Rick Lowe
Tribune Business featured an interview with Mr. Zhivargo Laing, Minister of State for Finance to get his response to a recent report by Moody's Investor Service about the debt levels of The Bahamas.
While your not so humble blogger understands, and even agrees with many of Mr. Laing's comments, and commend him for finally changing his tune, I'm still left with an emptiness about it all.
He glosses over the fact that government spends far too much. Much more than they collect in taxes. That's not lack of revenue, that's lack of fiscal responsibility.
In the private sector we can only get away with doing that for short periods of time. Our successive governments have been doing that every year since 1967, and now all the political class can think of is getting more taxes from the citizens?
Well that's, oh what the heck, bull shit!
Cut spending, waste and corruption in government like you mean it first!
One good place to start is by closing embassies and selling off the properties all over the world. Do we honestly need them?
How about cutting travel to all those symposiums around the world with large entourages for a while? Go To Meeting over the Internet works just great for the private sector. Why can't it work for bureaucrats and politicos?
Then look at combining Government Ministries. Do we really need all the Cabinet Ministers and attendant costs for vehicles and chauffeurs etc that we have?
With a debt to GDP ratio, including contingent liabilities near 54% Mr. Laing seems to be more focused on expanding the tax base rather than cutting government spending and reducing it's size and scope, which is what got us into this mess in the first place!
See why I'm left feeling empty about this. In essence, Mr. Laing knows that government is not fiscally responsible, witness BahamasAir alone, but Parliament can only see one way to fix it.
And how is that? You guessed it. Stick it to the taxpayer and wealth creators! But it's the business class and private citizens that have taken this recession on the nose, not the Government. They are able to borrow, when the rest of us are cut off.
However, history proves that with higher government taxes comes even higher spending, so raising taxes should be the last resort with Constitutional caps on total debt to GDP and taxation.
Maybe I'm felling a little more than just empty about this, would you say?
Absolutely Rick,
I wash my hands of the lot of ’em, they have no clue.
Sure, taxes will go up.
Why?
Cause they can.
Far be it from any of the political class to admit, nor even recognise that they, singularly, are the problem.
Far from being the salvation of anyone or thing, they are the largest shackle on the heaviest chain around the Bahamian’s neck.
But as long as they have that avenue that leads directly to us, the productive, the economic private sector base of this country,
there is no reason for them to change.
No good can come of them, or us when pillaged by them.
Revenue might have to increase in order to avoid this unsustainable borrowing that the Government is doing. The problem is that increasing taxes should not be the focus of the Government. Proper vision and governance is required to address the need of increased revenues, and this is through economic expansion. You can increase government revenues while decreasing taxes through economic expansion, expansion in areas such as manufacturing and international trade and commercial international banking. Focus on increased economic expansion to increase revenues, not increase in taxes. I also agree more efficient government is needed.
The City of Cleveland is a perfect example of this.
Spend like there’s no tomorrow and then tax the citizens and businesses until they leave.
Great logic in that.
Government and by extension Parliament, must show that they are prepared to suffer the weight of its profligacy by cutting spending and salaries etc.
They also need to encourage more businesses to open.
There is simply too much read tape to open a business here, and if this can be lessened, m aybe the some confidence will be returned to the entrepreneur and the economy will slowly start to grow?
Why am I wrong?
I agree about the red tape in opening a business. You should be able to form your company and get your requisite approvals, assuming no complications, within 10 days, not months. Why this reform cannot be put in place quickly I don’t know. One would think it woudl only require organization, a consolidated plan and some updated technology.
Does anyone in government not think that we are over taxed now ? My God we might as well have Income tax, this is getting out of hand.Enough is enough!
I agree with Canes, in that economic expansion should net the Government more revenue, even to the point of reducing per capita taxation but it remains a pipe dream when the government mantra is
TAX, HARASS, BEG.
Licensing our fleet of vehicles the other day, the handwriting clerk we discovered was due a “TIP”
For what? Doing her JOB?
With Government extolling all departments to collect, collect, collect, their tips have become secondary, but are creeping back in.
What a way to run a country.
Where there are options it is “better in the Bahamas” to leave rather than suffer from an over taxed failing economy.. The largest private travel organization in Japan left the Bahamas a little over a year ago, as government red tape, excessive fees and poor service drove them to another jurisdiction..
Rick, BS in the Bahamas means Bad Service which as cost our country a major player in wealthy Asian tourism markets.. I wonder if the powers to be at the Ministry even know what has happened??
As long as they can get away with it, they will.
With the “red tape”, it just gives more time for the under the table nonsense that goes on, that’s all. Without that, their opportunities are more limited.