FNM Would Have To Increase Taxes To Pay For Campaign Promises, Independent Fiscal Analysis Finds

Economists warn the opposition’s platform cannot be delivered at current tax rates; FNM has not released a fiscal framework or identified funding sources for any of its announced commitments

By The Bahamas Herald Investigations Desk

NASSAU — A line-by-line fiscal analysis of the Free National Movement’s campaign platform, launched at Baha Mar on Saturday night, reveals that the party’s combined policy commitments would require an estimated $600 million to $900 million in new annual government spending, approximately $400 million to $500 million in capital expenditure, and would simultaneously eliminate $30 million to $60 million per year in existing tax revenue through proposed concessions.

The findings, based on a review of government budget documents, consultant reports commissioned by the Bahamian government, regional programme cost benchmarks, and the FNM’s own publicly stated commitments, suggest the opposition’s platform cannot be delivered within the current fiscal envelope and would likely require either significant tax increases, deep cuts to existing government programmes, or large-scale reductions in the public workforce.

The FNM has not publicly released a costed fiscal framework, a revenue strategy, or a phased implementation timeline for any of its announced commitments. Repeated requests by the Herald for comment from the FNM’s campaign office were not returned by publication time.

HEALTHCARE: $200 MILLION TO $350 MILLION IN NEW ANNUAL COSTS

The FNM’s most expensive single commitment is the expansion of National Health Insurance to universal coverage, including catastrophic care, cancer treatment, and maternity services. Government-commissioned consultants from Sanigest Internacional previously estimated that full universal NHI would cost between $362 million and $633 million annually. The NHI Authority’s current budget allocation stands at $48.2 million for fiscal year 2025/2026.

The government’s own National Health Strategy Report for 2026 to 2030, obtained by the Tribune in December 2025, warns that the existing system already faces a projected $24 million deficit by fiscal year 2026 at current service levels. The FNM’s proposal to expand coverage to include catastrophic care, cancer treatment, and maternity would add at minimum $150 million to $250 million in annual costs, according to projections contained in that report and the original Sanigest estimates.

The party also committed to paying all outstanding debts owed to NHI providers, increasing nursing pay across the public system, providing housing and technology allowances for nurses, and developing a comprehensive health workforce recruitment and retention plan. The public health system employs approximately 2,800 nurses. A workforce package of the scope described would add an estimated $40 million to $60 million in recurring annual expenditure.

Additionally, the FNM promised to redevelop Princess Margaret Hospital on its current campus, deliver a new multi-storey medical, surgical, maternal, and child health facility, and expand and modernize Rand Memorial Hospital in Freeport. The current administration’s borrowing resolution for the Perpall Tract specialty hospital alone is $201 million, with total project costs estimated at $267 million. Industry sources estimate the Rand Memorial modernization at $150 million to $200 million. Combined debt service on hospital borrowing of this magnitude would add $30 million to $45 million per year in recurrent costs at prevailing sovereign lending rates.

EDUCATION: $65 MILLION TO $105 MILLION PER YEAR

The FNM pledged to make pre-primary education universal, providing free preschool for every Bahamian child. Department of Statistics population data indicate there are approximately 8,000 to 10,000 children in the three-to-four-year-old cohort nationally.

The FNM’s own predecessor government introduced a limited preschool voucher programme in 2019 at $2,000 per child for 500 to 1,000 students. However, that programme did not include dedicated facilities, teacher recruitment, meals, or transport. A universal programme with purpose-built classrooms across every inhabited island, qualified early childhood educators, daily meals, and student transport would cost significantly more. International benchmarks from UNICEF and the Penn Wharton Budget Model estimate per-child costs of $5,000 to $8,000 for quality delivery in small island developing states. Applied to the Bahamian cohort, this implies annual recurrent costs of $50 million to $80 million, plus substantial one-time capital expenditure for new facilities on Family Islands that currently have none.

The party also promised a phased national school bus system beginning with free public bus rides for uniformed students. Fleet acquisition, fuel, maintenance, driver wages, and route infrastructure across multiple islands suggest a steady-state annual cost of $15 million to $25 million.

BUSINESS AND CULTURE: $55 MILLION TO $65 MILLION PER YEAR

The FNM committed $100 million for direct investment in Bahamian entrepreneurs and a separate $100 million over five years for businesses in the cultural and creative economy, including live Bahamian music, Junkanoo, theatrical productions, and dance. These two commitments alone represent $40 million per year in programme disbursements.

The party also pledged to refurbish the National Performing Arts Centre to world-class standards, appoint a full-time Arts Director, and operate a year-round calendar of productions including a National Youth Choir, National Dance Company, National Youth Orchestra, and National Children’s Choir. Capital refurbishment and annual operating costs for a facility and programme of this scope are estimated at $15 million to $25 million.

IMMIGRATION AND NATIONAL SECURITY: $70 MILLION TO $110 MILLION PER YEAR

On immigration, the FNM announced a Commission of Inquiry, a permanent independent Oversight Board for Immigration, an Immigration Reservist Body deployed to every Family Island, expanded biometric tracking for deportations, and enhanced coastal monitoring in partnership with CARICOM and United States agencies. The creation of new institutional bodies with nationwide reach, combined with the technology and personnel costs of biometric systems and maritime surveillance across an archipelago of 700 islands, is estimated at $30 million to $50 million annually.

On national security, the party committed to additional resources for the Royal Bahamas Defence Force and the Royal Bahamas Police Force, the restoration of insurance policies for all RBPF officers and their families, new or retrofitted detention facilities for separating first-time youth offenders from hardened criminals, and expanded counselling, support, and protection services for survivors of sexual assault. These commitments are estimated at $40 million to $60 million per year.

REVENUE CONCESSIONS: $30 MILLION TO $60 MILLION PER YEAR IN LOST INCOME

In addition to its spending commitments, the FNM proposed several tax concessions that would reduce government revenue. These include allowing Bahamians to use one duty exemption per year for online purchases, expanding Real Property Tax exemptions for senior citizens, offering a ten-year property tax holiday for developers who construct low- and middle-income rental housing, and making VAT rebates for first-time homebuyers immediate and digital.

Customs duty is one of the government’s largest revenue sources. Extending duty exemptions to online purchases, depending on uptake, could cost the Treasury $10 million to $25 million annually. The property tax and VAT concessions would reduce revenue by an additional $20 million to $35 million per year. In total, the proposed concessions represent an estimated $30 million to $60 million in annual forgone revenue.

THE FISCAL GAP: $75 MILLION SURPLUS VS. HUNDREDS OF MILLIONS IN NEW COMMITMENTS

The 2025/2026 national budget projects total revenue of $3.89 billion and total expenditure of $3.82 billion, producing a fiscal surplus of $75 million, the first in the history of The Bahamas as an independent nation. Annual debt interest payments stand at approximately $668 million. The national debt is $11.46 billion. The debt-to-GDP ratio has improved from 88.7 percent to a projected 68.9 percent but remains above the government’s 50 percent medium-term target.

Against this backdrop, the FNM’s combined commitments imply new annual expenditure of $600 million to $900 million, one-time capital costs of $400 million to $500 million, and annual revenue reductions of $30 million to $60 million. The existing surplus would cover less than two months of the healthcare commitments alone.

HISTORICAL CONTEXT: WHAT THE FNM DID LAST TIME

The last time the FNM governed and faced a fiscal gap, it chose austerity. During the 2017 to 2021 term under Prime Minister Hubert Minnis, the party raised VAT from 7.5 percent to 12 percent, a 60 percent increase. It froze public service increments and did not sign a single industrial agreement over the entire term. It separated thousands of government workers from employment during the economic fallout of Hurricane Dorian and the COVID-19 pandemic.

Several fiscal analysts contacted by the Herald noted that the scale of the FNM’s current promises is substantially larger than its last term’s commitments, while the fiscal room to absorb them is narrower. One senior economist, who spoke on condition of anonymity because of professional constraints, said the platform as announced “cannot be delivered at 10 percent VAT” and that “the honest answer is either VAT goes to 15 percent, or half of these programmes never get funded.”

Another financial services executive noted that the first-ever budget surplus “took four years of disciplined revenue growth to achieve” and warned that “unfunded promises of this magnitude would wipe it out in the first budget cycle and put the credit rating upgrade at risk.”

WHAT VOTERS NEED TO KNOW

The Herald is not questioning the desirability of the FNM’s individual policy goals. Universal healthcare, free preschool, better hospitals, and safer communities are objectives shared across the political spectrum. The question is not whether these are good ideas. The question is whether they can be paid for without consequences that the FNM has not disclosed.

Based on the available fiscal data, there appear to be only three paths to implementation. The first is a significant increase in taxation, potentially including a VAT increase to 15 percent or the introduction of new revenue instruments. The second is the cancellation or reduction of existing government programmes, which could include initiatives such as the National School Breakfast Programme, the National Youth Guard, Upskill Bahamas, energy reform projects, or Family Island infrastructure commitments. The third is a reduction in the public service workforce, which currently employs tens of thousands of Bahamians and their families.

The FNM has not indicated which path it would take. Until it does, voters are being asked to endorse a platform with a funding gap that independent analysis suggests runs to hundreds of millions of dollars per year.

The Herald calls on the FNM to release a costed fiscal framework before election day, including projected revenue, expenditure, borrowing requirements, and a clear timeline for implementation. Bahamians have a right to know what they are voting for and what it will cost them.

METHODOLOGY

Cost estimates in this analysis are derived from: the Sanigest Internacional NHI feasibility study commissioned by the Government of The Bahamas; the National Health Strategy Report 2026–2030; the 2025/2026 Budget Communication and Draft Estimates of Revenue and Expenditure; the Fiscal Responsibility Council Annual Budget Report for FY 2025/2026; Public Hospitals Authority project documents and parliamentary borrowing resolutions; the FNM’s 2019 pre-primary education voucher programme; UNICEF and Penn Wharton Budget Model benchmarks for early childhood education costs; and comparable programme costs from Caribbean small island developing states. All estimates represent ranges and are intended as conservative approximations for public discussion purposes.

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