On Wednesday the 26th of May, the Prime Minister unveiled his budget for the year 2010-2011. What is noteworthy and apparently not newsworthy enough for the mainstream press or worth talking about on the talk shows, is the fact that the FNM’s 2009-2010 budget held the record for the largest tax increase in Bahamian history. So what does the Prime Minister bless us with in the 2010-11 budget? Another tax increase that is larger than the one in 2009, with the added blessings of salary freezes, cuts in the civil service salaries and the eventual cut back in government services among other things.
Had the Bahamas had a functioning, non partisan media, questions would have been raised as to how we got to this point. It’s as if the Minister of Finance, Hubert Ingraham, just realized that there is a recession in 2009 when it started from 2007. And now 3 years into the deepest recession since the depression taxes are raised to unseen proportions, the credit worthiness of the country has been downgraded and the IMF and the IDB are expressing concern about the level of debt being incurred by this FNM administration.
But no one in the media sees anything wrong with this? No one is asking why the cutting back now and not from 2007-08 or even the 2008-09 budget when the recession began and was acknowledged?
Bahamas Press, I submit to you, that the actions that the Prime Minister and Minister of Finance is taking now in the 2010-11 budget is an admission of MISCALCULATION of the finances of the Bahamas during this recessionary period going back to the 2007-08 budget.
I don’t think most Bahamians understand what is transpiring. The Prime Minister and Minister of Finance is admitting in this budget that the Government of the Bahamas is broke; the Government of the Bahamas can’t pay its bills under HIS watch. He won’t admit publicly that the financial institutions that the government borrows from have told him to get the Bahamas’ financial house in order or the tap will be cut off!
In the 2007 and 2008 budget, the Prime Minister obviously operated under the assumption that the recession wouldn’t be a deep or long lasting one and by the beginning of 2009, the recession would be over and the US economy would be on the upswing. That’s the only way I can explain the level of borrowing the last 2 years.
What a miscalculation. All of the worldwide economic data suggested that the recession that started in 2007, was going to be deep. Even the former Prime Minister warned him in 2007 about the threat of a deepening recession, but for some reason the Prime Minister stopped awarded contracts, cancelled approved projects and borrowed like a junglist who found a credit card over the next two years.
This is what is so tragic, Mr Ingraham operated under no foresight! He acted as if his assumptions were fact! It wasn’t until the 2009-10 budget that the Prime Minister started cutting back and raising taxes; a full 19 months into the recession. Where was he living during that time?
These Greece-like measures taken in this 2010-11 budget is an admission that he misread just how bad things were around the world. The Prime Minister of the Bahamas chose not to recognize the depth of the world wide recession and how those realities would affect his country for almost 2 years. Why is no one questioning his bad decisions? Why is the media so silent?
I would love to know who was giving HAI advice over the last 3 years regarding the economy of the Bahamas? Over the last 3 years we saw and read all the reports from other countries about how they had to cut back. Why is it that in year 3 of the recession that the Bahamas is just making serious cuts now? Why isn’t no one asking how is it that the Ministry of Finance in their 2007-08 and 2008-09 budget numbers were so off? Their wrong numbers lead to massive budget short falls the last 2 years! Where were they living during those 2 years?
Why isn’t this news worthy? Someone at that Ministry of Finance fell asleep and should be held accountable. The world wide economy was heading into a wall and rather than slowly cut back the first two years of the recession, the Ingraham government went on a borrowing spree, borrowing from Peter to pay Paul and then we asked Paul to lend us what we just gave him back!
The Prime Minister failed epically in handling the country’s finances over the last 3 years. The national debt is approaching $4 billion. That’s $11,428 of debt per Bahamian citizen in a country of 350,000. In all likelihood the national debt will surpass $4 billion by the end of the Hubert Ingraham administration in 2012. And what do we have to show for all that borrowed money? Nothing! The street lights are not working, the roads a filled with holes and the infrastructure nationwide is crumbling. Where did all that money go? I will tell you. A good chunk of it went to pay government salaries and to service debt.
Hubert Ingraham was in la la land the last 2 years that’s why the cuts he is proposing is so drastic and the increase in taxes are so shocking. He is trying to correct his mistakes. The FNM miscalculated the depth of the recession and had Mr Ingraham accept the fact that his assumptions were wrong about the recession and taken steps, at the very least 2 years ago, those cuts and increase in taxes in the 2010-11 budget wouldn’t have to be so drastic.
The uptick in the US economy is good news, but it’s a year late. Hubert Ingraham handled this entire recession as if he was expecting the US economy to rebound in late 2009 and pick up steam in 2010. Considering that it takes 12-18 months for the effects of the US rebound to be felt in the Bahamian economy, that would mean that he could call an election in late 2011 or early 2012, right about the time when the Bahamian economy would begin feeling the positive effects of the US economy on the upswing.
But what Mr Ingraham didn’t calculate was the depth of the recession and to make matters worse, he didn’t adjust his attitude at all in the 2008-09 budget. Now Greece’s debt is complicating things even more on the global financial stage!
It just amazes me how almost no one of stature (except Bahamas Press and Rick Lowe) isn’t calling out the Prime Minister for his bad handling of the Bahamian economy during this recession. He and his government totally ignored all the warning signs and now the middle class is about to get screwed and burdened with heavy taxes!
But this isn’t the first time he has borrowed like a junglist who found a credit card! In Mr Ingraham’s first two terms in office, the world experienced an economic boom like never before in the mid to late 90’s and guess what Hubert Alexander was did? Amidst all that worldwide wealth, he borrowed and borrowed! At the end of his two terms, he had borrowed more money in 10 years than the entire 25 years of the Pindling Administration.
Bahamas Press brace yourself. If you thought things are expensive now, watch the prices soar after July 1st.
WE NEED CHANGE!