2014/2015 Budget Communication
by Senator, The Hon. Allyson Maynard Gibson
As we look to the future, while celebrating the 40th year since Independence, the Government has taken the bold step of presenting a budget in clear terms, using a modern format and indicating targets for the next 3 years.
Bahamians understand budgeting. Families across the length and breadth of The Bahamas budget for the year ahead and keep in mind their goals over the next 3 – 5 years. Companies also budget and project. Countries are no different. The Government of this archipelagic nation, The Bahamas, believes that Bahamians in less populated areas such as Ragged Island, Inagua, Acklins, and Long Island have a right to roads, utilities, docks, airports, schools and clinics – as we do in more populated areas such as New Providence, Abaco and Grand Bahama. This means that we must find the revenue to provide and maintain 20+ airports and harbours and schools and so on, to international standards, on each Island.
In this budget we account for our performance, budget for the upcoming year and project out to the budget year 2016-17.
As I speak I refer to the map of The Bahamas that shows developments in The Bahamas that have either commenced or are about to commence (the purple dots) and infrastructural projects that have commenced or are about to commence (the orange dots). It illustrates opportunities for jobs and businesses – across the entire Bahamas. For example, because of the cruise ship that stops at Acklins weekly, good jobs have been created in Acklins and because money is being spent in Acklins its economy is being stimulated. This story is being repeated in Exuma, San Salvador, Abaco – across The Bahamas. New investments are creating new jobs. NOW. Bahamians have good jobs and have started new businesses that did not exist in 2012. Existing investments and investments coming on stream create the environment for accelerated economic growth – creating more jobs and more businesses – more Bahamians are getting good jobs.
This administration speaks with credibility and confidence. Between 2002-2007 we created 22,000 jobs and we are on track to do it again – even in these challenging economic times.
The Hon. Shane Gibson, the dynamic Minister of Labour and National Insurance has shown that since May 2012 there have been 43,981 NEW NIB registrants. A new registrant means a new job. And from November 2011 to date NIB payments have ceased in for 13,000 people. Cessation of NIB payments means a job lost. This means that since May 2012, 30,000 new jobs have come on stream across The Bahamas. As the developments on the map grow and the spin off effect is experienced in those Islands, we expect thousands more jobs to come on stream. The U.S. regularly publishes statistics showing the new jobs that have been created. This engenders confidence in the economy – people do not invest when they lack confidence in the economy. I want to thank Minister Gibson for so clearly showing us that investors are feeling optimistic about the Bahamian economy. This is good news. All of us should want to encourage even more investment and more economic growth so that even more Bahamians can get good jobs.
Economists say that it takes 18-24 months to see or feel the effect of new government initiatives.
Let’s look at how we found the economy in 2012 and the changes that are happening.
Debt to GDP is an important measure of the strength of an economy. Agencies such as Standard and Poors and Moody’s look at the debt to GDP ratio, amongst other things, in deciding the strength of a country’s economy. If we are downgraded, it will cost the government more to borrow money for important infrastructural and other projects. The Bahamas was downgraded twice during the period 2007-2012. If a family has too much debt, banks think that they are high risk so they either refuse to lend or lend at higher interest rates. Or if someone has no access to credit he might have to decide whether he will eat that week or pay the electricity bill. Governments are no different….