The One Bermuda Alliance held a press conference this morning [Oct.6] to speak on the economy. OBA Leader Senator Craig Cannonier, Shadow Finance Minister Bob Richards and Miguel DaPonte – a member of the OBA’s Shadow Board on the Economy – all made brief presentations.
Mr Richards suggested a raft of measures to improve the economy including: granting employers a two-year payroll tax exemption for new hiring, eliminate the employee portion of payroll taxes for employees earning less than $50,000 a year, eliminate the licensing requirement for non-Bermudian spouses for the purchase of property, require government to pay its bills in less than 30 days, reserve 20% of government discretionary spending for small business, freeze the size of the civil service, cut consultants and frequent travel, reduce the size of Cabinet, and reduce ministers pay by at least 10%.
The full statement by Sen. Craig Cannonier follows below:
Good morning everyone and thank you for coming.
We’ve asked you here because we want to talk about the economy and ways we can make it work better for Bermuda.
We do so because more people are hurting today, more people are pessimistic for the future and more feel there is nothing that can be done to reverse Bermuda’s decline.
We’re here to say it does not have to be this way, that there is much we can do to get Bermuda back on track.
The first priority of government, as we see it, is to create and maintain an environment that grows opportunity; that enables its citizens to make a living, whether in the form of a job that puts food on the table, or an education that leads to a fulfilling career.
In Bermuda today that environment has started to unravel, with a serious loss of employment and opportunity across all levels of society.
Last week’s announcements of the loss of more than 150 jobs were not isolated, unrelated events. They were part of an ongoing slide that threatens all of us.
People who think that CITI Fund’s plan to ship 105 jobs to Canada and the United States doesn’t have anything to do with them should think again.
We have an economy that is deeply interconnected.
The loss of jobs in the international business sector has a ripple effect throughout our economy. It means less business for restaurants, for shops, for law firms, for banks and landscapers, for office supply companies, IT companies and taxis and for landlords. You name it, it’s all connected.
So the loss of jobs in the international sector is not isolated.
All of us have a stake in it.
I understand why people feel helpless in the face of what is happening, particularly when their government keeps saying it has no power to do anything; that we just have to ride out the storm.
But we don’t see it that way at all. We have the means to shape our own destiny. We have the means to make a difference. We reject the Government’s passivity.
My main message this morning is:
We can do this, we can turn things around. We need to believe in ourselves, and believe in who we are. Bermuda has always been able to adapt and grow. That is our history. We are resilient. It’s in our genes and we should never forget it.
Things will get better; not on their own but through discipline and good planning, through tough, intelligent decision-making and, always, with optimism that draws from who we are as Bermudians.
This morning I have asked two members of our economic team to speak to OBA plans and policies to revive the economy.
They are Mr. E.T. (Bob) Richards, the Shadow Finance Minister, who I know you are all familiar with; and Mr. Miguel DaPonte.
Miguel is a member of the OBA’s Shadow Board on the Economy. He is a Chartered Financial Analyst who earned a Master of Business Administration at the Richard Ivey School of Business, University of Western Ontario, with an undergraduate degree in Finance and Economics.
Miguel is a vice-president at BF&M Investment Services. Prior to joining BF&M, Miguel managed global equities and fixed income portfolios for various institutions, trusts and high net worth individuals located around the world.
Together, Bob, Miguel and the rest of our economic team have been keeping a close watch on the economy in order to put together a plan to get Bermuda working again.
This morning Miguel is going to speak briefly on the state of the economy and Bob will lay out ideas to get Bermuda back to a position where we are growing jobs, not losing them.
Afterwards, we will take questions.
The full statement by Miguel Daponte follows below
Good morning everyone.
We are here today to lay out some of the OBA’s approach to getting our economy working again.
My role in this exercise is to provide some context by reviewing our current economic situation.
Surveys show Bermuda with an unemployment rate between 10 and 12%. That means approximately 4,000 people without a job.
This is an unprecedented situation for a country that for nearly 60 years enjoyed full employment.
The level of hurt is running deep. Pension hardship withdrawals are rising as people struggle to pay for education, housing and medicines.
Excessive Government spending has created an unprecedented level of debt, now totaling $1.2 billion.
Interest payments on the debt are costing $95 million a year or $260,000 a day. This has crippled the government’s ability to help Bermudians just when they need it most.
Everyday services – from charities to buses – are now compromised because there is not enough money to support them.
The government has tried to counteract the situation with the argument that we cannot help what is happening because of the global recession.
The global recession has obviously had an impact in Bermuda, but it is wrong to believe it is the sole cause of all our ills.
Negative trends in the economy preceded the recession.
Retail sales have been falling for 38 consecutive months.
And the total number of jobs held by Bermudians has steadily fallen since the year 2000, even during times of plenty.
This last statistic is an indictment of the Government’s protectionist policies that have alienated the international business sector while failing to generate jobs for Bermudians.
I make these points to say that we have taken our eye off the ball. We have not taken care of the economy. What was once a smooth-running engine with full employment is now starting to knock and cough and stall.
Countries from Ireland to Switzerland and the Caribbean have copied our model and enhanced it while we have failed to stay sharp.
We have seen competitors with far more severe public sector financial problems than us increase foreign investment and jobs in both tourism and international business.
For example, there is very little data to suggest that jobs or company formations have shrunk in the global reinsurance world, yet Bermuda has seen jobs and companies leave while key competitors grow.
The OBA was not formed to wring our hands and blame our situation on the global economy. The government is already doing that. But with the global economy possibly heading for a further slowdown, it would be a disaster to leave our future to factors we cannot control.
As our leader has already suggested, we have to take charge, we have to take responsibility. We cannot allow passivity to be our economic policy.
Our concern is that the government doesn’t get it, and that it has run out of ideas and energy.
We need to accommodate industries that want to set up business here. Jobs are vital and we must do all we can to keep our people employed. We can strike the right balance to build an economy that works for Bermuda.
The full statement by Bob Richards follows below:
Never in my lifetime have I sensed such widespread feelings of helplessness and hopelessness among Bermudians.
That’s not who we are.
These negative attitudes have been fostered by our government constantly telling us there is nothing much we can do except wait for the global recession to end.
Our national confidence and optimism have been dented by a series of blunders by this government.
We need to bring back hope, confidence and optimism, but it will take a change in attitude, a well-conceived plan and the enthusiastic participation of Bermudians to make it work.
We, the OBA, firmly believe we can turn this economy around ourselves by being proactive instead of being passive.
In recent months, we have put forward a number of strategic reforms to change the way we conduct business as a government and the way we work with the outside world.
Today I will focus on more immediate steps that can help grow jobs and expend opportunity.
There is an old saying: When you find yourself in a hole, stop digging, throw away the shovel. Our competition, Cayman Islands, have recently done exactly that:
They have temporarily suspended their term limit policy, until they can figure out a new policy. They have recognized, as the OBA has, that term limits have been job killers for their people.
The PLP government is too set in its ways to be pragmatic. They have done nothing in this regard.
The OBA would also be pragmatic. We would suspend term limits for a period of two years, while the matter can be thoroughly reviewed.
Like Cayman, we have publicly recognized for some time that the current term limit policy has killed jobs for Bermudians and contributed mightily to the exporting of jobs from Bermuda to places like Ireland, Switzerland, and Canada. By suspending term limits for two years, we lay down the shovel.
In an effort to encourage the formation of new jobs in Bermuda, we would grant employers a two-year payroll tax exemption for new hiring. So, if a company employs 10 people and they add 3 more staff, for the next two years the company will not have to pay payroll tax on those additional 3 employees. Of course we would need proper oversight to ensure that there will be no abuse of the policy.
We would eliminate the employee portion of payroll taxes for employees earning less than $50,000 a year. This would put more money in the hands of those folks who are struggling in this shrinking but still expensive, economy.
We would reform/fast track Planning & the Planning process… currently a factory of red tape.
The process is clogged; preventing blueprints from becoming real projects that create jobs.
We would eliminate the licensing requirement for non-Bermudian spouses for the purchase of property.
This policy is not only blatantly discriminatory, but, like Planning, inhibits the ability of people to buy, build and renovate homes. These are projects that can create jobs in the hard-pressed construction industry.
We would require government to pay its bills in less than 30 days. It pays its bills too slowly. This would put cash in the hands of struggling local businesses.
We would reserve 20% of government discretionary spending for small business. That’s tens of millions of dollars a year going to businesses we know.
We would freeze the size of the civil service, which has been bloated by the PLP, and reduce it through attrition. Its cost, which is born by everyday Bermudians and our customers, has made us less competitive.
We would cut consultants and frequent, lavish travel. There has been only lip service paid to this by Government, but the gravy train keeps right on chugging.
We would reduce the size of Cabinet: More cabinet ministers means more civil servants, more GP cars, more trips.
The Premier created more ministries in a recent reorganization, a move that increased the cost of running the government.
We would reduce ministers pay by at least 10%
Ministers must lead by example. We cannot expect Bermudians to tighten their belts without their leaders doing the same. Anything else would be sheer hypocrisy.
Finally, and I say this with the greatest respect, the Premier should recognize that she is out of ideas as a Minister of Finance, and compromised by policies and practices that have failed Bermuda.
It is time for a fresh pair of eyes. It is time to step back and give up Finance to another member who is not so bound by past missteps, who can bring real energy and real focus to the post.
Articles that link to this one:
- PLP Responds To OBA’s Ideas On Economy | Bernews.com | October 7, 2011