After a five hour delay, Prime Minister Perry Christie during his contribution to the Budget Communication announced that expenditure provisions in the 2003/2004 Budget, amounts to over $1.2 billion or roughly 20 per cent of the Gross Domestic Product.
The overall recurrent expenditure is $1,062 million, an increase of $27 million or 2.6 per cent over the provisions made in 2002/03. However, $189 million is required for interest and redemption of government debts. This provision, he said, comprises of 18 per cent of Recurrent Expenditure in 2003/2004 and is also an increase of $15 million over 2002/03, even though interest rates remain low.
“It is evident that control over fiscal deficits and borrowing are crucial if The Bahamas wants to avoid spending a rising proportion of its revenues on debt service. The way to controlling deficits and borrowing is to contain expenditure and collect revenues,” advised the Prime Minister.
The Prime Minister also informed that in 2002/03, the government debt was about 36.5 per cent of the GDP and the project GFS Deficit for 2003/2004 will raise this by 2.2 per cent to 38.7 per cent. He warned however that this figure of 38.7 per cent is an important indicator, because based on world-wide experience, the International Monetary Fund (IMF) in various publications, warns that the ratio government debt greater than 40 per cent runs increasing risks of releasing debt dynamics, especially if there is no major adverse external developments.
“Therefore, in the case of The Bahamas, we must take care to ensure that we do not cross this 40 per cent threshold,” he said.
Meanwhile, the breakdown of the 2003/2004 Budget were as follows:
* $191 million – Education and training
* $161 million – Health Services plus fees retained by the Public Hospital Authority
* $131 million – Security. $84 million for the Police, $29 million for the Defence Force and $14.2 million for Prisons.
* Over $79 million – Foreign Affairs and the Public Service.
* $73 million – Ministry of Tourism
* $79 million – Ministry of Foreign Affairs
* $45 million – Ministry of Finance
* $20 million – Customs
* $36 million – Transport
* $32 million – Agriculture, Fisheries and Local Government
* $26 million – Social Services
* $22 million -Works for maintaining public buildings and other works
* $16 million – Labour and Immigration
* $13 million ﾖ Justice Related Heads
* $9 million ﾖ Youth, Sports and Culture
* $8 million ﾖ Office of the Attorney General
* $5 million ﾖ Ministry of Financial Services and Investments
* $4 million ﾖ Ministry of Trade and Industry
* $2 million ﾖ Department of Lands and Surveys
* $2 million ﾖ Office of the Auditor General
* $2 million – Housing and National Insurance
Other provisions, according to the Prime Minster, are for the Governor General and staff, the Senate, House of Assembly, the Office of the Prime Minister, The Cabinet Office, The Bahamas Information Services, Government Printing and the Public Utilities Commission.
The provision for the government’s Capital Expenditure stands at $145 million. The biggest single provision is for Works, where $53 million was allocated.
*$20 million will be spent on educational facilities
*$12 million on capital works by the Ministry of Health
*$2 million for Housing
*$10 million for Bahamasair
*$8 million for the Water & Sewerage Corporation
*$4 million for the Broadcasting Corporation of The Bahamas
*$5 million for Inter-American Development Bank package for Haiti
The Prime Minister said there was one particular area of capital expenditure that merited special attention, which included the provision being made for the construction of the major permanent base in Inagua, including the construction of a detention center to deal with illegal immigrants and smuggling.
The Prime Minister also said that the provisions are generally framed on the basis that, given the relatively tepid global recovery, it would be better to include affordable provisions, which are certain to be financed, than to include ambitious provisions that run the risk of being curtailed once the financial year begins.
Large sums of money are being placed at the disposal of the various agencies of government in this budget, as “throwing” more money at problems would not be the solution to accelerating progress, said Mr. Christie.
“Indeed, the careful and prudent management of the limited resources which we have, is by far the more prudent approach,” he said.
Meanwhile, the Prime Minister said that he has not doubt that voices will be raised, stating that the government should be doing more in various areas and sections. He added that the government would, if it could, but added that there is a revenue constraint in an uncertain global environment. Mr. Christie said as this constraint loosens, which would occur over the coming months, the government would have more resources to devote to the programmes and projects promised in its Our Plan document.
“As I have said repeatedly, it is pointless and futile to criticize this budget on the basis that more should be done for some area of the public expenditure. Unless one can show how the additional resources will be obtained to meet the costs involved, that approach is futile,” he said.
By Tamara McKenzie, The Nassau Guardian
