THE Free National Movement yesterday expressed concern about the Bahamian economy and the management of the country’s fiscal affairs.
The opposition also repeated calls for the government to come to the Bahamian people with a strong and definitive plan to counter the effects of inflation and to execute a credible and robust fiscal and economic plan.
“As reported by the Central Bank and the Bahamas National Statistical Institute, the country is facing a historically high inflation rate that is creating significant hardship for Bahamian families, especially working families on a fixed income,” the party said in a statement.
Regarding inflation, the FNM said Bahamians have seen how other governments in the Caribbean and around the world have taken prompt and effective steps to reduce the impact of inflation.
“Governments have temporarily capped or eliminated gasoline taxes. They have expanded the list of VAT-free products. They have provided even more vouchers and help for working families and businesses.
“The Davis administration has been twiddling its thumbs, just now finally realising this week that it ought to consider a tax break on gasoline when we in the FNM had recommended this same thing and much more months ago. When we made the recommendation they claimed that it couldn’t be done. Now that gas prices have finally started to come down, they just now realise that Bahamians need a break on fuel tax to combat the massive spike.
“They must explain to the Bahamian people how they can now consider a reduction on VAT on gas, but refuse to do the right thing and eliminate VAT on bread basket items and medicines given how the prices of these essential items have shot up due to inflation? When will the Davis administration finally accept that - as other countries have done - that it is critical to remove VAT on essential items in order to protect struggling families throughout the country?
“Further, we once again call on the government to announce the dates for the annual Back to School VAT holiday that was started by the FNM. Working parents will need the savings even more now that the prices of virtually everything have gone up. If you will take VAT off gasoline, do the same for breadbasket items and medication. Provide assistance to struggling small businesses through the Small Business Development Centre or the one-time purchase of inventory VAT free.
“We hasten to point out that the FNM believes in fiscal responsibility. Thus all of these necessary tax relief measures must be paid for through additional revenue measures or reduced spending. Thus to cover the cut in the gasoline tax and the elimination of VAT on essential items, we call on the government to put back in place the 12 percent VAT on real estate over $2 million, when that tax cut only benefited wealthy Bahamians and foreigners.
“The government should also postpone its current illegal tax cut on yachts for the wealthy until this can be properly done through the Budget process. Further, the government should eliminate the $4m increase in the international travel budget, radically reduce the $30m allocation for consultants, and scale back planned spending for events, entertainment, and other non-essential items.
“The Davis administration must give priority to helping struggling Bahamian families deal with inflation.”
The FNM further spoke to The Bahamas’ international bonds - Series 09/29 and series 20/32 - saying they were in the midst of a historic price collapse as reported on the website of the Frankfurt stock exchange.
“The 20/32 series are trading today (August 5, 2022) at 57 cents on the dollar and the 09/29 series is trading at 52 cents on the dollar. The latter is now down by more than 50 percent from last year and both bond series have trended steadily downward over the last 52 weeks, erasing close to half their value.
“Why is this occurring and what effects will this have on The Bahamas? The government must bring focus on this troubling occurrence.
“The government must heed constant advice to bring to Parliament a credible medium-term fiscal plan that ensures expenditure restraint and a defined flow of enhanced revenue inflows. The extravagant spending on travel, entertainment, and events must be curtailed, and the engagement of consultants and new staff must be kept strictly to a limited number of priority areas. The government must articulate a coherent tax reform plan and must bring the same to the public for a full consultation.”
The Opposition said it recognised the gravity of this situation and stands ready to support the government in any credible and consultative effort to address what has become a critical issue for the country.