By NEIL HARTNELL
Tribune Business Editor
(June 27,2018) NASSAU,BAHAMAS -The deputy prime minister yesterday admitted there is a "trust deficit" between the government and Bahamian people that he hopes to close with the Fiscal Responsibility Bill's passage.
KP Turnquest told Tribune Business that poor fiscal management, broken promises and a lack of transparency and accountability by previous governments had created a divide that the proposed legislation will help bridge when it becomes law "as soon as possible".
He revealed that consultation on the draft bill will close this week, amid hopes it can be brought to cabinet next week and then tabled in Parliament "at the earliest opportunity".
Confirming that several changes had already been made, Mr Turnquest said he was targeting the bill's passage through Parliament and into law prior to its summer recess or break, given that it would boost business and taxpayer confidence that the government intends to deliver on its fiscal consolidation strategy.
He described the bill's enhanced fiscal governance and reporting mechanisms, together with deficit, spending and debt targets it must meet by law, as "a critical control feature" to ensure that the current and future governments do not repeat the wasteful expenditure and borrowing habits of the past.
"We're about to close off the consultation on that this week," the deputy prime minister told Tribune Business of the Fiscal Responsibility Bill. "Next week, hopefully, I will bring it to cabinet, and then it will be laid in the House at the next earliest opportunity. After that, I'm hoping [it will pass] next month, hopefully before Parliament breaks. If not, as soon as we return."
The timetable laid out by Mr Turnquest will likely reassure fiscal governance reformers, as well as a private sector and taxpayers taken by surprise by the 60 per cent VAT rate hike, that the Fiscal Responsibility Bill remains a legislative priority for a Government that recognises it needs to deliver on its consolidation targets and promises.
Mr Turnquest yesterday described the Bill as a "vital" check on fiscal irresponsibility by future governments, adding that the Minnis administration was "very cognisant" that the legislation's passage into law would provide greater comfort for businesses and consumers now being called upon to make an even greater sacrifice through higher taxes.
"It's critical. It forms a part of the overall control features in the Budget, and it builds in the confidence for the public that we're going to do what we say we're going to do with respect to the strategies outlined in the Budget," he told Tribune Business.
"It's a critical component of the overall path, and we want to get it done as soon as possible..... We recognise there is a trust deficit that has built up over the years between the public and governments.
"We recognise that we have to build in this kind of information and control legacy that helps to rebuild that trust. We're committed to being open with the results, and communicate with the public on a regular basis, so they help to keep us compliant, spot trends, and ensure we take corrective action on a timely basis."
Mr Turnquest did not identify any specific actions that contributed to the "trust deficit", although he likely had in mind the former Christie administration's failure to use its VAT revenue windfall for the stated objectives - eliminating the fiscal deficit and paying down the near-$8 billion national debt.
Instead, the former government added some $2.2 billion to the national debt over a five-year period despite receiving some $1.1 billion in gross VAT revenues during the tax's first two calendar years, much to the unhappiness of the private sector which had bought into the previously-announced goals.
Both Robert Myers, the Organisation for Responsible Governance's (ORG) principal, and Carey Leonard, the former Grand Bahama Port Authority (GBPA) in-house attorney, last week urged the Government to prioritise the Fiscal Responsibility Bill's passage to give Bahamians confidence their VAT sacrifice is not in vain.