2020/21 Budget Communication 2020-21 Budget Communication - Final (1)-compresse | Page 21

Public Health, for example, which now has its own Head in the Budget Book, totaled $45 million.
This, paired with the allocations to the Ministry of Health constitute funding of over $300 million
to the public healthcare system in the upcoming Budget, an increase in allocation of $18.5 million
from the previous year.
As a result, we have budgeted recurrent spending at $2.6 billion, which is $35.3 million or 1.4
percent higher than the revised budgeted sum of $2.5 billion for the Supplementary Budget.
Comparatively, capital expenditure will feature a number of projects, which support hurricane
restoration, as we continue to rebuild Grand Bahama and Abaco.
In addition, the Government will be maintaining its investment in education, to ensure that all
eligible Bahamians are able to access free tuition, from preschool to University. In fact we have
increased the allocations for the UB scholarship initiative by $1.5 million, and the Bahamas
Technical & Vocational Institute by some $500 thousand, in anticipation of an increase in
enrollment as these tertiary institutions have signaled an increase in applications in the aftermath
of the COVID-19 situation.
Further, we will expand our investments in hospitals and clinics, road works and other civil
projects across the Commonwealth to boost critical infrastructure and generate near-term job
opportunities. All told, we are boosting capital spending to total $515.5 million, which is
equivalent to a $190.0 million, or 58.4 percent increase over the projected outturn of FY2019/20.
Mr. Speaker,
Given these developments, the fiscal deficit is budgeted at some $1.3 billion, or 11.6 percent of
GDP for the upcoming fiscal year. This is the largest deficit to be incurred by any Government in
the history of The Bahamas. This is indeed a testament to the monstrous impact Hurricane Dorian
and COVID-19 has leveled back to back on our small, open economy. Almost uniformly, all
countries of the region, and indeed the world, are facing similar fiscal situations and in almost
every instance they are responding with expanded deficit funding to meet critical COVID-19
health care needs, to expand their social welfare spending, to keep their people employed, and to
keep their economies stable. While we have sought to trim where we could, our driving ethos has
been to do all we can to support Bahamians and to maintain as much employment and economic
activity as we can over the near term.
During this time, the Government could have chosen to continue its fiscal restraint measures by
cutting back spending and starving a deprived economy. However, we did not choose this route
as we appreciate that during a downturn, Government spending is crucial to reviving a
downtrodden economy. Again, these are unprecedented times that have called for unprecedented
measures, and we are intent on ensuring the efficacy of our outlays in line with our overarching
fiscal responsibility objectives.
The corresponding Government Debt level is expected to rise to nearly $9.5 billion, equating to
roughly 82.8 percent of GDP.
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