Bloated Public Sector Like ‘50k Pound Canoe Anchor’

Bloated Public Sector Like ‘50k Pound Canoe Anchor’

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government was yesterday urged to eliminate “excess weight” in the public sector that is dragging The Bahamas down “like a 50,000 pound anchor for a canoe”.

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Robert Myers, pictured, the Organisation for Responsible Governance’s (ORG) principal, said revelations that the Bahamian civil service scored just 19 out of 100 on an Inter-American Development Bank (IDB) assessment of its performance exposed the need for the Government to “turn its reform microscope inward”.

Emphasising that civil service inefficiency directly translated into higher private sector costs and a worsening “ease of doing business”, Mr Myers told Tribune Business that the IDB findings should force the Minnis administration away from further tax and fee increases to solve its fiscal woes.

With Camille Johnson, the Cabinet Secretary, quoted as telling the IDB that the civil service is “40 percent overstaffed” and its second-highest rank - the deputy permanent secretaries - are “extraordinarily weak”, the ORG principal said the reality of how a “bloated” government is “killing” The Bahamas is now being brought home.

“Finally it seems as if people are starting to listen and understand the extent of the problem,” Mr Myers told this newspaper. “The important question is what will the Government of The Bahamas do about it, and when will they act?

“I have likened the problem to a canoe trying to carry a 50,000 pound anchor. It doesn’t matter how fast you try to row, the boat is going down. The Government has to match its size and spending to the economy, and the match has to sustain itself year-over-year.

“A failure to act on this will result in a failed economic model and the country will suffer. We are in good global company the world over, but the survivors will be the countries that understand and fix the problem. The Bahamas has great potential if it acts.”

Mr Myers praised the Government for seeking to solve The Bahamas’ fiscal crisis, but warned: “Increasing fees and taxes has to stop, and taking excess weight out of government has to start and be ramped up.

“If we don’t trim and get rid of some of the excess weight, we won’t have an anchor that is properly sized for the boat. The anchor is the size of government, and the boat is the economy.”

The ORG chief said the Government will increasingly be forced to seek out internal solutions because the Bahamian public’s opposition to any further new and increased taxes is growing, especially since there has been little to no improvement in many citizens’ lives despite the Minnis administration’s lofty promises prior to taking office.

“It’s becoming ever more urgent because people are upset that they’re seeing more cost increases than decreases, they’re seeing more bureaucracy than ease of business, they’re seeing more inefficiency than efficiency in the public sector, and more unanswered corruption than equitable enforcement of the rule of law and, most important, because they’ve given away so much in taxes and seen very little in return,” Mr Myers told Tribune Business.

“The Government must focus its economic microscope inwards to right-size itself and not continue to tax the private sector and public. It is time to fix the size and efficiency of the public sector, and significantly reduce the weight of the anchor in the canoe.”

He added that the remarks by Ms Johnson, and Elise Delancey, the Ministry of Public Service’s permanent secretary, who said the civil service has “a hollow middle” and lacks skills essential for modern governance, showed that key executives were aware of the problem’s scale and the need to act.

Part of the solution, Mr Myers argued, lay in privatising loss-making state-owned enterprises (SOEs) such as ZNS and Bahamasair, plus liberalising sectors such as energy to introduce competition for the likes of Bahamas Power & Light (BPL).

“These are the things that are going to get the weight off the public sector and allow the private sector to flourish,” he told Tribune Business. “But when the economy labours, they want to add more cost.

“You’ve just whacked us with VAT, are killing is with power bills and are now talking about National Health Insurance (NHI). How many more nails do you want to drive into the coffin? Let’s lighten the load so we can keep the canoe afloat. The bigger problems are internal, not external.

“What’s really disappointing is that the public sector is 30-40 percent overstaffed and we still can’t get anything done. If it was 30 percent over-staffed but efficient people would not be screaming. The fact is we’re 30 percent over-staffed and it still doesn’t work. It’s a double whammy,” Mr Myers added.

“No matter how hard you paddle it can’t work. It’s a huge problem that feeds into the cost and ease of business. Inefficient governments the world over are killers of countries and economies. It’s right up there with corruption. Bloated governments kill economies and countries. Stop taxing people and figure out to run the Government more efficiently.”

Mr. Myers said too little work had been done to right-size the Government, with efforts to-date largely built on talk rather than action. Calling for greater transparency and more collaboration with the private sector, he added that any progress in this area will help restore “very low business confidence”.

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