James Smith: Gov't must 'move' to run recurrent surpluses

As for a strategy to rescue the Bahamas from its fiscal woes, Mr Smith told Tribune Business: "We've got to grow the economy, reform the tax system and move to producing a small surplus on the recurrent account. That's where the problem is."The Bahamas will find achieving consistent recurrent surpluses difficult to put it mildly. Although it did run an $8 million surplus in 2005-2006, and $24 million in 2007-2008, when the economy was booming, since then it has run recurrent deficits of between $168 million to $259 million. It is projected to continue incurring recurrent deficits of between $48 million to $166 million for the current, and next two, fiscal years.And, looking further out, Mr Smith told this newspaper that the Government needed to take "some very hard and fundamental decisions".He warned that bringing the national debt and fiscal deficit under control, and down to a sustainable level, would require a combination of revenue and spending measures - including "curtailing" the size of the Bahamian public sector/civil service."I think down the road we're going to have to take some very hard and fundamental decisions," Mr Smith told Tribune Business. "One is tax reform to capture more in the net and broaden the base to include services."Two, is curtailing expenditure by stopping the growth of the public sector. It's expenditure containment and revenue enhancement."
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