Are we addressing the serious issues in this country?
It seems we go from controversy to controversy every week without really dealing with serious issues. I recently learned about a ticking time bomb that a leading accounting firm has likened to the Iceberg that sank the titanic.
Public Service Pension Liabilities
Most of us know that the public service salaries make up a major portion of the government’s budget each year, but we fail to realize that when these people retire the government is on the hook to pay pension as well.
In our review of the full year Budget last year, we noted that the pension issue can be likened to the iceberg that sank the Titanic.
The Government’s current financial statements, which are produced on a cash as opposed to accrual accounting basis, do not recognise its civil service pension liabilities or their scale.
This, arguably, means that the Bahamas’ fiscal woes are far worse than they currently appear, especially if the existing $1.5 billion pension liability is added to the $6 billion national debt.
Doing so would push the Bahamas’ national debt beyond the $7.5 billion mark, easily breaching the 70 per cent debt-to-GDP ratio ‘danger threshold’ identified by the International Monetary Fund (IMF) as a point when countries start to lose control of their financial affairs. – KPMG
The Article goes on to say that the debt that is currently 1.5 billion, will increase to $2.5 billion by 2022 and $4.1 billion by 2032.
Instead of the meaningless controversies we need to be asking serious questions about issues like this. What are the plans of the government to address this issue? What about the opposition’s plan?