Statement by Honourable Philip Brave Davis
Leader of the Opposition
On the Grand Bahama (Port Area) Extension of Tax Exemptions Bill, 2017
11th December 2017
The PLP will oppose the wholesale repeal of the Grand Bahama (Port Area) Investment Incentives Act passed by the Parliament in 2016 which the FNM promises to do as early as this month. The FNM’s wholesale repeal of the Act will take us back to the pre-1967 era in Freeport when the Grand Bahama Port Authority was lord of all they surveyed. Our view is that era is gone. The Bahamas has moved beyond it. The Bahamas has given up too much tax revenue under the various exemptions without any check on whether or not the exemptions granted match the promises of the Grand Bahama Port Authority. We cannot support what the FNM intends to do. The Bahamian people must get either the tax revenue forgone or get value for the exemptions given.
In the speech from the throne, The Free National Movement foreshadowed its intent to repeal the Grand Bahama (Port Area) Investment Incentives Bill, 2016. A few weeks ago, the Grand Bahama Port Tax Extension Exemption Bill, 2017 was laid in parliament; and with it the resolve of the government to debate and pass it before the end of 2017, was made clear.
The expiration of the tax exemptions, granted under the Hawksbill Creek Agreement, provided the opportunity for a momentous paradigm shift that would have increased the ease of doing business in Freeport, and would have resulted in a sustained economic recovery that would have benefited the people of Grand Bahama. The Progressive Liberal Party recognized this, and sought to capitalize on the expiring tax concessions, by introducing a suitable framework for property taxes and business licenses that would have ensured economic growth, and would have contributed, along with other appropriate measures, to the enhancement of the government’s revenue base.
At the conclusion of extensive negotiations, a comprehensive Memorandum of Understanding (MOU) was signed on 26th of April 2016, between the Government, the Grand Bahama Port Authority, and the Hutchison Group of Companies; which granted a further extension of tax concessions for an additional twenty (20) years, in exchange for more than five hundred million dollars ($500,000,000.00) of economic development, as well as policy changes to modernize the free trade zone, the removal of the port exclusivity agreement to make way for the Carnival Cruise Port, and the return of large parcels of undeveloped land, back into the hands of the Bahamian people, after more than 60 years.
Besides the requirement to apply and pay a one hundred dollar ($100.00) processing fee, the Grand Bahama Investment Incentive Act, 2016, did not disadvantage any Bahamian investor or port licensee. Rather, its main focus was to bring about a paradigm shift in the management of the free trade zone, to encourage licensees and developers to fully benefit from the government’s performance-based concessions, and to simultaneously weed out rogue investors, who have, and will continue to use the benefits in the free trade zone to their own advantage.
The Free National Movement and The Progressive Liberal Party now have fundamentally different policy positions on the issue. The present government supports a policy position that excludes Bahamians, allows principal licensee stakeholders to benefit from exemptions and concessions without any developmental contributions to the economy of Grand Bahama; while The Progressive Liberal Party had created a new economic development framework designed to stimulate and sustain growth in Grand Bahama.
By repealing the Grand Bahama Investment Incentive Act, 2016 the Free National Movement will disregard more than two years of hard work by international consultants, as well as the bipartisan Hawksbill Creek Review Committee led by Dr. Marcus Bethel and which included former FNM Minister Maurice Moore; and ultimately reverse all of the progress that our administration made to spur development in Freeport, as well as East and West Grand Bahama. History will reflect, that once again, the FNM is about to squander another golden opportunity to create an environment that will spur economic activity in Grand Bahama, and to advance policies and initiatives that will benefit the people of Grand Bahama.