future possible.

Further, it cannot be ignored that capital investments create employment during the construction phase and sustains employment dependant on sound effective infrastructure.

It is not only road works which must continue during austere economic times but maintenance, repair and replacement of other infrastructure – bridges, airports, docks and ports – as is provided for in this budget and which serves to preserve jobs in both the public and private sectors.

Who Bears the Burden of Public Finance Adjustments?

While most people are agreed that clear action must be taken to ensure the stability of our economy and its ability to respond to recovery in the international global economy, it is not so clear that many of those people are willing to make a needed sacrifice.

Incomes across the public sector were frozen which is a reduction in real incomes of nearly 2 per cent.  Expenditure across the board in the public service was reduced by 2.6% which in real terms is a reduction of more than 4%.

Responsibility Allowance of Senior Public Officers was reduced by 50%. Public Service promotions are frozen and so is Public Service employment except for essential services.  This represents a cost of the Public Finances adjustment.

Some people say we should not cut back while others say we should cut even more.

The measures taken by us in this Budget are intended to correct a fiscal imbalance which if left alone would create an enduring economic crisis of enormous proportions; deny us the ability to effectively respond to subsequent crisis such as a hurricane or recession or other unforeseen event and make expensive borrowing costs and reduce funding for essential public services such as law enforcement, education and health services.

This is not a painless medicine.  It is beyond doubt however, that the alternative is demonstrably worse, and there is no shortage of examples to confirm this – Greece, Spain, or Jamaica.

We think the actions being taken are appropriate for current circumstances.  Should circumstances admit to a change in course we are prepared to do what is right by our economy, our country and our people.

The logical inconsistencies reflected in the contributions of Members Opposite are sometimes more than humourous.  The Member for Ft. Charlotte, for example, dealt vigorously with the need for tax reform and referred to the several public advisors recommending that tax reform be undertaken.

He forgets, however, that tax reform is not a new phenomenon.  The IMF has been recommending it for years.  Indeed, the IMF Report of 2005 advised his Government that “a comprehensive tax reform involving a VAT or sales tax could help sustain revenue and reduce the vulnerability of the economy to external shock”.  The Fund Report went further to say that “the key prerequisites going forward will be a strengthening of the fiscal position to place the debt to GDP on a downward path”.

That was in 2005 when the global economy was performing well.  But the Fund Report that year also observed that “the Authorities have not yet committed themselves to Tax Reform”.   They demitted office in 2007 and had still not committed themselves.  It is amazing to see their level of commitment now that they are out of office.

In the contributions made by Members Opposite they told us many things we did wrong.

Of course, in their eyes we can do nothing right.  They even denied we won the election.

Clearly they mean us no good.  And clearly their hope is if things are bad and people are hurting that would be their ticket to returning to office.

As that is so, why would anyone expect for them to wish for things to be good.  What’s good may be bad for them!

We know that plenty people are hurting.  I come into contact with many such people everyday of my life and they tell me.

I help many; I wish I could, but I can’t help all.  I do the best I can for all.

Is it not more than a point of interest that Members Opposite would not say what they would do had they been here rather than there?

Would they increase the local beer tax by $1?

Would they increase the Departure Tax by $5?

Would they increase real estate transaction taxes by 2%?

Would they increase hotel room taxes by 4%?

Would they increase Road Traffic fees?

If not, what would they increase?

Would they have decreased the Prime Minister’s pay by 16% – $22,250?

And reduce Minister’s pay by 7.3% – $7,000?

When I was Leader of the Opposition I was paid $50,000 only – I received no House Salary. I did that for 5 years.  When the Member for Farm Road and Centreville became Leader of the Opposition he petitioned me to also receive the PM’s salary.  He now makes $78,000 per annum.

The Leader of the Opposition has dramatically proposed that MP’s salary be reduced by double that proposed in this budget?   We must accept that he had the agreement of his Parliamentary Group for this proposal given the vocal objection to any reduction voiced by several of those on his side.

What more would they have done?  How would they demonstrate financial responsibility?

It is especially noteworthy that Members Opposite continued an emergency action initiated by my Government in October 2001 in the immediate aftermath of the events of 9/11 whereby budgetary allocations were reduced by 2% across the board.  And then, rather than removing that reduction during the good economic times they now recall between 2002 and 2007, they increased across the board reduction provision to 5%.   See Memorandum of 28 th October, 2004.

What hurt did these reductions cost?  What forewarning did the public have? And these were supposed to be good times!

It is instructive also that just one week before the General Election in 2007, while budget allocations to Ministries and Departments continued to be subject to a 5% reduction across the board, Members Opposite agreed to extend and require the public continue to pay for health insurance coverage for Ministers and Parliamentarians once they had demitted office.  Our election put an end to that new extravagance.

Then they tell us that they did not increase taxes during their single term in office.  The record does not support that assertion.

In office they increased the business license fee for petty shops, taxi drivers, straw vendors, farmers and fishermen – from $10 to $100 – taxing the little man; the man at the bottom rung of the economic scale.

And the fees for all cargo landing at Prince George Dock, Arawak Cay, Kelly’s Dock, Union Dock, Tropical’s Dock and Sea Board marine were increased.

And fees for recording documents in the Registry of Records were increased as were driver’s licences and franchise fees for franchises.

And fees for birth certificates, police certificates and court filing fees were all increased.

And a fee for import entries for persons registered under the Industries Encouragement Act and the Tariff Act and Business Licence Fees were increased and more!

What would they have done now?

Enquiring minds, as they say, want to know.

The Leader of the Opposition gave an impassioned presentation on the evil of crime and its impact on our community.  And once again he sought to hold up the community policing programme, whose bureaucracy was expanded under his administration, as the only solution to crime in this country.

The Leader of the Opposition appears incapable of accepting that urban renewal and community policing programmes preceded his Party’s election in 2002 and that it continues since his party’s lost in 2007.

I remind Honourable members that the first Urban Renewal Programme dates to the 1980s and an IDB funded programme to rid our inner city of pit latrines and to stimulate the economic wellbeing of residents of the areas.  The Honourable Leader of the Opposition should be well acquainted with these programmes which have focussed on sections of his constituency for thirty years running – not 5 years between 2002 and 2007.

During the 1990s the programme was expanded to include community policing initiatives around New Providence.

No one argues that community renewal is important to addressing social ills in inner-city communities mired in poverty.  But community renewal is not just policing and it is not transforming policeman into social workers.

To be effective it must embrace economic empowerment of the people of our inner city.  That is best done by creating employment opportunities for these people something to which my Government is inextricably dedicated.

We have spent a great deal of time speaking on crime in this place.  We have appointed several blue ribbon committees and Parliamentary Committees to study the problem and to make recommendations.

What we need now is not more speeches and studies but action.  We are doing that – ensuring adequate funding of our police and defence forces to enable them to fulfil their mandates to protect Bahamians and residents in our country, acting to introduce CCTV monitoring of high crime areas, the introduction of electronic monitoring for certain individuals released on bail, increasing the number of supreme court justices available to deal with the backlog in criminal cases, providing modern accommodation for magistrates courts and supreme courts, restructuring the Bahamas technical and vocational Institute so that its programmes more closely align with the needs of our economy, continuing and focussing attention on non-violent settlement of disputes among persons – especially young persons, many still of school age.

I was neither surprised nor disappointed in the contribution of some members opposite such as Fort Charlotte, North Andros and the Berries and Cat Island, San Salvador and Rum Cay for they are principals in the twilight zone.  And as for MICAL and St. Thomas More – well what can you expect?

I was surprised to hear a former Minister of Tourism and Member of Parliament for West Grand Bahama and Bimini saying that we should suspend the promotional payments to Kerzner International, a viable and successful company and the largest private employer in The Bahamas employing 8,000 Bahamians and indirectly supporting thousands of Bahamian families. In fact, in the same speech, the former Minister congratulates Kerzner for making an additional $100 million investment that will employ an additional 400 Bahamians during these very difficult times.

Indeed, the contributions of Kerzner International to the Bahamian Economy and it philanthropy to Bahamian charities, community organizations and the like is well known to the Bahamian public and certainly to Members Opposite.  See list of Kerzner Contributions

I was especially surprised by the Member for West End and Bimini’s contribution because on his watch as Minister of Tourism he agreed to the inclusion in the new Heads of Agreement concluded between the Government and Kerzner International the provision for a new commitment for the Government to contribute $20 million in promotional support over a 5 year period.  Then in 2004, while he was still Minister of Tourism, he and his Cabinet colleagues agreed to further extend that promotional support to 8 years.

I have no recollection of the Member for West End and Bimini ever opposing those provisions, or ever proposing that they be suspended notwithstanding that the very same charities for which he now expresses sympathy and support were in need of increased financial support.

He did not suspend the agreements because he knew and had seen the kinds of marketing partnerships that the Ministry of Tourism and Kerzner developed through the years that have resulted in broadening The Bahamas’ tourism market, taking it even more upscale and maintaining and growing employment of Bahamians.

The Member would also know that in December 2002 his government signed an $8.9 million marketing agreement for the 236 rooms for Club Med on San Salvador.

Compare that, Mr Speaker, to the more than 3,500 rooms at Atlantis. Which agreement is better value for money? His suggestion is nothing short of pure hypocrisy and grandstanding.

Eleuthera Club Med…See Dec 2002 Heads of Agreement.

Further still, he knows that not only did he and his colleagues keep the Kerzner agreement in place and signed a multi-million dollar agreement with Club Med, he also knows but perhaps would prefer to forget that he also extended more than $6 million dollars in subsidies to the Royal Oasis Resort & Casino in an abysmally failed attempt to keep that property open.

The Royal Oasis is now closed and it closed during what he describes as a robust economy throwing over one thousand two hundred and seventy Grand Bahamians out of their jobs.

The former Minister also suggests that Bahamasair should become a major player in the tourism sector.

Well, he was Minister of Tourism and the Minister responsible for Bahamasair … his two principal Cabinet responsibilities.

He was better positioned than any other Minister in recent times to make his suggestion happen. But his words are so typical of members of the “late again” opposition. They demonstrate everyday to the Bahamian people that they have no capacity to govern. They have no capacity to do while in office. They only have the capacity to suggest even when they are in government.

Did he suggest to himself that Bahamasair in his left hand should become a major player in tourism in his right hand? All he had to do was bring his two hands together to make Bahamasair a major player in tourism but alas, he was late again. He will tell you that he suggested that. He will also tell you that he suggested the Royal Oasis remain open. They are now full of suggestions but “late again” in implementation.

Mr. Speaker:

Several Members Opposite resurrected their baseless allegation that my Government stopped, reviewed and cancelled projects which they had approved and which were underway at the time of the last election.

I suppose they were referring once again to the $20 billion dollars of direct foreign investment which they had brought to our country during their 5 year term.  We tried, but hard as we looked we could never find those $20 billion of investment.  The evidence of that investment must be in that same special twilight zone in which jobs are created by the government and social benefits increased without increasing public debt or undertaking capital works.

We did find a number of Heads of Agreements completed by them; many were never brought to this place.  I suppose they didn’t consider it politically wise to reveal what they were planning to do through those agreements – which was to simply approve billions of dollars in land sales to international persons for residential purposes.

Apart from the agreement facilitating concessions for Phase III of Kerzner’s resort development on Paradise Island, the Abaco Club and Albany development, we never found evidence of billions of dollars in investments they are so fond of recalling.

We all know what has become of the GINN development in West Grand Bahama.  Similarly, what became of the I Group (EGI) proposal to create a new centre of employment to rival Grand Bahama in Mayaguana?

The development at South Ocean has similarly failed to materialize.  Promises of a marina development at the Hilton didn’t materialize.

Honourable Members will recall that it was left to us to complete the land transfers for Baker’s Bay and the land swap required to permit the start-up of Albany development.

We also had to complete the Heads of Agreement which they were unable to close with Bahamar.  And regrettably, that development has not yet completed negotiations on its funding arrangements.

None of these agreements were stopped, reviewed or cancelled by us.  If anything we facilitated their moving ahead.  Most did not – not as a result of anything we did but as a result of the reality of a global economy in trouble.  Perhaps they had been too ambitious.  More likely, they got caught up in the property hype that eventually triggered a meltdown in the US economy.

There were many other projects that Members Opposite claim to have been “money in the bank” and job creators – the Gold Rock Creek Enterprise in Grand Bahama; Eleuthera Properties Limited; Montana Holdings in Rum Cay;  Pittstown Point Landings; RC Rose Island development; the Royal Island development and the list goes on.

Did we cancel one of these projects?  Of course not!

We did stop some wasteful proposed projects advanced by Members Opposite in the closing days and weeks of their single term in office in a futile effort to convince the Bahamian people that they did in fact put the people first.

Capital Projects:

Some Members Opposite now chose to recommend that we not proceed with important capital works and instead direct funding to more direct assistance to individuals.

This notwithstanding the Leader of the Opposition’s efforts this morning to cast the capital works programme of my Government as a belated continuation of his Government’s plans.  Indeed, he now claims to have been the father of plans for a new terminal for the Marsh Harbour International Airport.  He would have us believe that his minister did not find those plans in train at the Ministry of Public Works.  Well Abaco knows better than that!

I want to remind Honourable Members that agreeing to award contracts for capital works but failing to make budgetary provision to carry out such programmes is not sound planning.  But it is an old habit of Members Opposite.

A Government which has built no new school in nearly 5 years suddenly decided beginning about 9 months before its term was coming to an end to build new million dollar schools in Inagua, Acklins, New Providence and Abaco!  (Conversation in the Church of God)

Among the 2007 general election motivated actions of Members Opposite was the agreement on 17th April, 2007 to conclude contracts to build a $4.2 million school in Central Andros, the construction of another primary school in Lowe Sound, Andros at the cost of $3.9 million and the Heritage School in Grand Bahama for $10.5 million.  All these projects approved but no evidence of budgetary provision to cover same!

We are aware of the important role of public capital investment in stimulating the economy.  That is why we chose, wisely I believe, to continue to accelerate a number of capital investments meant to modernize our country, bolster our principle industry – tourism, sustain and maintain our government-operated school system and create needed employment in the construction sector.  And, we have made budgetary provision for each.

Arawak Cay Port   $ 70 million

Electronic Monitoring

Programme     $ 1 million

Supreme Court     $12 million plus $7.5 million

Nassau Straw Market   $7.9 million

CDB Projects    $ 47,109 million

Country-wide Road work  $19 million

Queen Elizabeth

Sports Centre    $15 million

NP Road Corridor

Improvement Project   $40.80 million

Education      $17.2 million plus $3.1 million

          • for T.G. Glover School

European Union Projects  $9.8 million

Radar ASR (??)     $1 million

Public Hospital Authority  $3.5 million

LPIA Redevelopment   $400 million

Mr. Speaker:

We are doing what we must do for the good of the Bahamas economy and the good of the Bahamian people.  Those who love The Bahamas and who love the Bahamian people would have us do no less.

Examples abound both regionally and internationally of responsible governments taking similar if not the same actions as we propose in this Budget.

In the UK Ministers and parliamentarians have had their salaries decreased, a civil service hiring freeze has been put in place and benefits previously available to Ministers, Parliamentarians and public officers are being scaled back.  (E.g. Ministers are being encouraged to use public transportation and to use cars from a pool when necessary).

In Italy public sector hiring and public sector salaries have been frozen for three years.  Spain has reduced public servant salaries by 5% and law makers will take a 10% pay cut. In Germany, steep spending cuts by the government could not starve off the layoff of several thousand public sector employees.  Similar cost reducing action is being taken by the governments of Portugal and Finland.

In Canada salaries of Parliamentarians and Ministers have been frozen and the civil service is expected to follow suit.

In New York state workers are being required to take a day of unpaid leave.  States across that country – from Florida to California are initiating cost-saving initiatives ranging from reducing investigations of certain levels of crime, to reducing overtime payment allocations to hiring freezes and possible job reductions.

Mr. Speaker:

In failing to appreciate the essential focus of this extraordinary budget, Members Opposite have criticised it for not presenting a five or ten-year plan for agriculture, or a Master Plan for unemployment or for financial services or such.  One could be forgiven for asking if they ever presented such a budget; but the purpose of this budget is as we have said throughout: to address the consequences of a global economic eruption – to ease its impact on our people and to cushion their pain; and to ensure that it does not destabilize our fiscal situation and so prevent our participation in the economic growth when normal returns.

Revenue Measures and amendments:

    1. Stamp Act
    2. Spirits and Beer Act
    3. Traffic Act
    4. Road Traffic Regulation
    5. Passenger Tax Act

6      Industries Encouragement Act.

Finally, Mr. Speaker, I say to the Bahamian people as 16th century Italian author and playwright said:

“I love you, and because I love you, I would sooner have you hate me for telling you the truth than love me for telling you lies”

Mr. Speaker,

Honourable Members are aware that the tenure of the President of the College of The Bahamas, Mrs. Janyn Hodder coincides with the end of this semester.

President Hodder has contributed immensely to the growth and development of the College. Her name will long be associated with the College and with its important role in the development of our country.

I have no doubt that the legacy of President Hodder will be her untiring efforts in preparing that institution for its eventual transition to University status.  Without a doubt her accomplishments at the College will stand and future generations will recall her achievement and our nation will be better for the time, though all too short, spent by her at the College.

10 June, 2010