WEDNESDAY, OCTOBER 19, 2016
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NIB’s unfunded pension liability near 50% GDP By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
The National Insurance Board’s (NIB) unfunded pension liabilities, equivalent to almost 50 per cent of Bahamian GDP, represent a “major fiscal risk” that demands at least a 5.4 per cent increase in contribution rates. The stark warning was contained in an International Monetary Fund (IMF) working paper, released yesterday, which said that a combination of reforms, such as increasing the retirement age, a twoyear pension benefit freeze,
* IMF paper warns of ‘major fiscal risk’ if no reform * Calls for 5.4% pt increase in contribution rates * Higher taxes, low growth and no debt limit if no action and 1 per cent contribution rate rise, would be insufficient to eliminate a multibillion dollar funding gap. “For countries with relatively large unfunded pension liabilities (Antigua and Barbuda, the Bahamas, Belize, Jamaica, and St Vincent and the Grenadines), these measures will not be sufficient to address the actuarial deficits, despite having quite a large benefit in
reducing pension costs,” the IMF paper warned. “Furthermore, these countries would have to implement far-reaching structural reforms or risk even higher taxes, lower growth and unsustainable debt dynamics.” The paper, entitled ‘National Insurance scheme reforms in the Caribbean’, said implementation of its three proposed reforms
FNM’s deputy slams storm tax ‘nonsense’ * KP: ‘Already devastated’ economy can’t bear it * Says proposal shows Bahamas at ‘top of fiscal limit’ * Cabinet discusses idea ‘briefly’; no decision yet
By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
that the proposed new, or ‘special’, tax to help finance storm-related relief efforts was discussed “briefly” at yesterday’s Cabinet meetThe Opposition’s fiing. nance spokesman yesterNo decision was taken on day slammed the Govwhether to implement it, ernment’s ‘hurricane tax’ and Tribune Business unproposal as “nonsense”, derstands that further diswarning that an “already cussions on the proposal devastated” society and KP Turnquest are set to be held. economy would find it imMr Turnquest, meanwhile, sugpossible to bear further cost ingested that the Government might creases. K P Turnquest told Tribune seek to increase the Value-Added Business that the fact the Christie Tax (VAT) rate to 8 per cent as administration was even entertain- an alternative to introducing new ing such a proposal showed that taxes. And he added that the Governthe Government had “reached the top of its limit” in terms of borrow- ment’s ‘floating’ of a revenue solution showed how “real” the threat ing capacity. This newspaper understands SEE PAGE 4B
Bran: New taxes ‘won’t dig us out’ of Matthew hole * Warns Gov’t: Bahamians ‘can’t afford’ storm relief tax * Says it ‘can’t be trusted’ with any new tax plans * Fears possible increase to 7.5% VAT rate By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net The Democratic National Alliance’s (DNA) leader yesterday warned the Government not to “dig yourself out of the hole” left by Hurricane Matthew through further taxing Bahamians, adding: “We cannot afford it.” Branville McCartney told Tribune Business that the Christie administration was already “taxing us out of business” through Value-Added Tax (VAT) and other impositions prior to its proposed ‘hurricane tax’ to finance relief efforts. He argued that the Government “cannot be trusted” to devise, and implement, further taxes given its lack of accountability and transparency over what the $600 million in gross VAT revenues had been used for. “You cannot, at the end of the day, dig yourself out of a hole by taxing the Bahamian people. It will not work,” Mr McCartney said of the proposal, floated by Prime Minister Perry Christie, to finance postMatthew restoration via new or increased taxes. “I think the public reaction will tell him, going back to VAT, that this hurricane tax is something that we cannot afford as a peo-
DNA leader Branville McCartney
ple at this stage. We cannot afford it.” Mr Christie, in suggesting that new or increased taxes might be needed to finance the multi-million dollar repair bill left in Matthew’s wake, pledged that any such move would have “minimal impact on people”. He also hinted that such a move would be temporary, but the idea has already run into significant opposition from the Chamber of Commerce and the private sector, which have warned it would impede economic recovery and deter stillclosed businesses from ever opening again. The Chamber also warned that a ‘taxation solution’ would hurt most those it intends to benefit, SEE PAGE 5B
would produce a significant reduction in NIB’s unfunded pension liabilities - from a figure equivalent to 49 per cent of GDP, to 7.6 per cent. But, based on current Bahamian GDP numbers, the latter still represents a sum of more than $600 million, which the Government (and Bahamian taxpayer) may ultimately be required to cover. To completely eliminate
NIB’s unfunded pension liabilities, the working paper estimated that a retirement age increase and two-year benefit freeze needed to be accompanied by a 5.4 percentage point rise in NIB contribution rates. This would involve increasing NIB’s contribution rates to 16.2 per cent, compared to the current 10.8 per cent, split 4.4/6.4 between employees and employers, representing a significant drag on take-home pay and businesses. The IMF paper gives a clear insight into both the scale and urgency of the social security reform task SEE PAGE 2B
BPL places new business connect requests on hold * Superwash’s $3m investment on generator since open * Utility puts emphasis on Matthew restoration * Owner queries why near 2 weeks for ‘cavalry to arrive’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net Superwash’s newly-opened $3m million laundromat has been unable to get an electricity connection because Bahamas Power & Light (BPL) is not currently accepting any new business applications. Dionisio D’Aguilar told Tribune Business yesterday that BPL was focusing on its ongoing hurricane restoration efforts, leaving his new Soldier Road location completely off the grid since opening last Friday. “We got our licensing sorted out, but now we can’t get power,”
Dionisio D’Aguilar he said of the new 7,000 square foot site, based at the former Pricebusters location. “We’ve had to run-off generator. “BPL are not accepting applications for any new businesses. Any new business that wants to come online will have to wait until they SEE PAGE 5B
$4.04 Power loss leaves bed maker dozing * Cartwright’s sales down 87% year-onyear for month * Fears inventory run-out with no new product * Rivals comes to aid, as all nine staff still retained By NATARIO McKENZIE Tribune Business Reporter nmckenzie@tribunemedia.net A bedding manufacturer yesterday said business levels had plunged almost 90 per cent year-over-year postMatthew, with the loss of electricity for two full weeks severely compromising its ability to produce finished products and generate sales. Jonathan Cartwright, president of Shirleabased Cartwright’s Bedding, told Tribune Business: “Sales are down 87 per cent when comparing this point over the same period last October. “Our electricity has been off since the hurricane and it’s been two weeks now. We only have so much stock on hand, and so the problem is the lack of electricity.” Mr Cartwright added that while the business does have generators, they are insufficient for most of his manufacturing equipment. “I do have generators that can run some small stuff, but they can’t run most of my equipment because they are big three phase machines,” he exSEE PAGE 5B
PAGE 2, Wednesday, October 19, 2016
A beacon of light through the storm
I thought it was bad that my power was off for nearly a week after Hurricane Matthew. But I know that is nothing compared to many of my fellow Bahamians, who are not expected to have their light restored for a long time. If you are looking to find or provide some electricity relief in this hard time, this article is for you. In my experience, when most people first think about going solar, they look to a battery system. Here is how it works. The solar panels produce power all day, and the batteries collect it. At night (or when Bahamas Power & Light (BPL) goes out), the batteries can then run the home (or parts of the home). That is a fair summary.
This system can be applied on a large scale, with a home or business owner investing tens of thousands of dollars to make their electric bill disappear forever. However, battery systems usually get applied on a more moderate scale, which involves investing a few hundred or a few thousand dollars on a partial home solar system or a separate portable solar generator. This is the same system at work in our tiniest solar kits, where people can use the sun to power their lights and cell phones for between a few hundred dollars to less than $100. Many people prefer to get a second kind of system – a grid-tied system with no batteries. The sole
function of this system is to save you money. Here is how it works: The solar panels still produce power all day, and the power is immediately used in your home or business. This means you pull less from BPL and save money on your electricity bill. In fact, if your panels produce excess power, this gets sent out to the grid, and you will receive a credit for it (if permitted by the utility). How do the two systems compare? Batteries are the single most expensive component in the whole system, and must be changed every five years. They are more costly and more complex. Battery-less grid-tied systems require less maintenance and are less expensive, but
they do not store power. For this reason, all the solar kits we donated to help with hurricane relief were battery-based systems. What if neither option really suits you? Is there a third option? Yes. Some people will marry the two systems, and install a gridtied system with batteries. We call this a bimodal hybrid system. This is the most complex and costly approach, and gives you the best of both worlds. So, which system is best for you? In the end, it comes down to a matter of priorities. One priority is having power when BPL is not available. The other is saving money on the electricity bill. If you had to pick just one
of these, which would you choose? Your answer will determine the solution that fits you best – whether a battery system for backup power, or a grid-tied system to save money faster. And, of course, if you absolutely have to have both, and you do not mind putting out a little extra capital, you can obtain a bimodal hybrid system to save money and provide back-up. The choice is yours. Whichever option you would like, be sure to consult with a professional who can properly assess your situation and design a system to meet your specific needs. That is the first step in turning your dream battery, gird-tied or hybrid
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Joshua key SuperGreen Solutions
system into reality. NB: Joshua Key is general manager for SuperGreen Solutions Bahamas, located on Wulff Road next to FYP. SuperGreen Solutions is one of the premier advisors, suppliers and installers of domestic and commercial energy efficient solutions.
NIB’s unfunded pension liability near 50% GDP FROM PAGE 1B awaiting successive Bahamian governments between now and 2029, the year that NIB’s existing $1.7 billion reserve fund is projected to become exhausted. Drawing on its own estimates and the Bahamas’ own figures, the paper projected that NIB’s total expenditure in 2030, of some $1.466 billion, would be almost five times’ greater than its $322 million income. For 2050, it forecasts that NIB expenditure will be $3.346 billion, and income just $608 million, without far-reaching structural reforms. None of the ‘NIB sustainability’ concerns expressed in the IMF paper are necessarily new, but they highlight how successive Bahamian governments have elected to ‘kick the can down the road’ when it comes to changes that will ensure the survival of the nation’s social security system. Hurricane Matthew’s impact is likely to further postpone talk on reforms to address a ticking social and economic ‘timebomb’
for the Bahamas, which is also linked to the Government’s unfunded public sector (civil service) pension liabilities. The KPMG accounting firm previously warned that the growing $1.5 billion unfunded public sector pension liability would become unsustainable within 10 years, and hit $4.1 billion by 2032, if no action was taken.
Risk While NIB’s issues are separate from this, both are connected, as the IMF warns that unfunded pension liabilities now represent a “major fiscal risk” to the Bahamas, which is already struggling with a $6.695 billion national debt, equivalent to almost 75 per cent of GDP. Both NIB and the public sector pension liabilities are not included in national debt calculations, but the IMF paper warned: “Since fiscal positions are already over-stretched, and public debt-to-GDP ratios are very high in the region, these [social security] contingent liabilities are
major sources of fiscal risk. “In several cases, failure to disclose and prepare for contingent liabilities has led to large increases in public debt and triggered fiscal crisis. “In other words, countries with both large debt-to-GDP ratios and unfunded pension schemes need to implement farreaching pension reforms now or risk even higher taxes, lower growth and unsustainable public debt dynamics.” The warning to the Christie administration could not be clearer, and the IMF suggested that the first step in addressing this risk was “disclosure of information” - meaning greater transparency and accountability. “Given the large fiscal risk associated with pension schemes in the Caribbean, it is good practice that governments adhere to... codes of international best practice,” the IMF working paper added. It said unfavourable demographics, such as falling birth rates and an ageing population, would exacerbate the issues and need for reform - at NIB and
other Caribbean social security schemes. The IMF paper also suggested that the Bahamas required a 10 percentage point contribution rate increase if no other reforms were enacted, the second highest rise in the region behind St Vincent & the Grenadines.
Retirement It estimated that containing pension eligibility, by increasing the retirement age from 65 to 67, would save NIB a sum equivalent to 5.3 per cent of GDP over the five years between 2016 and 2021. And a two-year freeze on pension spending would save a sum equivalent to 3.2 per cent of GDP over the same period. The IMF paper also noted NIB’s relatively high administrative costs, something that is common to the region, given the limited ability to obtain economies of scale. “In the Bahamas, for example, one–quarter of contributions is used to run the NIB, and staffing
costs constitute around 70 per cent of administration expenses, mostly reflecting the scheme’s relatively large role, staff size, and the difficulties of rendering social services on all the islands,” the paper added. “The Bahamas NIB has 579 employees in up to 20 locations across the country, and performs numerous functions, including registration, collection of contributions and the administration of various benefits. “It will begin registration of beneficiaries under the soon-tobe launched government’s National Health Insurance.”
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Wednesday, October 19, 2016, PAGE 3
No Gov’t pressure on debt ratio drops
By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
The Central Bank’s governor yesterday said there had been no pressure from the Government to revise the Bahamas’ various debt ratios downwards, a move that led to the re-publication of its 2016 second quarter economic review. John Rolle told Tribune Business that the changes, and review’s re-issue, were based on the fact that the debt ratios should have been calculated against ‘nominal’ GDP. Instead, he explained that they were originally based against ‘constant’ GDP, a measurement that strips out the impact of inflation, and thus places a lower figure on the Bahamas’ economic output. “There was no communication with the Government on this matter,” Mr Rolle told Tribune Business, responding to this newspaper’s inquiries.
* Central Bank lowers key GDP-based benchmarks * Publishes revised second quarter economic review * Initial ratios based incorrectly on constant GDP
“The GDP ratios should have been against ‘nominal’ GDP. Instead, the calculations were presented against the inflation-adjusted estimates or ‘constant’ GDP. I can confirm that the dollar value of debts being used are the same. For time to time in the past, the Central Bank issued revised versions of its publications.” The initial second quarter economic review, as reported by Tribune Business, revealed that total public sector debt was a mammoth $7.604 billion, a sum equivalent to more than 90 per cent of national economic output (GDP), based on official data from the Central Bank and the Government’s Department of Statistics. The report also revealed that total public sector debt increased by more than $1
billion in the two years to end-June 2016, “Total public sector debt, which includes both the guaranteed and non-guaranteed obligations of public enterprises, alongside the direct charge [on central government], rose by $29.3 million (0.4 per cent) during the quarter to $7.604 billion,” the original Central Bank review said. “For the fiscal year, the combined debt increased by $426.9 million (5.9 per cent), as compared to growth of $651.8 million (10 per cent) during fiscal year 2014-2015. “Public debt at end-June 2016 was estimated at 90.4 per cent of GDP, while the ratio for the direct charge [on government] and the national debt stood at 70.8 per cent and 79.6 per cent, respectively.”
However, the revised review version now available on the Central Bank’s website shows a total public sector debt ratio at end-June 2016 of 85 per cent. The ratios for June 2014 and 2015 were also reduced a similar amount - around five percentage points. The ratios for the ‘direct charge’ on the Government, and the national debt, were also lowered. The former came down from 70.8 per cent to 66.6 per cent in the revised report, while the national debt-to-GDP figure dropped from 79.6 per cent to 74.9 per cent. While both figures now look slightly better in the revised review, they remain too high for many economists and, probably, the Government’s liking. Making good on Mr Rolle’s promise to provide a clarification, the Central Bank posted a release on its website late yesterday. It confirmed: “The debtto-GDP ratios presented in
the original report calculated a constant GDP series (2006 base) as follows: June 2014: $7.945 billion; June 2015: $7.859 billion; and June 2016: $8.414 billion. “However, the correct relevant nominal GDP estimates - also from Department of Statistics - are 2014: $8.57 billion; 2015: $8.736 billion; 2016: $8.944 billion. This methodology converts calendar year GDP estimates into fiscal year estimates, by taking the average of the two adjacent years. The mid-point estimate for 2016 is averaged as the estimated value for calendar year 2015 and the projected value for calendar year 2016.”
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Union chief urges employers: Keep paying workers * Calls for humanitarian gesture * Still paying his staff, despite two-week closure By NATARIO McKENZIE Tribune Business Reporter nmckenzie@tribunemedia.net A trade union leader yesterday urged employers whose businesses remain closed or inoperable following Hurricane Matthew to continue paying their employees as a “sign of good faith”. Obie Ferguson, the Trade Union Congress (TUC) president, acknowledged that while employers are under no obligation to do so, such an act would be a noble humanitarian gesture. “There is no obligation on the employer to pay for an act of God or, alternatively, a catastrophe,” he said. “Ultimately, there is no obligation for the employer to pay. The employer can do
OBIE FERGUSON something very similar to what I’m doing, but there is no obligation to pay.” Mr Ferguson said his law office has
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been closed for the past fortnight, adding: “My office has not had electricity in two weeks. “The office isn’t open right now, but I’m still paying my staff. “I think that this is a good time to demonstrate something positive towards the workers, those companies where they had to close due to the electricity issue.” He added: “I would suggest that they pay the workers for that period as an example of good faith and to assist them. This was not something that they anticipated or, in most cases, plan for because the average worker doesn’t have access to that kind of cash. “Even though they may appear to be insignificant, it is significant depending on the situation. “This hurricane has impacted every single person in this country to some degree. I think that we, as employers in some instances, can demonstrate the humanitarian situation as it relates to our workers.”
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Unions to assist staff at the Grand Lucayan
By NATARIO McKENZIE Tribune Business Reporter nmckenzie@tribunemedia.net
Trade unions representing Grand Lucayan workers are seeking to meet with resort executives to work out an arrangement where staff could receive payment for “a couple of weeks”, as they also step up to provide post-Matthew support. Obie Ferguson, the Trade Union Congress’s (TUC) president, said yesterday: “When I go to Freeport in effect I will be reemphasising the need for the employer to operate under these circumstances with restraint, while understanding the difficulty the hotel faces as well.
“We will try and do what we can and discuss the matter with the employer. “Things are really rough up there and the employees will need help, there is no question about that.” The Grand Lucayan Resort is expected to re-open on November 7. The 519-room property, which consists of Breaker’s Cay and Lighthouse Pointe, is undergoing repair for significant roof damage following the Category Four storm. The Commonwealth Union Hotel, Services and Allied Workers (CUHSAW) union represents workers at the Grand Lucayan Resort, which is up for sale by way of a sealed bid auction. The 409-acre property,
owned by the Hutchison Whampoa Group, has been on the market since January. Mr Ferguson added that the Bahamas Hotel Managerial Association, another TUC affiliate of which he is the president, will also reach out to its members. “We will be making compensation of some sort to the members of the union who have been adversely affected as a result, and to ensure that they get something from the association,” he added. “They have been good members in support of the association, and now I think that the time has come for the association to do something tangible for each member of the BHMA who are employed with the Grand Lucayan.”
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PAGE 4, Wednesday, October 19, 2016
FNM’s deputy slams storm tax ‘nonsense’
FROM PAGE 1B of a post-Matthew credit rating downgrade is. Calling for the Bahamas to get “creative” in financing restoration, Mr Turnquest urged the Government to tap all potential grant funding sources before looking at taxation or taking on increased debt. He also demanded that the Government redeploy the ‘contingency’ funds, which have been allocated throughout the 2016-2017 Budget to numerous ministries and departments, to the Matthew relief effort. The east Grand Bahama
MP estimated that by doing this, a sum equivalent to around 5 per cent of the Government’s planned $1.7 billion recurrent spending - some $85-$90 million could be freed up to assist the recovery drive. “We are at the top of our limit,” Mr Turnquest told Tribune Business. “There is no fiscal headroom left, which is why they are looking for alternative sources of funding, and the threat from the rating agencies is very real. “The Government is trying to figure out alternative arrangements, but no matter what it comes up with,
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it’s still going to potentially affect the rating. “Hence why they’re floating ideas of increasing the VAT rate or new taxes, as that will not impact the direct charge on the Government or increase the national debt.” Matthew is likely to have blown the Government’s fiscal consolidation plan and deficit reduction projections well off course, not to mention its 2016-2017 Budget calculations. The Bahamas is hovering just one notch above so-called ‘junk’ status with both Moody’s and Standard & Poor’s (S&P), and the multi-million dollar repair bill Matthew has left in its wake could prompt both agencies to downgrade this nation again depending on how it responds to the disaster. Borrowing to finance relief efforts will further increase the $6.778 billion national debt, and could potentially spark such a downgrade, but Mr Turnquest warned that revenueraising measures carried “their own risks”. In particular, he warned that new or increased taxation threatened to slow the economy further at the worst possible time - when it is already struggling to rebound from Matthew. “They could risk pushing the economy further into depression,” the FNM deputy leader told Tribune Business of the proposed ‘hurricane tax’. “It hurts
the most vulnerable in an economy at times like this, and at times like this. “You’re sucking dollars out of the hands of the productive sectors, and out of the hands of consumers. It means that they have to make adjustments, and as they do, it affects the spending patterns and bottom lines of businesses, so overall productivity comes down”. Prime Minister Perry Christie, in floating the idea of new or increased taxes to finance post-Matthew restoration, promised any such initiative would have “minimal impact on people”. He also indicated that it would be a temporary measure. However, pronouncing himself “amused” by Mr Christie’s “musings”, Mr Turnquest argued that the suggestion showed “once again that he and his government are lost, and out of ideas and out of time. “Certainly, they are obviously out of step with the Bahamian people and our circumstance,” he added. “Now they are talking about a new Hurricane Relief Tax, and even rumours of increasing VAT rates to 8 per cent in order to stave off another downgrade.” Mr Turnquest said that in the days immediately following Matthew’s passage, there were numerous stories of relief supplies being turned away or sent to Haiti because of inefficiencies in accessing tax and Customs duty exemptions.
NOTICE Pursuant to the provisions of Section 138 (8) of The International Business Companies Act 2000, notice is hereby given that CAPRILU SECURITIES LIMITED has been dissolved and struck off the Register pursuant to a Certificate of Dissolution issued by the Registrar General on the 22nd day of September, 2016. Dated the 17th day of October, 2016 SOLEDAD GARCIA JIMENEZ LIQUIDATOR
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DAMAGE from Hurricane Matthew in the South Beach area.
“Now, having irritated some donors and having lost God knows how much goodwill, they are talking about adding another tax on the backs of an already devastated population,” the east Grand Bahama MP added. “Where do they think this money is coming from? With a limping economy, which has likely been thrown back into depression, with another negative growth year likely as a result of the devastation in Grand Bahama in particular, how does the PLP expect the private sector and consumers to bear this additional tax? “It is clear that this PLP Government is a tax and spend government, lacking in fresh ideas, fiscal discipline and concern for the average Bahamian family, following increases in the cost of living brought on by VAT and other taxes implemented in the last four-anda-half years.” Mr Turnquest urged the Government to get “creative” in funding Matthew restoration efforts, having again failed to properly prepare the Bahamas to weather such a storm financially.
Apart from seeking out grant funding, he mentioned ‘crowd funding’ as another potential avenue, and called on the Government to eliminate “the red tape” so that organisations such as Habitat for Humanity were encouraged to rebuild Bahamian homes. The FNM deputy leader also called on the Christie administration to repurpose the ‘contingency’ funds allocated in the 20162017 Budget, suggesting these could account for up to 10-15 per cent of recurrent spending. “Maybe it’s time to look at some of these contingencies, look at some of these contracts that can be delayed to free up money to be used in the relief effort,” Mr Turnquest told Tribune Business, “rather than go out and incur additional debt, and put an extra burden on the Bahamian people. “I haven’t looked at the exact numbers, but I imagine there’s 5 per cent in the Budget, to be conservative, and possibly up to 10-15 percent, when you add up the contingencies in various ministries. Let’s be realistic about where we are.”
NOTICE International Business Companies Act No.45 of 2000 JMBA INVESTMENT FUND LTD. (the “Company”) Notice is hereby given that, in accordance with Section 138 (8) of the International Business Companies Act, No.45 of 2000, the Dissolution of JMBA INVESTMENT FUND LTD. has been completed, a Certificate of Dissolution has been issued and the Company has therefore been struck off the Register. The date of completion of the dissolution was the 13th day of October, 2016. Guilherme Kodja Tebecherani Liquidator
THE TRIBUNE FROM PAGE 1B
namely those Bahamians still struggling to rebuild their lives, and repair wind and water damaged homes. Tribune Business sources said the ‘hurricane tax’ proposal was discussed “briefly” by the Cabinet yesterday, but no decision was taken and further discussions have to take place. It is thought that not all Cabinet Ministers would be comfortable with such a move, although one idea being ‘floated’ was a socalled ‘sin tax’ on products such as alcohol and cigarettes. This has also been mooted as a means to finance the planned National Health Insurance (NHI) scheme. Mr McCartney, meanwhile, said the Government’s “lack of accountability and transparency” over how it was using the
Bran: New taxes ‘won’t dig us out’ of Matthew hole VAT monies meant it could not be trusted to implement any new or increased taxes. Expressing “fear” that the Government could use Matthew’s aftermath to increase VAT’s existing 7.5 per cent rate, the DNA leader added: “The fact we have a government who has not been accountable and transparent in their dealings with VAT to-date is reason enough not to have this imposition. “This government cannot be trusted to put more taxes on the backs of the people in this country. “No answers have been given to the country as
to what happened to the $600 million collected from VAT [for the first 11 months of 2015-2016]. “They are taxing us out of business, and taxing us out of being able to run this country efficiently. The drop in business since VAT was implemented two years ago is tremendous. Businesses have closed because of it, and others that were doing well are struggling.” Mr McCartney said the Government’s desperate search for financing postMatthew, with both revenue and borrowing solutions being mulled, showed it had “failed to learn the
Power loss leaves bed maker dozing
FROM PAGE 1B
plained. “If the power goes off for three to four hours we can cope with that. “I normally have enough stock where it’s not a problem, but we’re talking about a full two full weeks now; you can’t prepare for that. First of all, your margins are less than 10 per cent. We have some regenerators that can run some small stuff.” Cartwright’s Bedding, which was launched in 2010, manufactures bedding that it sells wholesale to several furniture and bedding supply stores, such as Imperial Mattress, Wood You Furniture, Bargain Wholesaler and Heastie’s Furniture. “Right now there is a strong demand for mattresses. A lot of people suffered roof damage and their mattresses got wet as a result, or as a result of storm surge, and I can’t supply them,” Mr Cartwright said. FROM PAGE 1B restore all existing businesses on the island, before they accept new applications.” Mr D’Aguilar, mindful of the need to restore all existing New Providence customers, said he did “not want to take them [BPL} away from working on restoring power to people’s houses”. Yet the inability to obtain a connection to BPL’s energy grid, which requires the installation of a meter, was “all part of the frustration level” being experienced by many Bahamian home and business owners. And with the economy needing every bit of help it can get to dig itself out from the devastation inflicted by Hurricane Matthew, the inability to provide timely electricity connections for new businesses further adds to the gloom. “All they’ve got to do is come and put a meter in,” Mr D’Aguilar said. “Thank God we put generator power in before the storm. I don’t know how many thousands of dollars it has cost me to keep the generator going, but it is what it is.” The Superwash chief,
“Imperial Mattress is running out of stock and I supply them, and they have their own employee over there,” he added, noting that he has kept his nine employees on the payroll despite the situation. Mr Cartwright said his direct competitor, Scottsdale Bedding, had given him some help as the business struggles with its operations under the circumstances. “The mattress springs come bundled and they allowed me to open the springs. I called them up and they allowed me to open the springs, and I must thank them for that,” he said of Scottsdale. “I have a small compressor here that I’m running, which allows me to build the mattress up to a point. I can work like this for a long time, but eventually I will run out of space and I need to actually sell something. I can’t finish the product; I can only take it to a point.”
BPL places new business connect requests on hold whose new laundromat covers 3,000 square feet of retail space, and 4,000 square feet of warehouse, told Tribune Business that it was “pitiful how slow BPL is moving” on restoration efforts. He disclosed that he was present at the dock today when 10 trucks belonging to BPL’s manager, PowerSecure International, received a police escort as they made their entrance to New Providence. “Here we are, almost at day 14, and the back up is just arriving now,” Mr D’Aguilar told Tribune Business. “It’s taken 14 days to get the back up.” PowerSecure, which has a five-year management contract to supervise BPL, worth a minimum $10 million and, potentially, $25 million, was acquired earlier this year for $431 million by the multi-billion utility giant, Southern Company. Many observers have questioned whether BPL was too slow in seeking
assistance from its management partner, and the latter’s owner, or if PowerSecure and Southern delayed. The latter two may also have been kept busy dealing with Matthew’s impact on their home states of Georgia and the Carolinas. Mr D’Aguilar, meanwhile, reiterated that his “biggest complaint” with BPL was its lack of communication, which left persons in the dark as to the areas it was currently working to restore. He again called for it to hold regular media and public briefings, using maps of New Providence to show where it was working and its progress, while also employing social media channels. “This lack of information has got people so frustrated, so angry, especially people in the eastern end of the island,” Mr D’Aguilar said. “I’ve been hearing horror stories from people in the east.”
VACANCY
Private offshore bank is seeking qualified candidates to fill the position of Senior Bank Officer II. The ideal candidate will report to the Senior Bank Officer I and will be primarily responsible for the Bank’s compliance with all regulatory, legal and tax requirements. Additionally he/she will be responsible for the management of the corporate and certain legal requirements on behalf of the Bank and the entities administered by the bank. Areas • • • • • • • • •
of responsibilities, skills, experience: Bachelor degree in Business Administration, Law or related field; at least 5 years of relevant experience as a Senior Bank Officer; Possess in-depth knowledge of Anti-Money Laundering Laws and Regulations – to include monitoring changes in Anti-Money Laundering legislation and updating policies and procedures as necessary; conducting checks and due diligence enquiries in respect to the operations of the Bank and its clients activities; Oversee the implementation, maintenance and execution of the compliance program to ensure compliance with regulatory authorities and application of best practices; Attending to requisite internal/external reporting and communications with regulators/headquarters; Implement screening controls of sanctions lists (e.g. OFAC, EU, UN, etc.) Proficient in the use of Microsoft applications; Good command of English and Portuguese languages; Accounting skills.
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lessons” from Hurricane Joaquin when it came to getting the Bahamas ready to withstand disasters from a financial perspective. And he cited Bahamas Junkanoo Carnival, on which the Government has spent close to $20 million in taxpayer monies over the past two years, as an example of its “fiscal irresponsibility and negligence”. Mr McCartney said the DNA was due to imminently release its “five steps” proposal for how it would deal with hurricane preparedness and relief efforts, and their financing. “We live in a hurricane zone, and anticipate this will not be the last in our lifetime,” he added of Matthew. “All of this falls on governments, past and present, for not preparing our country for these types of
Wednesday, October 19, 2016, PAGE 5
DNA leader Branville McCartney
catastrophes, these types of disasters. “It goes back to not being prepared, having a Third World mindset. “It goes back to the fact that we are always reactive.” Warning of impending doom, Mr MrCartney told
Tribune Business: “I pray to God that we are not having a conversation in a couple of years as to the devaluation of our dollar because of the short sighted way the Government is dealing with our economy, and the lack of accountability and transparency.”
PAGE 6, Wednesday, October 19, 2016
Tiny Belgian region holds up trade deal between EU-Canada LUXEMBOURG (AP) — A small region in Belgium will be standing up to the united might of the 28 European Union leaders this week, knowing its decision to reject a huge trade deal between the EU and Canada will bring the whole trans-Atlantic agreement down. Thanks to Belgium’s byzantine political system, Wallonia, a francophone region of 3.5 million people, has the power to force the national government to withhold its support for the trade deal, which was already backed by the rest of the EU. It used that power Tuesday — and since the agreement needs unanimity among EU states, the issue must now be tackled by the bloc’s leaders at a summit starting Thursday. “We stand alone,” said Belgian Foreign Minister Didier Reynders, himself a firm backer of the deal with a majority of Belgians. “We have an agreement of 27 member states. I can even say 27.5 or 27.6.” If Wallonia’s reservations are not dealt with then, an EU-Canada summit and the official signing ceremony scheduled for Oct. 27 would have to be canceled, leaving Belgium — and Europe — red-faced with embarrassment. “It is a very important moment not only for a very important EU policy, foreign trade, but also for Belgium,” said Reynders. Wallonia, with a population of 3.5 million, wants more guarantees to protect its farmers and Europe’s high labour, environmental and consumer standard. It also fears the agreement will allow huge multinationals — first from Canada, later from the United States, if a similar deal with
THE TRIBUNE Protestors place banners in front of an inflatable Trojan horse outside a meeting venue of EU trade ministers at the EU Council building in Luxembourg. European Union trade ministers have been meeting this week to discuss the Comprehensive Economic and Trade Agreement between the EU and Canada. (AP Photo/Olivier Matthys)
“We stand alone. We have an agreement of 27 member states. I can even say 27.5 or 27.6. It is a very important moment not only for a very important EU policy, foreign trade, but also for Belgium.” Belgian Foreign Minister Didier Reynders Washington follows — that would crush small Walloon enterprises and their way of life. Proponents say the deal would yield billions in added trade through tariff cuts and other measures to lower barriers to commerce. At the same time, the EU says it will keep in place the region’s strong safeguards on social, environmental and labor issues. Wallonia’s rejection left many stumped, even within Belgium, wondering how such a small region could have such an impact on a deal between over 500 million EU citizens and 35 million Canadians. “If we don’t agree with Canada, with whom are we going to agree? I don’t understand,” said Slovak Economics Minister Peter Ziga, who chaired Tuesday’s meeting. “Quite frankly, I cannot imagine that the final stumbling block would be Belgium,” Ziga said, recalling the nation’s free trade credentials and its cultural proximity to Canada, another multilingual country with much francophone influence. EU countries fear that the bloc will lose credibil-
ity if a deal of this size can be derailed by a member state’s single region. Tuesday’s initial deadline for the so-called Comprehensive Economic and Trade Agreement with Canada was missed after Wallonia Minister President Paul Magnette raised objections. “We will need a few more days,” he said late Monday. Germany remained confident that the deal would eventually be approved. “I don’t think that the agreement can fail,” Economy Minister Sigmar Gabriel said. Even if some other EU nations don’t feel fully comfortable with the agreement, it is only Belgium’s approval that is missing, officials said. Canada’s International Trade Minister Chrystia Freeland told reporters in Ottawa that she remained “cautiously optimistic” about the deal. “But at this point the ball is very much in the European court.” “We’re working hard with the Europeans ... Everyone I talked to today said: ‘Hang on in there, we believe this is going to happen.’” Reynders fully backed Freeland. “I am ready day and night to work to find a solution,” he said.
A protestor holds a sign during a demonstration against international trade agreements in Brussels. The Belgian provide of Wallonia is proving how difficult it is for the European Union to set policy for its 28 nations. A landmark trade deal with Canada is at the mercy this week of a decision in Belgium’s sub-region of a few million. (AP Photo/Virginia Mayo)
Yahoo stumbles again in 3Q, raising stakes on Verizon deal SAN FRANCISCO (AP) — Yahoo stumbled through another rough patch in the third quarter, ramping up the pressure on the slumping internet company to complete its $4.8 billion sale to Verizon Communications. The results released Tuesday represented Yahoo’s first financial update since announcing in late July its deal to sell its digital operations to Verizon. The numbers showed Yahoo is profiting from a costcutting programme that has jettisoned 2,200 workers, or about one-fifth of its workforce, during the past year. The Sunnyvale, California, company earned $163 million, or 17 cents per share, more than doubling from the same time last year. But Yahoo’s revenue plunged 14 percent to $857 million after subtracting advertising commissions for the period covering July through September. It marks the fourth consecutive quarter that Yahoo’s net revenue has dropped by at least 10 percent, a trend that management forecast
will extend into the final three months of this year. The ongoing erosion won’t as matter as long as Yahoo can still fall into Verizon’s arms. The Verizon deal was put in jeopardy in late September when Yahoo disclosed that hackers had broken into its data centres and stolen email addresses, birth dates, answers to security questions, and other personal information from at least 500 million user accounts. News of the breach raised the specter that people would become leery of Yahoo, causing them to use its services less frequently or abandon them entirely. If that were to happen, Yahoo’s email and other online operations including sections devoted to news, sports, finance and entertainment would be worth less to Verizon than the $4.8 billion sale price. As part of its earnings report, Yahoo also published charts showing usage of its services has held steady since the company dropped its bombshell.
NOTICE
NOTICE is hereby given that SHEILA PETIT-PHAR of Calton Point, Treasure Cay, Abaco, Bahamas is applying to the Minister responsible for Nationality and Citizenship, for registration/naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/ naturalization should not be granted, should send a written and signed statement of the facts within twenty-eight days from the 12th day of October, 2016 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, Bahamas.
NOTICE
NOTICE is hereby given that KENESSEA SCOTT of Hillside Estate off Mackey St., P.O.Box N-8902, New Providence, Bahamas is applying to the Minister responsible for Nationality and Citizenship, for registration/naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/naturalization should not be granted, should send a written and signed statement of the facts within twenty-eight days from the 19th day of October, 2016 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, Bahamas.
THE TRIBUNE
Wednesday, October 19, 2016, PAGE 7
Ford cutting production as US demand slows DETROIT (AP) — Ford Motor Co. is cutting production as U.S. demand for new vehicles slows, but so far, its rivals aren’t doing the same. Ford said Tuesday it will temporarily idle four of its North American assembly plants this month to better align production with demand. After six straight years of growth, U.S. sales of new vehicles are slowing. In the first nine months of this year, U.S. sales totaled 13.1 million new vehicles, up less than 1 percent from 2015. “This is a roller coaster that’s gone to the top,” said Mike Harley, an analyst with Kelley Blue Book. “I wouldn’t be surprised if other automakers follow suit.”
Trucks But sales are still near last year’s record-high levels, and so far, Ford’s chief rivals are sticking to their production plans. General Motors Co. and Fiat Chrysler Automobiles both said Tuesday that all of their plants are operating normally. Toyota Motor Corp. said last month that it plans to increase production of Tacoma pickup trucks at its plant in Baja California, Mexico. Toyota is adding 400 workers and investing $150 million in the plant by 2018. Dearborn-based Ford warned in July that U.S. sales to individual, nonfleet buyers would likely decline in the second half of this year. Pent-up demand that accumulated
during the recession has been satisfied. At the same time, more used cars are hitting the market, competing with new cars for buyers’ attention. Harley said automakers have to trim extra inventory when there’s nowhere else to put it.
Supply In September, Ford had 78 days’ supply of vehicles on dealers’ lots, while its luxury Lincoln brand had 101 days’ supply, according to Ward’s AutoInfoBank. The industry average was 65 days. “You need to turn off the faucet so you don’t flood the yard,” Harley said. Ford has scheduled oneweek closures for plants in Kansas City, Missouri, and Hermosillo and Cuatitlan, Mexico. Those plants make the F-150 pickup truck, the Fusion sedan and the Fiesta subcompact. It also scheduled two weeks of down time for its Louisville, Kentucky, plant, which makes the Ford Escape and Lincoln MKC small SUVs. Ford Escape sales were up 1 percent in the first nine months of this year, while F-Series pickup sales were up 6 percent. But sales of both vehicles were down in September. Ford says the cuts won’t impact its financial guidance. It still expects a pretax profit of $10.2 billion this year. Ford’s shares fell 9 cents to $11.79 in afternoon trading Tuesday.
A worker inspects a new aluminum-alloy body Ford F-150 truck at the company’s Kansas City Assembly Plant, in Claycomo, Mo. (above) and (below) a worker prepares a chassis to receive an engine. Ford Motor Co. is temporarily idling four North American plants in response to slowing consumer demand for new vehicles. (AP)
PAGE 8, Wednesday, October 19, 2016
THE TRIBUNE
US stocks rebound on strong company earnings; oil rises Surprisingly strong earnings from Netflix, UnitedHealth Group and other companies put investors in a buying mood Tuesday, driving U.S. stocks solidly higher. Health care stocks led the gainers. Materials, utilities and a broad swath of other companies also posted gains. Industrials and consumer-focused stocks notched the smallest gains. Energy stocks also rose as the price of crude oil recovered from an earlier slide. The rally wiped out the market’s losses from the day before. “We’ve had five consecutive quarters of negative earnings, and this one looks like we’re going to squeak out a positive, which is very good for the market,” said Doug Cote, chief market strategist for Voya Investment Management. “Earnings are coming in better, and some much better, than expected.” The Dow Jones industrial average gained 75.54 points, or 0.4 percent, to 18,161.94. Standard & Poor’s 500 index rose 13.10 points, or 0.6 percent, to 2,139.60. The Nasdaq composite index added 44.01 points, or 0.9 percent, to 5,243.84. Investors are poring over company earnings reports to gauge the market’s prospects for growth in coming months and get a better handle on the state of the economy. About 80 of the compa-
“We’ve had five consecutive quarters of negative earnings, and this one looks like we’re going to squeak out a positive, which is very good for the market.” Doug Cote, chief market strategist for Voya Investment Management nies in the S&P 500 were scheduled to report quarterly results this week. So far, about 10 percent have done so since the latest reporting period began last week.
Forecast Earnings for the third quarter are projected be down about 1.1 percent overall from a year ago, according to S&P Global Market Intelligence. That forecast is largely due to the energy sector, which has been hard hit by falling energy prices. While it’s still early, some market watchers are encouraged by the results so far. “It looks like corporate earnings certainly could start to trend positive,” Cote said. “Fundamentals drive markets and positive earnings are a necessary precursor for this bull market to continue.” Health care, which has been the worst performing sector this year, notched the biggest gain Tuesday, 1.1 percent. It remains down 2.6 percent this year.
Investors bid up shares in several companies in the sector, including UnitedHealth Group. The nation’s largest health insurer climbed 6.9 percent after its profit swelled 23 percent to nearly $2 billion in the third quarter. The company also increased its 2016 earnings forecast. The stock rose $9.26 to $143.39. Netflix surged 19 percent a day after the video streaming service reported earnings that were far better than analysts were expecting. The company noted it grew its domestic and international subscribers during the quarter. The stock added $18.99 to $118.79. Domino’s Pizza jumped 4.9 percent after the company delivered a 25 percent jump in quarterly profit as sales rose. The stock gained $7.44 to $159.45. Del Taco Restaurants climbed 8.8 percent after the restaurant chain served up solid sales in the third quarter. It also raised its annual profit and revenue projec-
Pedestrians pass the New York Stock Exchange. (AP)
tions. The stock added $1.11 to $13.74. Banks, several of which reported strong earnings last Friday, continued to deliver strong quarterly results.
Trading Goldman Sachs rose 2.1 percent after growth in its trading and investment business helped lift earnings. The stock added $3.63 to $172.63. Comerica also posted better-than-expected quarterly results. The lender climbed $1.99, or 4.1 percent, to $50.05. Some companies reported improved results but missed on their earnings forecasts. IBM slid 2.6 percent a day after issuing a fullyear earnings outlook that
fell short of what analysts were expecting. The stock fell $4.05 to $150.72. U.S. benchmark crude oil rose 35 cents, or 0.7 percent, to close at $50.29 a barrel in New York. Brent crude, the international standard, gained 16 cents, or 0.3 percent, to close at $51.68 a barrel in London. Other energy futures also eked out small gains. Wholesale gasoline inched up a penny to $1.51 a gallon. Heating oil was little changed at $1.57 a gallon. Natural gas rose 2 cents to $3.26 per 1,000 cubic feet. The major stock indexes in Europe also rebounded Tuesday. Germany’s DAX rose 1.2 percent, while the CAC-40 in France gained 1.3 percent. The FTSE 100 index
of leading British shares rose 2 percent. Several stock markets in Asia also pushed higher. Japan’s Nikkei 225 added 0.4 percent, while South Korea’s Kospi gained 0.6 percent. Hong Kong’s Hang Seng index jumped 1.6 percent. Australia’s S&P/ASX 200 rose 0.4 percent. In metals trading, the price of gold rose $6.30 to $1,262.90 an ounce, while silver added 16 cents to $17.64 an ounce. Copper was little changed at $2.11 a pound. Bond prices rose. The yield on the 10-year Treasury note fell to 1.74 percent from 1.77 late Monday. In currency markets, the dollar strengthened to 103.89 yen from 103.85 on Monday, while the euro weakened to $1.0977 from $1.0997.
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