LEADER OF THE OPPOSTION RESPONDS TO PRICE CONTROL

Nov 7, 2022

The Opposition takes note of the Statement made by the Bahamas Pharmaceutical Association yesterday evening leading to a temporary closure of private pharmacies. The Government must act immediately to resolve the dispute with the Pharmacies. This is what happens when there is no proper consultation. This situation was completely avoidable had the Government not acted with such arrogance in making changes without first consulting. Cheaper prices can be achieved without destroying small businesses which loses jobs and harms vulnerable families. We are also advised that the Bahamas Pharmaceutical Association has called for, and we agree for VAT to be removed from medicines. The Government must stop being stubborn and remove VAT from medication and breadbasket items.

This was a wrong decision made by the Government and we call upon the Government to act in the best interest of Bahamians. The Government’s first attempt to adjust price control has been a colossal failure starting with it’s a failure to consult both the Pharmacist and the Grocers. However, there are more fundamental problems with what is being proposed. First, the Government is attempting to get small business owners to bear the cost of the entire solution for the consumer. This cannot be right. Inflation is a global problem not brought on by them.

Second, as has been pointed out by the Retail Grocers Association the Government may have intended to include 38 new items but this really amounts to 38 new categories that may include thousands of new items. To change all these items (not categories) would, as the Association says, be catastrophic for their businesses leading to business closing and employees out of work. There are many versions of each of these categories all with varying degrees of pricing. Some are more nutritious than others. Some are more expensive than others and some are more high-end than others. Why have they included high-end items that do not require protecting? In the interest of fairness and in offering the right saving for the right people the Government should re-think this category approach and carefully look at the items that really need protecting.

The Government must act now to fix the mess it has created before we have more closures and job losses. Despite the warnings and admonishments of the Opposition on the subject of the implementation offurther price controls, the arrogant and hapless Davis administration continues to demonstrate how unfit they are at the task of collaborative governance. For months, the FNM has spoken to the need for the Government to be proactive in implementing measures to combat inflation. Instead, they went ahead and added VAT back onto medicines, bread basket items, baby care items and feminine healthcare products.

Unlike other countries, they added taxes and they chose not to work together with the business community to find solutions to help Bahamian families struggling with the sudden spike in inflation. Now we are witnessing the sad results of their attempts to force massive changes to the pricing structure of medicines and many key goods with absolutely no prior consultation with the affected stakeholders and seemingly without any analysis at all as to the impact of their hasty and ill-considered decisions. The pharmacies have shut down and the food stores have flat out refused to implement the new price controls. The Prime Minister MUST step up immediately and fix the mess that he himself created.

We offer these recommendations:

1. We challenge the Government to help the pharmacies to reopen in the interest of ensuring that Bahamians get access to the medicine they need. This could be done by having a goodwill, honest and respectful meeting with the affected businesses to come up with a workable solution.

2. The Retail Grocers Association should continue to invite the Government to conduct all relevant and proper investigations and as well as have meaningful discussions with store owners.

3. The Davis Administration and all stakeholders should continue to work together cooperatively to determine what concrete steps can be taken to reduce prices and assist the poor and vulnerable – but in a way that does not jeopardize the very Bahamian businesses that provide

the goods, services and employment to the public.

4. Immediately eliminate the VAT on the medicines, food supplies and other items that had been zero rated. Indeed, the FNM supports expanding that list to include other critical food supplies as necessary.

5. Expand the social services voucher programme to provide direct support to needy qualifying families to assist with the purchase of medicines and critical food supplies. Because the FNM believes in fiscal discipline and order, we propose the following to help offset revenue lost with

the VAT reductions and the increased spending on social service support programmes:

6. Reinstate the 12 percent VAT on real estate transactions over $2 million. This was a tax break to the wealthy that was not and is not warranted!

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7. End the illegal tax breaks provided to the wealthy after the budget ended for the purchase of their yachts and pleasure craft.
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8. Cut in half the allocations for foreign travel, for consultancies and for special celebrations and events. This would provide tens of millions of dollars in budgetary allocation to support the expanded spending on social welfare programmes. We hasten to remind the public that this Government increased travel and consultancies in its first full budget, June 2022, while cutting substantially the allocation to social services.

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9. The Government must protect Bahamian businesses such as Bahamian Brewery and Beverage Co. (Bahamian Brewery). It was a colossal mistake for the Government to amend the law so as to create a significant competitive disadvantage for this homegrown underdog, while at the same time enormously privileging the considerable market leader, a company that is majority owned by a worldwide conglomerate and which locally, already outsells the much smaller BBB by 4 to 1.

We demand that the government fix this matter forthwith and instead put in place programmes that bring inflation relief in a manner that does not harm Bahamian businesses.

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The Hon Michael C Pintard

Leader of His Majesty’s Loyal Opposition Leader of the Free National Movement

1ST November 2022

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