OBA’s Richards On Pre-Budget Report
[Updated with videos] “We are living with the consequences of a government that has lost control of the public purse and put the Island on a path to financial ruin,” said Shadow Finance Minister Bob Richards.
Speaking at a press conference this afternoon [Dec.14], Mr Richards said, “The Government’s Pre-Budget Report released this week offer nothing but more debt, higher debt payments, increased taxation, no meaningful job growth and a lot of excuses.”
Mr Richards said, “The Government’s cash crunch is already extreme because it is borrowing money to cover its day-to-day expenses.
“Here’s how bad that is: Think of a householder using a credit card to pay for his mortgage, for Belco, for groceries and other daily expenses. It may work for a short while, but it unsustainable. It cannot continue.”
10-minute video of Mr Richards’ statement:
“The cost of the interest on Government debt – currently $192,000 a day – has effectively hobbled its ability to help people in need,” said Mr Richards.
“And it will get worse. We now project the debt will cost taxpayers $219,000 a day a year from now.”
9-minute video of Mr Richards’ Q&A with the media:
Mr Richards said, “We are at a fork in the road, and people will have to decide what is in their best interest and indeed what is in Bermuda’s best interest – whether to stick with a Government that has presided over a major erosion in the Island’s business environment – with the loss of jobs and income all around – or with a new Government that can provide steady, sensible leadership and a fresh start for all concerned.”
Mr Richards’ full statement follows below:
Good afternoon and thank you for coming.
The pre-Budget documents released this week by the Premier paint a dire picture of the state of Bermuda’s economy and its public finances.
We are living with the consequences of a government that has lost control of the public purse and put the Island on a path to financial ruin.
The prospects for growth in the two pillars of our economy are weak. Our International Business sector, which has been growing in other countries, is not growing here – a result of Government policies and attitudes that have made International Business feel unwelcome and damaged Bermuda’s position as a preferred business centre.
We are on a debt treadmill that continues to get worse.
The 2010/2011 financial year that ended in April was yet another year in which the Government failed to live within its means, recording a deficit of $269 million.
It was the third consecutive year we have spent more than we have earned. The trend continues through this year, meaning we are heading for a fourth straight budget deficit.
The cost of the interest on Government debt – currently $192,000 a day – has effectively hobbled its ability to help people in need. And it will get worse. We now project the debt will cost taxpayers $219,000 a day a year from now.
For anyone wanting to understand what this means, they need look no further than Government decisions to
- lay off teachers
- increase the cost of public transportation
- cut back support for charities
- provide Police with less than what they need
- shut down public transport routes
- stop overtime pay
- postpone road repairs, and
- charge excessive duty at the airport on imported goods.
Now, the Government is floating moves to extend duty to online shopping.
The point here is that the Government will continue to look for ways to come after your money. This is the reality of the situation they’ve created for themselves and now you, the taxpayer,
It could get worse.
We are exceedingly fortunate that interest rates remain at historically low levels, but we cannot count on them to remain low forever. Interest rates will someday rise and Bermuda’s vulnerability on this point cannot be downplayed. A rise in interest rates will mean paying even more for our still growing debt – a rise that could easily lead to a Government cash crisis.
Indeed, the Government’s cash crunch is already extreme because it is borrowing money to cover its day-to-day expenses. Here’s how bad that is: Think of a householder using a credit card to pay for his mortgage, for Belco, for groceries and other daily expenses. It may work for a short while, but it unsustainable. It cannot continue.
As a country, Bermuda has never been more vulnerable – certainly not since the Second World War. We have few options because the Government undermined our history of careful money management – a history that extended right up to the Premier’s immediate predecessor – her father, the Hon. Eugene Cox.
Under this Finance Minister, our economy has got significantly weaker. We have seen a massive loss of opportunity with decisions by International Business to shift their operations to other jurisdictions. We are experiencing significant unemployment for the first time – with no prospect for improvement.
Despite the seriousness of the situation, the Government offers the people of Bermuda no plan, no way out of the hole it has put us in. The Government’s pre-Budget documents released this week offer nothing but more debt, higher debt payments, increased taxation, no meaningful job growth and a lot of excuses.
Bermudians must ask themselves if this is what they want for their families. Is this is the direction they want for Bermuda? They have to ask ‘What kind of country are we making for our children?’
The One Bermuda Alliance believes Bermuda is much better than the record of this Government.
We believe the people of Bermuda deserve better. But we need change to get there.
The most important change we can make is a change in Government. Only with a change in Government can we give local and international businesses the opportunity to re-commit to Bermuda – to regain confidence in Bermuda – as a place to do business.
Right now, business is leaking away. Local businesses are contracting and international businesses are moving elsewhere.
We are at a fork in the road, and people will have to decide what is in their best interest and indeed what is in Bermuda’s best interest – whether to stick with a Government that has presided over a major erosion in the Island’s business environment – with the loss of jobs and income all around – or with a new Government that can provide steady, sensible leadership and a fresh start for all concerned.
My message today is that we do not have to give in to the circumstances created by the current Government. All is not lost. We can turn this thing around, but it will require change.
In our Reply to the Throne Speech, our leader Craig Cannonier outlined an economic plan to revitalize conditions to grow the economy in a manner that will grow jobs and paycheques and reduce debt over time. I invite you to look again at what he said.
But the most important thing we can do – the thing that will help get our economy back on track faster than anything – is to change the Government.
Only with that change can Bermuda send a convincing, credible signal to people everywhere that we want their business; that we want Bermuda to flourish again so there are enough jobs and career opportunities for our people and enough revenues to pay down the huge debt.
Without that change, we will only get more of the same. Bermuda deserves better.
This island is CRYING out for help….PLP please do the right thing and host an election as soon as possible
Bob richards can’t talk to save his life. I listend to the news he and
wayne furbert needs to take speech lessons. Please. vote for the indpendents they can articulate.
Bob,
You made a nice speech, but you didn’t say a single thing except for give me the keys. So if we were to give you the keys, please let us know what you would do….
I suspect it is the exact same thing as the PLP are doing but worse. There are only so many ways to balance a budget, raise taxes or fire people, whatever choice you are screwed.
If you want the keys, you better tell people what you are going to do.
I believe that is covered here:
http://bernews.com/2011/11/opposition-reply-to-the-throne-speech/
I’d happily have him on the helm than a party who have been drunk on power since 1998!!
The PLP have been spending money like drunken sailors and everyone knows the first thing you do with a drunk at the helm is take away their keys!!
Bobs background and understanding of prudent fiscal policy is what is needed to steer the island back on course.
Having also been a member of the UBP, the party which kept the island financially stable until the PLP came into power, he’s more than qualified to take the keys and put things back on track!
Take your blinders off mate.
fu truth
Remember that.
Not if it goes belly up.
While floating with ones belly up, ones bottom.. is at the bottom! Either which way, the people at the bottom will surely suffer first.
You are correct. In honesty they need to cut down on the civil service, thats one of the many reasons we are insolvent right now. But nobody wants to do this. The reality is someone will have to do it and that its 100% the PLP’s fault no matter who has to execute it, OBA or PLP…. The island is broke and like a business thats going broke, they need to shed costs. This is the LARGEST one.
-Noel
That is where all the voters are, so they will never do it. They dont care about the public side of things. Protect your position of power and your free car at all costs. That is the PLP’s first a foremost goal. Bermuda comes second to that.
Come on Bermuda, wake up. I quote a blogger who goes under the name “Student”. This person felt that they was better off sticking to the party in charge (no matter their acknowledgment of the parties blaring faults), simply because they did not know what they was going to get with a party that has never run the country. I see logic to this point but as in 1998 when we had a party who was untested as being able to run the country, the people took a plunge/chance and voted in their direction (myself included). Now we are at this cross roads again and the cry is “we don’t know what we are going to get from this new/old group”. As much as I admire the new faces being rolled out by the PLP, the constant knee jerk solutions, than retractions drives me to have no faith in their ability to turn this thing around. What is most scary is their plan to recoup all their wastefulness from me directly. I understand the inbreeding of loyalty to a party, but sorry, bring able to identifying “it is no longer your time”, seems more common sense to me.
Be brave Bermuda, don’t be too worried about change; it at times “IS GOOD”.
Truly agreed, they only want power and the GP cars, just listen to them at happy hour talking about how they be driving in style soon.
What I don’t get is how Bob Richards and the OBA continue to purport that Bermuda should somehow be the only country in the western hemisphere that should be untouched by the recession. It is disingenuous and he knows this. It is politics at its best (or worst). Bermudians know that the economy is not the sole ‘fault’ of the government. Especially in a country where we have no real indigenous industry. We are at the mercy of others.
In addition, Mr Richards continues to throw out solutions that this govt has largely already implemented. Nothing new there. He needs to go and focus on trying to save his seat because I hear that his time as an MP is nearing an end.
fu too paid crony
My friend, you are among the lost. All the best to you.
Fool, the PLP continue to fail us. The debt increased by approx. A quarter of a Billion in 2010/2011 fiscal year. We have not paid off any of the debt. When we come to refinance that debt, mark my words it will be at higher interest rates so cost much more than 192,000 per day. Four more years of the PLP and It will be over. The PLP failed you throughout the last 13 years and continue to fail you today. Only a complete fool would fall for the upcoming removal of Paula Cox an instigation of Kim Wilson as a party that could get us working again. The PLP is done. It was born through desire for change, but became a vehicle of individual greed and hatemongering. Neither of which is good for Bermuda at any level
PLP has not failed in the last 13 years! Stop drinking the OBA juice and at least be a little objective in your commentary! GDP growth, record business startups (i.e. expansion in IB), good regulatory environment and small business opportunities are the few things that has happened in the last 13 years you puppet! I mean 19.2% debt to GDP is the only thing you can muster up?
@ “sigh” A few things.
1. The recession is not the reason for our troubles.
2. The reason we are struggling is because the PLP spent too much money and now that we need it, we don’t have it.
3. We overpaid on the docks.
4. We over paid on the ne Govt Offices building
5. We over paid on the construction of TCD
6. We over paid for Global Hue in Tourism
7. We overpaid for the Faith Based Tourism initiative
8. We overpay on almost ever W&E project that is undertaken.
9. We released the BIU from the bond that they owed and we got nothing in return.
On the flip side;
1. We don’t have enough money to keep the buses maintained and operational.
2. We don’t have enough money to subsidize the ferries and are therefore cutting schedules
3. We don’t have the money to adequately support our charities in this time of need.
4. We don’t have the funds to maintain our roads
and on and on
AS A RESULT
1. The Govt is looking to raise YOUR taxes anywhere they can, hence that pre-budget that was released.
2. What should happen is that we need to initiate proceedings to get our money back from those shady deals NOT further tax the hardworking people of Bermuda.
This problem we are facing is not the results of a recession. the PLP manufactured this problem when they refused to reign in overspending in the “good” years.
Full stop.
PLP WILL STILL WIN THE ELECTION SAY WHAT YOU WANT.
NOW GETTING TO BOB I HAVE NEVER HEARD BOB SAY ANYTHING ABOUT POOR PEOPLE.
I HAVE NEVER HEARD BOB SAY ANYTHING ABOUT THE LOW INCOME PEOPLE.
I HAVE NEVER HEARD BOB SAY ANTHING ABOUT HOMELESS PEOPLE.
ALL BOB TALKS ABOUT IS GIVING INTERNATIONAL BUSINESS A FREE RIDE IN BERMUDA
AND TO HACK WITH BERMUDIANS THAT ARE STRUGGLING.BOB SOUNDS JUST LIKE
JOHN SWAN, WHO CAN’T EVEN FILL HIS BUILDING AND HE IS ANGRY.
SWAN ALL THEY ARE WORRYING ABOUT IS THERE BOTTOM LINE
BY THE WAY (TRUTH) DON’T FORGET TO PUT YOUR RUDE CHILDREN IN THE SPENDING
THAT ARE AT WESTGATE PRISON THAT IS COSTING TAX PAYERS OVER 90,000 A YEAR FOR ONE IMMATE . AND THERE ARE OVER 200 IN THERE TIME 90.000 A YEAR AND MANY ARE DOING LIFE.
There are more homeless and low income people under the PLP than there ever have been! There are more now than ever!! So maybe you should ask the PLP! What about them!!
What about the millions wasted by the government that could have been put into social services and education?
What about the decline in education and increase in violent crime?
What about the free busses for those that need them that were never free? Last time I checked the cost of public transport has gone up! How does that impact your low income person.
What you fail to recognize is that International Business pays for the low income person indirectly because they and their people put money into the economy. You are too dumb to realize that though, too Ignorant and you think that the money in Bermuda comes from thin air.
The largest contributors to charities in Bermuda is International Business not the government. In fact the government does very very little on the social side. They would rather close the sunshine league and keep their free cars and big paychecks.
Think about it and then think about where this Island is going!? The government in charge has no clue, the do not even know how to balance a budget. They do not even know how to build a building without goin millions over-budget.
Hotel sites remain derelict,
Income remains down
Unemployment continues to increase
Property continues to decline in value
The cost of living and Tax continues to go up
That is not the symptom of the global economy but a government that has no idea how to run the economy in the first place. Who overspent and robbed the people!
@Maddog. You should really try growing up and having an ault conversation. Offer something meaningful to the points I raised. If you can…
Please stop yelling. All caps is considered yelling on-line.
Oh! by the way, Sir John’s new building is almost full. He has a lot of contact and is a good landlord.
Your comment is disingenuous…Mr. Richards is not suggesting that Bermuda should be untouched by the recession. The point is Bermuda should be in a better postition to withstand the low point of this recession. Had Bermuda’s surplus and capital projects – the Bermuda Purse been managed prudently and with fiscal responsibility Bermuda would not be in this fine mess we are in. That point is undeniable.
@ sigh
Gosh, I think things are great. Surely the PLP cannot be to blame for there being no money about? Look how hard they’re trying. And they got rid of that Brown fellow, so what more do you want? So what if they can’t help anyone -never expected them to anyway. That’s what some of you don’t get. We never had any expectations, but hey, power to the people! Like I don’t know where Rolfe, the Colonel, Brother Burgess, and the others are (funny how they gone quiet in this time of need)but for me, that girl Cox seems to have her fingers on the chequebook. And besides, since there is no money anyway -and it’s not their fault- why change? The Revolution goes on…and on.
Truth original thanks for setting the record straight. Of course your still gonna get those PLP hardliners that still don’t wanna get it. I mean what else needs to be said. I hope all their finances are in order because the beatdowm and suffering will continue under this government
PLP ALL THE WAY GET OVER IT HATER ,AND I HOPE YOU DON’T HAVE CANCER, TO CALL YOUR SELF CANCER IS SELF DEFEATING THE BIBLE SAYS SPEAK THING NOT IN TO BEEN THAT ARE BAD. THATS WHY THE PREMIER SPEAKS HOPE OVER THE ISLAND OF BERMUDA BECAUSE WE WILL BE OVER COMERS.
worshipping a FALSE IDOL Maddog. Why don’t you stop hating Bermuda you ideologue.
Oh brother.
The Bible is propoganda designed to control those that believe it. Say alot about you! A sheep that has no clue !
Maddog let me put you in a room with all the unemployed people on bermuda and say what your saying here and see how it’s taken. I bet you would run fir your life and still take a beatdowm!! This govt has tricked and beat the hell out of it’s people…fool!
I’m unemployed and like others I know, we hardly blame the government. We are upset more at the cut throat bs working for the private sector you joker!
That’s too bad. The govt is peeing on you and telling you it’s rain…..and you believe it.
What job in the international sector can you do that an expat is doing?
Before 1998 politicians didn’t have personal GP cars, just the Premier. When the PLP came into power, suddenly they all had to have shiny, oversized rides to bling it up.
How much you think has been spend on these shiny rides since that time? Probably an easy million plus when you factor maintenance and repairs!
Government is taxing us so they can keep living it up on our dime!
Way more than a million. Ten luxury cars costs about $1m. At its peak there were about 200 GP cars. And we didn’t buy them once and have done with it; the cabinet ministers limo cars have been renewed every few years. Can’t have self-important political elites running around in cars older than 4 years can we? The amount spent on cars to keep the elite in luxury has probably exceeded $40m in the past 13 years.
Wow! Yeah probably right, way more than a million!!
Mad dawg maybe you shud educate your brother or At least your namesake “mad dog” cus his posts above are blind loyalistic !
I saw him. Maddog is not Mad Dawg! It doesn’t appear worth spending any time engaging in debate with him. He doesn’t appear rational.
I think it would be best if the PLP cleaned up their own financial muck… so let’s re-elect the Jokers again so they can finish us off! The core haters want to loot our huge pension fund next. That’s what I hear. It will be so much fun to watch from abroad – I mean who’s gonna stay here and become a financial slave to the PLP – how the Gov’t will scramble when they default on their international loans. That certainly will happen as long as the PLP Government spends more (on themselves) than they acquire in taxes from US!
All I ever hear from you bloggers is PLP this, PLP that, go ahead blame everything on the PLP. PLP come from the islands oppressed and as a result the Party is resilient and has very broad shoulders. You blogger really think your complaining is going to translate into votes for the OBA, HA. Someone ask BOB Richards when government spends $1 billion dollars how does it leave the country. The answer is it doesn’t it goes into the pockets of Bermudians and Bermuda Business. Then someone ask the business do they want to give up their government contracts, then ask the employees do they want to get laid off, then ask Bob Richards is he an Economist. I bet the answer will be NO to all.
Please pay my taxes then………
LOL
You are misguided. The vast majority of the money spent on those projects went to foreign contractors…and perhaps your beloved MPs.