The Budget for the 2014/2015 fiscal year ending on the 30th June 2015 was passed in the House of Assembly with 24 Members of Parliament from the governing side voting yes, 6 nays from the opposition side and 7 absentees on the evening of the 19th June 2014.
The leader of the opposition, Dr. Hubert Minnis, notified the Honourable House during his budget contribution that the FNM Caucus would vote “no” on the budget on the basis that the budget violated the applicable provisions of the constitution as regards detailed itemization salary allocations. Notwithstanding this position, opposition members voted in support of the taxes associated with the budget.
Both the Finance Minister and Prime Minister, the Rt. Hon. Perry G. Christie and State Minister for Finance the Hon. Michael Halkitis pointed out that an IMF study commissioned by the Bahamas government sometime during 2010 recommended a reform of the budgetary presentation format to bring The Bahamas in line with international standards for budget presentations.
As an example of this reform, State Minister Halkitis repeatedly pointed out to the House that all expenses applicable to Government operations in the Family Islands were traditionally lumped together under a single Head with the caption “FAMILY ISLAND OPERATIONS.” In this budget presentation, the expense budget allocations for “Family Island Operations” were placed in separate line items for accommodations, salaries, utilities, maintenance/repairs and operating supplies just to name a few. The government believes that this new presentation format will provide for greater transparency, accountability and will allow the relevant ministries to more accurately track and better manage Family Island expenses.
Regarding the prominent features of the budget, for the upcoming fiscal year the government has budgeted Recurrent Expenditure at a level of $1,823 million, just $2 million up from the 2012/2013 fiscal year which was $114 million higher than the 2011/2012 fiscal year. According to the Prime Minister, this was “in part reflecting a year-over-year $40 million increase in debt servicing costs, $30 million of which in respect of interest expense and $10 million for debt redemption. Another $30 million of the increase reflects a simple re-classification of some expenditure from the capital to the recurrent expenditure budget. The $33 million balance of the increase in Recurrent Expenditure amounts to a rise of 1.9 per cent, significantly less than the projected increase in GDP.” This analysis was offered by Prime Minister and Minister of Finance, the Rt. Hon. Perry G. Christie as he wrapped up the budget debate in the House on the 18th June 2014.
Also touting the government’s resolve to fiscal discipline and success in reining in spending, Halkitis noted that the 2014/2015 Recurrent Expenditure “is only $2 million more than the estimate for Recurrent Expenditure in 2012/2013, notwithstanding a $48.55 million increase in interest expense during this period” said the Hon. Michael Halkitis during his budget debate on the 2nd June 2014.
“This clearly demonstrates that the Government has had, since coming into office, very tight controls on expenditure” according to the State Minister for Finance.
