Government pensions are a ticking time bomb. But as long as the political parties use the civil servants as a vote farm, it does not matter how much VAT money we raise – it will not fill the hole that continues to grow beneath our country’s feet.
KPMG, an accounting firm that reviews the government’s fiscal policies, noted that there is no fund in place to pay the current pension benefits, let alone the growing amount of pensioners in the coming years. We pay retired government employees directly out of the Treasury in a haphazard pay-as-they-come system. By 2022 the deficit will be $2.5 billion. $4.1 billion by 2032.
Our country’s current sovereign debt is ~$6 Billion. That means you owe about $15,000 for borrowing our government has deemed necessary. Do you trust your $15,000 is being spent the right way? Well, you can’t be sure because we don’t have a Freedom of Information Act. And when the government rolls out the new health care system next year you will owe even more on top of new taxes.
Our nation has evolved beyond a system of voting for our uncles and cousins. We have outgrown pledging our allegiance to job handouts. We have outrun the lumbering, political beast that has employed only three Prime Ministers in 40 years.
There is a $1.5 billion (with a “B”) deficit for public employee pensions. And it’s growing.
It will continue to grow because the money to pay the current employees is not there. We will have to borrow more. It will continue to grow because the parties will continue to add to the public servant ranks to ensure votes. We will have to borrow more. It will continue to grow because the politicians have bound themselves to a billion dollar, inefficient workforce that guarantees a 50% chance at being reelected.
We eventually will not be able to borrow more.
Are there public employees that do an excellent job? Absolutely. Are there necessary departments and workers that better Bahamian lives? Absolutely. Should the public sector be a storage tank for votes? Absolutely not.
Our government has created a multi-billion dollar fire. The solution is not to throw more fuel onto it.
The solution is to control the fire. Reduce it. Give it less to burn. Will the immediate effect of quenching the fire make things colder? Yes. But we won’t have to worry about it burning our country to the ground.
Ask your government to make the hard decision. It’s an easy decision for the taxpayer, obviously, but hard for those who, in doing so, will be committing political suicide.
But do not let them burn away our children’s future simply for another five years.