Bahamians Under Pressure
By IANTHIA SMITH:
From as little as shelling out more money at an Automatic Teller Machine (ATM) to as high as coughing up additional thousands of dollars in stamp taxes on a dwelling home or property, beginning today, Bahamians will have to put a tighter squeeze on their wallets to keep their heads above water.
Today marks the start of the 2010/2011 fiscal period, a 12-month roadmap that ushers in a rash of budget cuts, higher taxes, a freeze on hiring and promotions and in some cases, salary decreases.
But despite the firestorm of criticism that has followed the $1.8 billion budget since its introduction in Parliament several weeks ago, Prime Minister Hubert Ingraham has maintained that it is the best the government could have done under the present economic climate.
However, the Progressive Liberal Party (PLP) would tell you an entirely different story.
The Opposition argues that a part from the global economic downturn, the government’s poor fiscal management has much to do with what the country is now up against – mounting expenses and little revenue.
"This is one of the worse (budgets) for all Bahamians. The budget communication does nothing to critically address this critical and urgent need which continues to have far reaching economic, social behavioural consequences for the people of The Bahamas," Opposition Leader Perry Christie told members of the media at the time.
"This is a tax and pain budget. It is the prime minister singing a sad story as he describes the problems, but without any ideas about how to grow us out of this crisis and without accepting any responsibility for the state we are in under his stewardship."
But according to Prime Minister Ingraham, in order to bring relief to the country, the government had to make some tough decisions and the majority of those decisions come into play today.
These include stamp tax on realty transactions that have been increased by two percentage points. Stamp tax on bank transactions have been hiked by 15 cents and the air and sea departure taxes have jumped by $5.
In the case of cruise ships, the increase takes effect October 1.
Starting today, hotel room taxes will jump by 10 per cent of the room rate, while the annual fees payable by retail banks have increased by a whopping 50 per cent.
Car licensing fees, the rates on spirit and beer manufacturing and fees under the International Business Companies Act also went up.
If all went as planned, New Providence residents would have also had to shell out money for garbage collection services beginning today.
However, negotiations for the privatisation of solid waste management stalled.
With the increase in taxes, came dips in salaries and ministerial portfolios.
Freezes were even placed on hiring and promotions in the public sector, except for essential services, like police and defence force officers, teachers and nurses.
Budget allocations for the majority of ministries and departments took a nosedive.
The government has allocated some $1.55 billion for recurrent expenditure and more than $265 million for capital expenditure.
But as bad as it might seem, the Ingraham administration is not alone in trying to restore the country’s ravaged public finances over the next 12 months.
Countries like the United States, Germany and Britain have also made drastic cuts across the board.
In an "emergency budget" Britain’s Treasury chief George Osbourne unveiled "the toughest cuts to public spending in decades, which saw welfare payments and spending programmes slashed.
Mr. Osbourne said the austerity package was necessary to make "quick cuts to crippling national debts racked up during the global financial crisis.
July 1st, 2010
jonesbahamas
A political blog about Bahamian politics in The Bahamas, Bahamian Politicans - and the entire Bahamas political lot. Bahamian Blogger Dennis Dames keeps you updated on the political news and views throughout the islands of The Bahamas without fear or favor. Bahamian Politicians and the Bahamian Political Arena: Updates one Post at a time on Bahamas Politics and Bahamas Politicans; and their local, regional and international policies and perspectives.