Friday, June 8, 2012
Friday, June 8, 2012
The state of the economy and of government finances, although challenging, will not deter the government from its commitments made to the Bahamian people, nor cause it to backtrack on any of those commitments, Minister of State in the Ministry of Finance Michael Halkitis said this week.
“The state of our public finances will require us to work harder, work smarter and will cause to awaken all of our creative energies to maximize the effectiveness of our limited resources in tackling the problems facing our nation,” he said.
Halkitis made the remarks during his contribution to the 2012/13 budget debate June 6.
He added that it would also require the marshalling of the collective intellect, experience and innovative capacity of all Bahamians who are interest in building their nation.
Halkitis said the government has to move “prudently and sensibly” from a fiscal perspective in implementing its commitments.
He explained that at $1,821 million, Recurrent Expenditure is up by $114 million from 2011/12, but fully $55 million of that increase is accounted for by increased requirements for debt redemption, from $66 million in 2011/12 to $120 million in 2012/13.
This is an addition to the carryovers that include salary increases, insurance and other benefits.
Minister Halkitis said that the government has nonetheless initiated action within these very tight constraints and have placed particular focus on its commitments for the first 100 days of its mandate.
“As indicated in the budget documentation, we have already created a new Ministry for Grand Bahama that has immediately begun the process of addressing the critical issues impeding the restoration of that island’s economy.”
“An initial allocation of $3.2 million has been made to that Ministry and, as was stated in the [Budget] Communication, the organization and budget of that Ministry will evolve and grow in line with the evolution of the transformation process which it will lead.”
Halkitis noted that as a first initiative, the Budget Communication also announced that the government was immediately implementing certain tax measures to promote the revitalization of Grand Bahama.
“For existing properties in Grand Bahama, the hotel occupancy tax is being reduced by 50 per cent for five years for all properties filing returns under the newly introduced electronic reporting system.”
“To assist in ensuring the success of new hotels, the hotel occupancy tax is likewise being reduced by 50 per cent for 10 years after opening,” he said.
The government has also already recreated the Ministry of Financial Services, with an allocation of $4.4 million, whose priorities will include, in collaboration with the private sector, the promotion of innovation and development in the financial services industry, as well as international trade matters, Halkitis said.
“The budget also provides for a special line item allocation of $15 million with which the government will begin the immediate implementation of its priority agenda.”