Revenue And Expenditure Rise As Government Set To Borrow $300M

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NASSAU, BAHAMAS – As he delivered his Mid-year Budget Communication, Prime Minister Philip Davis revealed that preliminary expenditure increased for the first six months of the year, but he said it was properly planned for the fiscal year.

Parliamentarians heard that total expenditure was $1.8 billion, an increase of $278.3 million. Today, total expenditure represents 50.9% of the annual budget target. Key spending components include increasing employee compensation, spending on the use of goods and services, government subventions, and more.

Philip Davis – Prime Minister
“Public debt interest payments were higher by $34.3 million and totaled $335.5 million, which represented 51.1 percent of the budget target.”

While expenditure is up, revenue is also up.

The prime minister painted what appears to be an impressive fiscal position at the midyear mark, explaining that total revenue for the first six months is estimated at $1.4 billion, a more than $138 million increase compared to this same time last year. This figure makes up 40.7% of the entire budget target.

Philip Davis – Prime Minister
“This was achieved without any appreciable increase in taxes since this administration came into office. The revenue intake for the first half of this fiscal year stands as the highest revenue level this country has ever experienced for this period.”

Davis attributes this to several factors, including more rigorous collection measures and an increase in revenue yields from new policy methods like business license fees and departure taxes.

Government debt also saw a $451.1 million increase, raising the overall debt to $11.7 billion.

However, at the mid-year mark, Davis tabled a resolution authorizing the finance minister to borrow $300 million to fund national development objectives, including infrastructure development projects.

Parliamentarians heard that the resolution is to borrow the funds at the appropriate time.

Philip Davis – Prime Minister
“The first resolution authorizes the minister of finance to borrow the sum of three hundred million dollars in such currency as the minister may determine. It authorizes the minister to borrow by way of government agreements or line of credit agreements.”

The government is also acting as a guarantor for the University of The Bahamas, which is borrowing $25 million from the Bank of The Bahamas, the Bahamas Technical and Vocational Institute, which is looking to borrow $10 million from BOB, the Water and Sewerage Corporation, which is borrowing $50 million from Scotiabank, and the Public Hospitals Authority, which is borrowing $75 million from CIBC First Caribbean Bank.

This means the government is guaranteeing the funds borrowed will be repaid.