Last year The Bahamas Government bought a failing hotel in Freeport, Grand Bahama to help rescue the economy up there. Some six months later, if we are honest we really don't know how and if the government can "flip" the property to a private investor.
The wider issues discussed in this post from last year remain relevant, and now we must provide a thorough accounting of the tax dollars spent to date in an effort to complete a tax benefit analysis.
If nothing else it will help future policy makers with their decision making.
Politicians get caught in a whirlwind of opinion (sometimes of their own making) to prove their "concern" for the people of Grand Bahama by rejuvenating the economy but does buying a defunct hotel meet that objective? Of course it doesn't.
Sure a "grand project" like buying a bankrupt hotel gives the impression the government is "concerned and helping" while in reality it is increasing the future tax burden for everyone.
So what pray tell is the answer?
To summarise Josef Filipowicz and Steve Lafleur from this article:
To start, simplified, across-the-board tax policy and a reduced regulatory burden is a better approach.
The web of red tape businesses have to face "means more resources allocated to regulatory compliance and less allocated to growing their businesses. By streamlining or reducing regulation, government can help firms focus on what matters—creating jobs and growing the economy."
Of course these moves are met with crowing from political opponents but the governments role is setting policies to attract business, local or foreign, that results in jobs and a growing economy.
"...They can also help even the playing field between small businesses and larger ones, as larger businesses are better resourced to navigate complex regulations. Rather than helping today’s corporate giants, why not encourage tomorrow’s?"
The results might not been seen over night, but if building a more equitable future is what politics is about, these few policy changes will go a long way.
Interesting Policy Analysis:
How "Market Failure" Arguments Lead to Misguided Policy by Ryan Bourne...
