TRAVEL BUDGET SOARS FOR GOVT: $11.8m spend exceeds allocation by 11%.

By NEIL HARTNELL

Tribune Business Editor

[email protected]

The Government’s travel spending yesterday ignited further Opposition attacks after it was revealed that the total $11.8m outlay for the 2021-2022 fiscal year exceeded Budget allocations by 11.1 percent.

Kwasi Thompson, former minister of state for finance in the Minnis administration, questioned why such funds had not been put to better use on post-Hurricane Dorian reconstruction and other pressing taxpayer needs.

“While we see an increase in taxes collected from Bahamians, we do not see a corresponding increase in assistance and relief, in particular, for islands still recovering like Grand Bahama and Abaco,” the east Grand Bahama MP said. “We do, however, see an increase in travel and subsistence which happens to exceed the budgeted amount by 11.1 percent.”

The details were contained in the Ministry of Finance’s just released report for the 2021-2022 full fiscal year and the fourth quarter, which revealed that travel-related spending and subsistence payments by the Government had increased by more than two-thirds year-over-year.

“Outlays for travel and subsistence grew by $4.7m (66.7 percent) to $11.8m, and exceeded the Budget target by 11.1 percent. Air transportation, inclusive of domestic and international travel, and the repatriation of the ill grew by $2.2m and $0.8m, respectively,” the report said.

The Free National Movement (FNM) opposition has frequently hit out at what it seeks to portray as the Davis administration’s excessive travel spending, with large delegations travelling to the COP26 climate change conference, the Summit of the Americas in Los Angeles and the Commonwealth Heads of Government meeting in Rwanda, as well as Expo 2020 in Dubai.

The Ministry of Finance figures will likely be seized upon by the Opposition to mount renewed attacks, even though $11.8m is relatively miniscule when compared to the Government’s $3bn-plus spending for the 2021-2022 full year. However, given the magnitude of The Bahamas’ fiscal crisis, every dollar counts, although it is unclear how much of the travel spend relates to the Minnis administration which was in office for the fiscal year’s first two-and-a-half months.

The Davis administration will also likely point out that the 2021-2022 figures are up against weak comparatives from the year before, when there was little to no travel due to COVID lockdowns, border closures and other restrictions. It will also counter that The Bahamas needs to enhance its presence on the world stage, especially on climate change issues, and forge relationships to advance its interests that can only be accomplished by travelling.

Meanwhile, the Government’s spending on leases for its rents and office increased by almost $22m or 35 percent year-over-year for the 12 months to end-June 2022. “Spending on the use of goods and services widened by $19.8m (3.2 percent) to $633.4m, relative to the same period in the prior year. This accounted for 93 percent of the annual budget,” the Ministry of Finance said.

“Rental costs rose by $21.6m (34.9 percent) to $83.5m for 98.8 percent of the budget. This rise is mainly driven by higher office rent costs ($11.5m) and lease agreements relative to the National Insurance Board ($8.9m)…. Special financial transactions, which include payment of arrears, increased by $36m (28.5 percent) to $162.2m, and exceeded the budget by 9.3 percent.”

Mr Thompson sought to downplay the $700.7m year-over-year increase in government revenues as “to be expected and no surprise”, arguing that this trend began when the Minnis administration was in office with 2021-2022 first quarter revenues finishing more than $92m above projections.

Dr Hubert Minnis, the former prime minister, also asserted that the original revenue estimates in May 2021 were conservative due to the then-continued uncertainties over the COVID-19 pandemic. The increased revenues were driven by the economy’s re-opening, and the end of lockdowns and other restrictions such as curfews, which the Davis administration has sought to take credit for.

Meanwhile, Mr Thompson tried to link the fiscal performance to inflation and the cost of living crisis, arguing that “life is not better for most Bahamians” due to high food, gasoline and energy prices.

Despite a $124.7m or 50.9 percent contraction in social assistance spending as COVID-19 support fell away, the Government’s total expenditure for 2021-2022 still rose by $142m or 4.9 percent to $3.015bn when compared to the prior fiscal year.

“Compensation of employees increased by $24.4m (3.5 percent) to $725.3m, and represented 92.7 percent of the budget target. This firming was largely explained by period-over-period expansions in employee wages ($18.8m); special employment programmes ($1.7m); discretionary allowances ($1.8m); summer employment ($1.4m),” the Ministry of Finance said.

“This increase in expenditure is largely attributed to the resumption of promotions, staff reclassifications, payment of increments and other employee costs delayed in the past year due to fiscal constraints.”