16 FY2022 / 2023 BUDGET COMMUNICATION
Madam Speaker : An RFP for a renewal contractor had been issued with a provision that the contractor needed to demonstrate that they have $ 500,000 deposit in a bank account . This automatically disqualified most Bahamian contractors . They then awarded a contract where the Government pays 85 % of the contract amount before the first panel is installed .
Madam Speaker : There had been no widespread effort to support solar adoption in any of our islands . The framework for renewables has seen little movement , including no work to update the Energy Sector Policy , which expired in 2020 .
Madam Speaker : Since coming to office , my administration has moved quickly to rectify this and to capitalize on this missed opportunity by strengthening the Project Execution Unit ( PEU ) in the Ministry of Finance to ensure timely delivery , value for money and to co-ordinate activities with other relevant stakeholders on this project . The result has been substantial progress on this project in the past few months .
Madam Speaker : My administration will use these loan funds properly . The immediate focus is the introduction and implementation of new models to develop resilient solar PV installations in The Bahamas .
To accomplish this an assessment of energy systems in New Providence and the Family Islands will need to be done . This work will start in the southeastern islands , namely Inagua , Mayaguana , Acklins , Crooked Island and Long Cay .
This year we will deploy in those islands , public decentralized solar PV plants ; rooftop systems and innovative microgrids with storage capacity ; and grid modernization technologies to improve the reliability and resiliency of the power network on these islands .
Additionally , pilot installations of Solar Photovoltaic Systems on public Building in Andros will also be carried out . Thereafter , the installations of Solar Photovoltaic Systems with be extended to the Central and Northern Bahamas .
Madam Speaker : A key aspect of this project is to ensure Bahamian participation and ownership in this industry . What this means , Madam Speaker , is that going forward , we are committed that all future maintenance , installation , site works or the like , will be conducted by Bahamians .
As part of this project , we are committed to have in its first cohort , a minimum of 25 Bahamians , trained and certified to operate in this sector . We will also commit and ensure that government funding agencies make resources available to those individuals who have successfully completed this course , in order to support them in opening their own business in this
sector . We will also encourage the inclusion of green technology in all new major construction , and eventually provide the opportunity to offer similar services around the region .
6 . Fiscal Outlook in FY2022 / 23
Madam Speaker : Finally , I wish to consider the outlook for the upcoming fiscal year .
The current budget projects a significant rebound in the Bahamian economy .
Total revenue is projected at $ 2,804.4 billion , a 19.9 percent increase over the prior fiscal year when the economy was in the early stages of an economic rebound from the COVID-19 pandemic . It incorporates many of our revenue enhancing strategies and outcomes such as :
» Increasing Real Property Tax collections and compliance ;
» An improved VAT performance , based on the economic rebound ; and
» Growth in other fees as a result of improved revenue administration .
In the budget for fiscal year 2022 / 23 , VAT collections are estimated at $ 1,411.8 million , a 52.4 percent increase over the prior year budget .
The increase is largely attributed to a rebound in economic activity , the economic stimulus associated with the reduction in VAT from 12 percent to 10 percent , as well as the positive benefits of the removal of the COVID-19 Emergency Orders .
Real property tax revenue is also forecast to improve by 6.7 percent to $ 169.4 million , but remain below the more than $ 280 million in Real Property Tax invoices issued annually . Enhancements in revenue administration are critical in further improving collections in this area . One such transformative policy is the agreement of banks to assist in the collection of Real Property Tax from mortgage holders .
Madam Speaker : Total expenditure is forecast at $ 3,368.4 million , with recurrent expenditure projected at $ 2,997.2 million , and capital expenditure estimated at $ 371.1 million .
As a result of these operations which incorporate prudent fiscal management principles , the fiscal deficit under the current budget is estimated at $ 564.3 million or 4.3 percent of GDP .
I wish to remind this Honorable House that this projected outturn does not include potential revenues from asset sales , such as receipts from the sale of the Grand Lucayan Hotel in Grand Bahama .