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Culture Clash: How You Can Prepare for the Arrival of VAT

Value Added Tax will be increased to twelve percent in a matter of days, and many of us are still trying to figure out how to make it work. Adjustments have to be made, some on a daily basis, but this does not mean we have to be uncomfortable. It means we have to plan, and we have to look at what we have.

Some people do not like to look at their money. Sure, they cash checks, make withdrawals, and make cash transactions, but they do not like to count the money they have and face what it means for their lives and lifestyles. They avoid it, at almost any cost.

When is the last time you checked your account balances? Do you know how much cash you have in your wallet and stashed in other locations?

Some of it could be laziness, but the reluctance to check balances is most often linked to fear and discomfort with facing the reality real numbers force upon us. If you know you have two hundred dollars for the next month, you may be forced to make some decisions about what and where you will be eating, how you will get around, and which invitations you can accept. If you do not know there is only two hundred dollars left in your wallet, you can go for sushi three times in ten days, grocery shop without a plan, and pick up that layaway without stress. Not knowing is false freedom, and it can feel good. Until the consequences creep up.

How are you approaching the twelve percent VAT and its impact on your purchasing power? Do you plan to operate as usual until you run out of money, or are you making a plan?

Changing the mindset

It may be helpful to view the increase in VAT as a pay cut. It has the same effect. You will not be able to buy the same items in the same quantity as before. Once you come to this realization, having a plan will probably feel more important.

It is a good idea to spend some time on a budget. No, budgeting is not fun for most people, but it can significantly reduce stress. Start with your income, then assess your necessities including your mortgage or rent and payments on debt. Keep in mind that every monthly bill is not a necessity. Yes, this is a direct attack on cable television, Netflix, and other subscriptions. These are luxuries and they belong in a separate column so you can identify them easily if and when you need to make adjustments to your spending.

Negotiating and eliminating expenses

What can you spend less on? If you usually buy lunch, figure out how many days you need to take lunch to work instead. You can not negotiate necessities, but how can you reduce the cost? Maybe it is time to move into a less expensive apartment or get a roommate. We all need grocery and sometimes we need to get that hard-to-find ingredient, but we do not need to buy everything from the most expensive store.

One of the ways we can begin to work around VAT, eat better, and live more sustainably is growing our own food. We may not be able to produce everything for ourselves, but we can at least grow fruit, vegetables, and herbs. It does not have to take up a lot of space, and there are even options for people living in apartments with no ability to plant in the ground. A few years ago, I bought a hanging garden from a friend who put them together for clients. The twelve plants included green pepper, onion, Bahamian spinach, and rosemary. I hung it on a fence, watered it as instructed, and watched my food grow. The next year, I sourced my own seeds and seedlings and set about it again. There is really no satisfaction like eating food you have grown yourself, VAT-free. We all know people who garden. Talk to them, ask for a little something to get started, and get to work.

Let’s make a deal

On the same day the 60 percent increase in VAT was announced, bartering became a serious topic among groups of friends and acquaintances. Bartering is not over. Many people barter all the time without realizing it. Civil society organizations often exchange meals for hours of service. People do not mind spending an hour or two at a booth or packing welcome bags if they get lunch and a networking opportunity in exchange. People in the beauty industry exchange services among themselves — a massage for makeup application, for example. No money is exchanged, but two parties exchange products and services of equal value. This is bartering, and it is time to be more intentional about it. What do you need, and what you can provide in exchange? Check out the bartering groups on Facebook, start the conversation within your own networks, and reduce the amount of money you spend on services when you can trade skills.

Sacrifice to save

Saving money is difficult under any circumstances. No one really wants to set money aside for short-term or long-term savings instead of spending it on immediate desires. Many of us are living hand-to-mouth with little or no room to save. Where saving is a possibility, it definitely requires lifestyle changes. If you can afford to buy a hot beverage every day on the way to work, you can save. If you can drive to and from work every day, you can save. It may not been convenient, and it may cramp your style, but you can do it. Make your morning beverage at home, put that café money in a jar every day, and deposit it monthly. Carpool with your family members, friends, and coworkers. It could be part of a go-green initiative at the office, or a way to catch up with the cousins you never find the time to meet. This may not be something you do all the time, but it is an option for reducing spending on gas.

There are a number of saving strategies that come up with a quick online search. A popular one is never spending five dollar bills. Any time you get a five dollar bill in change, you put it in a separate section of your wallet or a different pocket, then deposit it to a container or account. Do this for a year, and see how much you save. If you are inclined to open a savings account, check out the credit unions. They offer far better interest rates and service than commercial banks, and the asue accounts are definitely worth consideration.

Community

We are all paying the same VAT, but we all have different income levels. No matter how much we would like to think we are all in the same boat, we are not. Women and approximately twelve percent of people in The Bahamas living below the poverty line are disproportionately affected. Some can not even begin to think about budgets or saving. Look out for them.

This unfortunate increase is coming, but maybe a better sense of community and willingness to help one another can come with it. Can you help someone start a business? Maybe you have raw material to help them get started, a space they can work from, or money they can pay back in service. Check in with your loved ones. Make strategies for dealing with the VAT increase a community effort. Grow food together. Exchange goods and services. Start a savings challenge. Let’s get creative.

Published in The Tribune on June 27, 2018.

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Culture Clash: The Lessons We Can Learn from the Budget

The world of partisan politics is never dull. The Budget Communication certainly makes for a lively few weeks, full of debate, pontification, and a range of emotions. It is probably the time we are most attentive to the government and political maneuverings aside from election season. It gives insight into the real agenda of administrations and reveals values like nothing else. In their contributions, our representatives show us, in practice, what is important to them. They speak to specific parts of the budget as we listen for signs that they are just another cog in the wheel, or thinking representative giving due consideration to the everyday realities of our lives before taking a position.

More information please

The 2018-2019 budget could keep us talking for days on end. The controversy and confusion that arise from the budget debate often lead to conversations, arguments, research, and critical thinking, increasing our knowledge and understanding of governance and government. Other events — like the vote of no confidence by the rebel seven in 2016 — become practical teaching tools and open our eyes to what was previously unknown. Many of us only recently learned that the official Leader of the Opposition in Parliament is not necessarily the opposition party leader. We are learning as we go.

How is that working for us?

Sure, there is always more to learn. Yes, it is great that we are able to start and sustain conversations in the aftermath of political events that lead to an expansion of individual and national knowledge, but are we figuring it all out too late, and too piecemeal?

We are in desperate need of a national civics lesson. Yes, some schools have civics class, but not all of them. It should be a requirement at every school in The Bahamas. If we can give five-year-olds projects on the governor generals of The Bahamas, we can offer civic education to school-age children. There should be educational programming on television and radio, supplements in newspapers, open online courses, and resources in public libraries. If political parties and candidates can go door-to-door with their paraphernalia, they can make information about the Westminster system, political history, and governance easily accessible to every Bahamian resident.

Voting against party position

Over the past few days, we have been talking about the four FNM Members of Parliament who voted no on the bill to increase Value Added Tax to twelve percent. Golden Isles MP Vaughn Miller, Pineridge MP Frederick McAlpine, Bain and Grants Town MP Travis Robinson and Centreville MP Reece Chipman did not support the VAT increase, and seven other FNM Members of Parliament did not show up to vote. This came after Attorney General Carl Bethel said “the whip is on” and suggested to anyone voting no, “you may as well tender your resignation at the same time that you vote with the opposition.”

Many people of varied political allegiances expressed disdain, shock, and disappointment at the Prime Ministers actions yesterday. Robinson and Miller were terminated from their parliamentary secretary positions at Ministry of Tourism and Aviation and Ministry of Social Services respectively, and McAlpine was terminated from his position as chairman of the Hotel Corporation. Their termination letters referred to Part III, Section 21 of the Manual of Cabinet and Ministry Procedure.

Following their budget contributions, it was made clear to these Members of Parliament that they had a decision to make. They could support the budget in its entirety, including relevant bills, and keep their appointments or they could represent their constituents by not supporting every aspect of the budget and be terminated. They chose to stand for the people, knowing the consequences stipulated by the Westminster system.

The Minnis mistake

Minnis is obviously trying to look strong. He is opposed to compromise. He is not interested in engaging the press, or communicating with the Bahamian people. He wants to eat lunch. He disappears and goes quiet, pushing other people to the fore. Maybe he thinks we will not see him as the bad guy. Maybe he thinks if he is not the one to deliver the bad news, we will not know where it came from. One thing is certain — he does not take kindly to being opposed, questioned, or criticized. That is too bad, especially since opposition, questions, and criticism could be instructive, especially for someone so clearly out of touch.

Minnis does not seem to understand the implications of the budget. He has not grasped the fact that the Bahamian people are not interested in any of the spins being offered. We are especially not going to accept the idea that we have to suffer now to benefit later.

Minnis said, ”My budget is not necessarily about VAT. My budget is more about a better tomorrow for the young people of this country, the future.”

In two sentences, he took ownership of the budget, demonstrated his lack of awareness of the general understanding of the budget and the most dominant component, and suggested that there is a focus on youth and the future. There is too much in that statement to refute here and now, but young people are not buying it; especially not after Robinson’s termination yesterday.

The Robinson effect

Many people are confused by what has taken place. Some are likening Minnis to dictators and fascists. There have been numerous questions about the validity of this move, whether or not it was necessary, and possible loopholes. More than anyone else, Travis Robinson has the attention of the Bahamian people — especially young people. For many, his termination feels like a punch to the gut. We have to remember, however, that he remains the representative for Bain and Grants Towns, that was what he wanted at the beginning, and his current situation is the outcome of fulfilling his duty to the people of that constituency. He has done what many others have failed to do. He consulted with his constituents and spoke on their behalf, even when it was to his own detriment. He has proven that a young person who is new to politics and has been courted by a major political party can truly represent the people.

What will this do for Bahamian politics? Maybe we will see a wave of more inspired leaders and leadership emerge. There could be new boldness. Perhaps we can expect present and future Members of Parliament to give careful consideration to everything put before them, consult with constituents, and truly work for them rather than the party. We may get representatives who care more about our communities than their own titles and salaries. Didn’t this seem unrealistic a short time ago?

Whether or not we see change, incremental or substantial, in the practice of politics depends on more than one person. Travis Robinson, at the very least, took a risk. What about us? What is our response going to be? Beyond the initial social media posts and paraphrasing of what others have said, what are we going to do?

At this point, our action is just as important as his. If we want to see more representatives truly representing us, we have to show it with our support. That means resisting the urge to make jokes about his lost income, and going beyond the lazy explain-it-away method of posting a screenshot of the relevant Westminster rule or section of the cabinet manual. Okay, the system brought us here. What now? What of that system? Is it serving us?

We talk about democracy in very general terms, and most of us have done very little to learn more about it. We go through the motions of a specific part of democracy. We vote every five years, and spend all the time in between making threats about what we will do with our one vote when the time comes again. Democracy is and must be more than that. We have to be able to talk about what it has and has not been for us, and co-create a better functioning democracy that goes beyond a vote. We can have our say on any day at any time, if only we learn to tap into the power of the collective. When we do, as Progressive Liberal Party Deputy Leader Chester Cooper put it, “The day of reckoning is going to come. And that is the beauty of democracy.”

Published in The Tribune on June 20, 2018.

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Culture Clash: Why VAT rise hits hardest for the people who can least afford it

Bahamians tuned in to the Budget Communication in Parliament last week Wednesday with great interest. After laying out a number of supposed benefits to the Bahamian people, Minister of Finance Peter Turnquest showed the price tag. The FNM administration intends to increase Value Added Tax (VAT) by 60 percent, taking it up from 7.5 percent to 12 percent on July 1. It expects this tax hike to increase revenue by $400 million in the next fiscal year.

In a press conference, Turnquest suggested this is the best way to pay off arrears left by the former administration of approximately $360 million. He insisted that the government is doing the right thing by being honest with the Bahamian people as opposed to presenting a misleading budget and delaying pay day.

Under-budget or increase taxes. These are clearly not the only options. This administration is depending on us to play into the stereotype of “lazy” and “D-average” so it can do as it sees fit with little to no pushback.

Even if VAT is the best option for The Bahamas, it would have been more transparent — a term the FNM enjoyed using before May 2017 — and shown a commitment to more participatory governance to share the details of its financial concerns with the people before this point. It would have been easier to understand this decision if we had been provided with this information before the Budget Communication and had the opportunity to offer ideas. The people sitting in Parliament are, after all, our representatives and not a collective dictatorship.

Flip-flop

Over the past few days, many people have quoted the 2016 version of Dr. Hubert Minnis who said, “I don’t believe in increasing taxes, I believe in decreasing taxes and increasing opportunities. Increasing taxes is a lazy way out. When you don’t want to think, you just tax.”

In 2013, Dr. Minnis said the PLP should share its economic studies and analyses as well as alternatives it considered with the Bahamian people. Today, the Bahamian people are making the same request. We want to know how this administration came to the conclusion that a 60% increase in VAT is best for the country. We also want to see the other options that were under consideration, why they failed, and how the administration arrived at this conclusion. Hearing from the Prime Minister on his change in position would be welcome as well.

VAT and Customs Duty

In the Budget Communication, it was announced that Customs exemption would be increased from $300 to $500, twice per year. There is also a reduction in Customs duty on new small cars and excise duty on new electric and hybrid cars under $50,000 in value. Neither of these benefit the poor.

We learned that VAT will not be applied to bread basket items. These include rice, flour, grits, cheese, butter, cooking oil, milk, evaporated milk, soups, and mustard. Concerns have been raised about the lack of healthy options on the bread basket list, and Minister of Health Dr. Duane Sands suggested more items, including fresh produce, will be added. VAT is also being waived from electricity bills below $100 and water bills below $50 impacting 30,000 and 43,000 people respectively — close to the 40,000 reportedly living in poverty. This measure, clearly meant for the poor, still does not bringing balance when we are looking at 12% VAT on everything else. The 2013 Household and Expenditure Survey showed 12.8% of the population in The Bahamas is living in poverty — on less than $5,000 per year.

What is poverty?

We need to understand what it means to be poor. Poverty is not the inability to purchase a particular brand of cellphone. It is not making the decision to attend a community college instead of a well-known university. It is not driving a 2010 Honda Civic. It is not being a college student and living with your parents. It is not a situation you can see your way out of at any given time. It is not a decision or series of decisions you consider prudent or responsible. It is having $5000 per year, and being unable to make decisions that do not fit that budget. Poverty is not a choice, and it is not about choices. It is not the result of working less, or working less hard.

Poverty is a systemic issue, and a monster we continue to feed with unilateral decisions like VAT and VAT increases and discriminatory practices. It is an issue we trivialize and makes jokes about when we hear about VAT going up and declare ourselves “poor” because we may not be able to go to crossfit any more. Not being able to benefit from the elimination of duty on airplanes does not make you poor, and jokes about it are lazy and D-average. Dine on the Line — an awareness campaign in which participants spend $4 on food every day — was last week, and maybe we should we have an exercise of doing everything else on the line for a month. Can you live on $11.64 per day? And no, 12% VAT is not likely to force many of us below the poverty line, but think about what it means for those already living in poverty. The reality of the over-burdened Bahamians living in poverty is not a punchline, and we do not need that kind of comic relief.

Equal, but not fair

The general conversation about the increase in VAT has revealed what we do and do not understand. It has been made clear, repeatedly, that the privilege some of us enjoy helps us to ignore or be completely unaware of the challenges other people face.

VAT is paid by all, but our experiences are not the same. We are not all in the same situation. VAT is a regressive — as opposed to progressive — tax. It is not higher for people with higher income. VAT is flat, so everyone pays the same rate, but it is not equitable. Middle class and poor people pay a larger proportion of their income in taxes through VAT. Though everyone is paying the same tax on individual items, the effect is different.

There is a popular pair of images used to show the difference between equality and equity. There are three people of different heights trying to watch a game over a fence, and there are three boxes they can stand on. In the first image, they each get one box. The shortest person still cannot see the game at all while the other two can. That is equality. In the second image, the tallest person does not get a box, and the shortest person gets two. In this image, they are all able to see and enjoy the game. That is equity.

What if taxation was equitable? What if the government found a way to alleviate the burden that has always been on the poor? What if we, as citizens, cared enough to look for alternatives to the quick fixes our representatives find and implement?

What we need

Fiscal responsibility is critical. We know the government needs money to provide services, from education and health care to road repairs and waste disposal. None of this is free, and the government needs a source of revenue. It does not, however, need to disproportionately burden the poor to meet its needs. It does not need to keep financial records and decisions out of our reach.

This administration needs to recognize that while the people did not necessarily vote FNM as much as it voted anti-PLP, there were expectations. Expectations of accountability. Transparency. An understanding that the Bahamian people are not interested in being blissfully unaware of the government action and inaction. We expect to be involved, and to have the opportunity to contribute, critique, co-create the systems and programs we need and demand.

We need to have a conversation about wages. Over the past few days, many have talked about the need to increase minimum wage, but that comes with its own effects. Even so, it is time to talk about a living wage so every working person can afford adequate food, shelter, and other physiological needs.

VAT is in the spotlight. No one wants to hear about taxes, much less increased taxes. We can agree on taxes, bills, and poverty. We do not want them, but they exist. Let’s be honest with ourselves and each other and not only these issues for ourselves, but use our power as a people to call on our representatives to stand with us, regardless of class or color.

Published in The Tribune on June 6, 2018.