Premier Cox: Pre-Budget Report
[Updated with full report/videos] Premier and Minister of Finance Paula Cox said the Government’s Pre-Budget Report will be released to the public later today [Dec.12] and provided some initial data.
The Premier said the data is “consistent with the expectation that the road to full economic recovery will be long and not without continuing challenges.”
Estimates suggest Bermuda’s Gross Domestic Product [GDP] has declined slightly in real terms 2011, with only a modest recovery likely by the end of 2012 or early 2013.
“Typically the Consolidated Fund accounts would be tabled during the current legislative session,” said the Premier. “Unfortunately, the accounts of the Consolidated Fund for the year ending March 31, 2011 are not yet ready for tabling.”
On September 30, 2011, Net Public Debt, which excludes guarantees and is net of the Sinking Fund, was $1.12 billion. The net debt to GDP ratio was 19.2 percent,
The Premier said revenues for the six months ending September 2011 are $421 million, $45 million lower than in September 2010.
The Government’s revised current account expenditure, excluding debt service, is expected to be $950 million, which is $43 million above the estimates provided in the 2011 budget.
“It should be pointed out, that with the projected reduction in both current and capital spending, the Government will still seek to meet its stated target of a $150 million dollar reduction in current & capital spending as compared to last fiscal year,” said the Premier.
The Premier’s full statement follows below:
Mr. Speaker,
I rise today to give a Ministerial Statement to highlight the Governmen t’s Pre-Budget Report which will be released to the public today.
In February 2011, during my budget presentation to the House I committed the Government to developing an open budget process. The open budget process hopes to foster greater public participation and clarity in budget decisions.
As I have said many times before, Mr. Speaker, budgets are not just numbers on a page, they are about our people. Governments are here to serve people, and it is important that citizens are informed about the budget process and understand what it means to them.
Budgets affect lives, budgets affect business, budgets affect our children, and budgets affect our retirees. Budgets affect all of us, and it is vital that our people are educated about the formulation of our country’s budget.
The International Budget Partnership states that “Open Budgets Transform Lives”. Mr. Speaker, it is my hope that this open budget process not only transforms lives, but also transforms the conversation.
The Government hopes that through the open budget process, our citizens will have a better understanding of the choices that our country faces. A better understanding of these choices, by policymakers and citizens alike, will raise the level of debate and lead to better, more informed decisions.
Mr. Speaker, in February I also committed the Government to move to a Multi-Year Budgeting framework for our current account expenditure. This Medium Term Expenditure Framework (or MTEF) will be implemented in 2 phases. The first phase has commenced, and during the upcoming budget year we will establish multi-year cash limits for all Ministries.
These multi-year limits will enhance long term planning in the Ministries. The second phase will occur during the next fiscal year. In preparation for the 2013/14 budget, the Government will be implementing multi-year business plans for all ministries. These business plans will cover the next 3 years of the budgeting cycle.
Mr. Speaker, the Pre-Budget Report also provides a mid-year review of the Economy and outlines government financial performance in the last fiscal year. Additionally, the Report gives a mid-year update on the Government’s financial performance through September, 2011.
Mr. Speaker, before I speak more about other topics covered in the Pre-Budget Report, I would like to provide honourable members an update on the local economy and the financial performance of the Government.
Summary Economic Position and Outlook
Mr. Speaker, in 2010 the Bermuda economy contracted by 0.7 percent based on current market prices (Nominal GDP). When adjusted for inflation, the level of economic activity or real GDP decreased by 1.9 per cent.
This less than anticipated contraction in GDP of 1.9% in real terms for 2010 was largely driven by declines in output in the construction, business activities and wholesale and retail sectors. These declines were partially offset by growth in the hotel and restaurant sector and some stabilization in the financial intermediation sector.
Mr. Speaker, It is satisfying that accompanied by the steadying performance of the financial intermediation sector, the tourism sector exhibited growth in 2010. This bodes well for the economy as a whole because the indicators for 2011 give reason for hope.
During the first nine months of 2011, there was a 6.3% increase in the number of visitors to the island. The growth in air visitors over the first nine months of 2011 was the first increase over the first three quarters of a calendar year since 2007.
The increase in air visitors recorded over the first half of 2011 translated into higher visitor expenditure which was up by 13.6% over the first half of 2010 settling at $201.6 million. This increase in air arrivals over the first 3 quarters of 2011 is very encouraging as Bermuda works on re-establishing the tourism sector following the global economic slowdown.
Over the first nine months of 2011, 624 new international companies and partnerships were registered in Bermuda representing a 15.3% increase over the 541 companies that were registered in the corresponding period for 2010. This trend indicates that the island is still very attractive as a jurisdiction and bodes well for the future.
The Construction industry received a much anticipated and needed boost with the start of the $500 million King Edward Memorial Hospital project in the first quarter of 2011. This project will revive the industry and sustain it until 2014 which is the estimated year of completion. Over that time period other private and public projects should come on line which will see increased employment levels in this sector.
Inflation remains low and stable and will likely remain so, providing that oil prices do not rise again to the levels witnessed in April of this year. The current account surplus in the Balance of Payments illustrates that foreign exchange earnings remain strong and represents an important strength of the Bermuda economy.
Economic data for the first half of 2011 are consistent with the expectation that the road to full economic recovery will be long and not without continuing challenges. After taking all of the above information into account, the Government anticipates that the continuing effects of the global economic slowdown will persist through most of 2012, and estimates that Bermuda’s GDP in real terms will decline slightly in 2011, with only a modest recovery likely by the end of 2012 or early 2013.
Review of Draft 2010/2011 Financial Statements
Mr Speaker, I will now report on the Government’s financial performance for the fiscal year 2010/2011.
Mr. Speaker, typically the Consolidated Fund accounts would be tabled during the current legislative session. Unfortunately, the accounts of the Consolidated Fund for the year ending March 31, 2011 are not yet ready for tabling.
The Accountant General is working with the Office of the Auditor General to ensure that all outstanding matters can be resolved and the accounts tabled as soon as practicable.
Mr. Speaker, despite the aforesaid, draft financial statements have been prepared and the audit is near completion and we do not anticipate material changes to the statements I am about to report on.
Mr. Speaker, the Government understands the importance of timely financial information. As the Minister of Finance I consider it essential that all Government entities have their annual financial statements prepared and audited within six months of year-end.
Mr. Speaker, the Consolidated Fund Accounts are a major accountability report of the Government. I would not feel comfortable breaking for Christmas without sharing this information with this Honourable House and the people on Bermuda.
Therefore in accordance with this Government’s commitment to effecting on-going improvements in its Public Accounts and in transparency, I will now report on the draft financial statements relating to the Consolidated Fund for the year-ended March 31, 2011.
Mr. Speaker, The total revenue raised by the Consolidated Fund for fiscal 2010/11 was approximately $991 million, representing an increase of $74 million (8.1%) from the previous fiscal year. The primary reason for this increase in revenue was the increases in payroll tax, foreign currency purchase tax, stamp duty on estates, vehicle licensing fees and the biennial review of government fees.
Current expenses for fiscal 2010/11 were $1.260 billion. The three largest components of current expenses were: employee costs; grants and contributions; and professional services. Total employee costs were $597.3 million or 47.4% of total expenses. Included in this amount is $150.7 million of non-cash retirement benefit expenses. Grants and contributions were $267.7 million or 21.2% and professional services were $119.1 million.
Mr. Speaker, before I go on, let me make it clear that the line item for professional services of $119.1 does not represent overseas consultants as some will claim.
As stated on innumerable occasions, professional services covers all government contracts for cleaning, security, legal aid, Works and Engineering maintenance, contracted services for the Department of Airport Operations, health insurance portability claims, war pensioner medical claims and other locally contracted services.
Mr. Speaker, The Ministry of Finance prepares the annual Budget Estimates on the modified cash basis. The financial statements are prepared on an accrual basis. Due to the difference in accounting the actual expenses included in the Financial Statements are restated to the modified cash basis for comparative and analytical purposes.
After these restatements total current expenditure on a modified cash basis was $1.12 billion, which was $64.0 (5.7%) million higher than original budget estimates.
Expenditures were above budget in 2010-2011 primarily due to the following items: increased expenditure on Government’s health subsidy programme for the youth, aged and indigent – $28 million; interest on long-term debt – $18 million; increased expenditure for Financial Assistance and Child Day Care Allowance – $9 million; additional monies for the Bermuda Police Service – $6 million; above budget expenditure on substitute and para-professional’s salaries – $5 million; and additional expenditure on the War Veterans Programme – $5 million.
Mr. Speaker, Total capital account cash expenditure was $120.5 million, which was $23 million lower than the original budget estimates.
Net Public Debt, which excludes guarantees and is net of the Sinking Fund, increased by $242.8 million during fiscal 2010/11 standing at $1.0 billion at the end of the year. The actual net debt to GDP ratio at March 31, 2011 was 17.4 %.
Mr Speaker, during 2010/11 $25.7 million was contributed to the Sinking Fund. During the tenure of successive Progressive Labour Party administrations, the balance on the Sinking Fund has grown from $17 million to $82.8 million as at March 31, 2011. Following the 2011-2012 contribution the Sinking Fund balance will be $113 million.
2011/12 Mid-Year Review
Mr. Speaker, I will now share information on the financial performance during our current fiscal year. The headline numbers for the 2011/12 National Budget were: a revenue target of $940 million; current expenditure of $997 million; capital expenditure of $84 million; and a borrowing requirement of $147 million.
Mr Speaker, Revenue performance for the first six months of this year is as follows: Revenues for the six months ending September 2011 are $421 Million. This is $45 million lower than in September 2010. The primary reason for this decrease is due to the payroll tax rate reduction; Revenues are tracking slightly below budget estimates.
The reason for this slippage relates to weakness in the collection of Customs Duty, Foreign Currency Purchase Tax and Stamp Duty collections. Also the recently announced Payroll Tax Concession for the retail sector will reduce collections by approximately $9 million.
Considering the above Ministry of Finance estimates that revenue for the current fiscal year will be between $920 and $930 million.
Mr Speaker, I will now provide an update on the expenditure recorded during this fiscal year. All figures are for the first half of the fiscal year which closed on September 30, 2011.
Current Expenditures, excluding debt service, for the first six months ending September 2011 are $480 Million; this is $29 million lower than was spent during the same period last fiscal year.
Capital expenditures for the first six months ending September 2011are $28 Million; this is $25.7 million lower than what was spent during the same period last fiscal year. Total current and capital spending to date, excluding debt service, is $54.7 million lower than last year’s spend.
Mr. Speaker, Debt service costs for the first six months ending September 2011 are $60.8 Million. This represents $35 Million in interest payments and a $25.8 Million transfer to the Government Borrowing Sinking Fund. Debt service to date is $7.7 Million more than last year’s period.
Mr. Speaker, Government spending to date is lower during this fiscal year when compared to the similar period last year due to reductions in the following areas: Professional services spend ($20 million); Material & Supplies ($3 million); Advertising ($2.5 million); Training ($1.5 million); Travel & Transport & Communications ($1.5 million); Insurance, Energy and Uniforms ($1.35 million); and Repairs ($1.3 million).
Mr. Speaker, I would like to repeat that combined expenditure on Capital and Current Account has thus far been reduced by $54.7 Million from last year’s levels! As you can see from the reductions across the board which I just mentioned, the government is working hard to reduce expenditure where we can. I would personally like to thank the employees of the government for their commitment to the people of Bermuda and doing more with less.
However even with the above reductions achieved, compared to budget estimates, current account spending is still tracking approximately 3% or $26 million above budget estimates. Due to the on-going weak economic conditions spending pressures have continued in the social areas.
Expenditures were above budget in the first six months primarily due to the following items: expenditure on substitute and para-professional’s salaries; increased demand on Government’s health subsidy programme for the youth, aged and indigent; increased demand for financial assistance and child Day care allowance; significant increases in police salaries from arbitrated awards and overtime;
Mr. Speaker, in order to remain as close as possible to Government’s 2011/12 budget targets, Government has instituted several measures in order to realize further cost savings. In particular the Government has instituted a hiring freeze on non-essential posts and targeted the following areas for even further spending reductions in 2011/12: consultants, training & travel, materials & supplies and capital expenditures.
The government’s revised current account expenditure, excluding debt service, is expected to be $950 Million, which is $43 Million above the estimates provided in the budget.
On September 30th, 2011, Net Public Debt, which excludes guarantees and is net of the Sinking Fund, stood at $1.12 Billion. The net debt to GDP ratio was 19.2% and still remains among the lowest in the non-oil countries in the Fitch ‘AA’ rating category.
Mr Speaker, it should be pointed out, that with the projected reduction in both current and capital spending, the Government will still seek to meet its stated target of a $150 million dollar reduction in current & capital spending as compared to last fiscal year.
Looking Forward to 2012/13
Mr. Speaker, as we look forward to the next budget the government faces a number of choices. The Pre-Budget Report speaks to the choices we face and discusses them in the context of the aforementioned Medium Term Expenditure Framework or MTEF. In addition, the report contains some policy options that are under consideration by the government.
Mr. Speaker, as I said at the outset, the objective of a pre-Budget Report is to raise awareness of the choices faced by the country and to stimulate discussion for moving forward. The policy options that are presented in the Pre-Budget Report are just that, options. As a government we must lead, but we will always listen.
The policy options presented for public discussion are:
- Whether the government should look at revising duty for personal imports at other ports of entry apart from the airport
- Should we reduce the betting tax
- Should we increase sin taxes
- Should we change some of our fee structures in government to support energy efficiency
- Should we look at changing our approach to land taxes
Mr. Speaker, the Pre-Budget Report also discusses Tax Expenditure. Tax expenditures assess the cost, in terms of foregone revenue, of various tax provisions that provide tax breaks for certain taxpayers and activities. Over the last few years, the Government has put in place a number of tax expenditures. Some have been as a result of government looking to assist business during the recession. Others were put in place to meet certain social policy objectives.
The Pre-Budget Report examines the tax expenditures currently in place. As this Government stated in the Throne Speech, we as a people must ensure that those who are most in need, receive assistance. The Government plans to review these tax expenditures to ensure they are the most effective way of delivering assistance to businesses and individuals who are in need.
Mr. Speaker, I have often spoken about doing more with less, and this Government remains committed to being more efficient with its resources. However Mr. Speaker, we must also look at how the government can do less with less.
Mr. Speaker, Governments cannot be everything to everyone. We are a country of finite resources and we need to make sure that our spending is directed to the places where it has the most benefit to our society and our future. There are some times when Government should get out of the way.
Mr. Speaker, The Pre-Budget Report also speaks to asset rationalisation. We as a Government must look at how best we can use the assets that are owned by the people to benefit the people. Long term leases of underutilised fixed assets may also be considered as a way of the government doing less with less.
Mr. Speaker, in addition the Pre-Budget Report devotes an entire chapter to Efficiency Savings. Efficiency savings are reductions in budget allocations to ministries which do not reduce service level outcomes. They can either be:
- ‘Technical’ efficiency savings: These are efficiency savings which are found when more efficient ways of delivering the service are identified. Technical efficiency savings enable a reduction in inputs with little reduction in output
- ‘Allocative’ efficiency savings: These are efficiency savings that involve reductions in service delivery which do not appreciably affect the outcomes sought by the Government. For example, the introduction of means testing for social programmes which reduces the number of recipients without affecting the Government’s goal for social assistance for families in need. Allocative efficiency savings enable a reduction in outputs with little damage to outcomes.
Mr. Speaker, as part of an overall fiscal consolidation strategy, multi-year cash limits have been set to freeze overall Government spending at next year’s level for the next 4 fiscal years. This freeze applies to total level of spending, however the Government will have flexibility within Ministries.
In order to meet these targets, the Government will embark on a round of efficiency savings which will be identified in the multi-year business plans of the ministries. The Pre-Budget Report highlights the approach that will be taken by the Government to identify these savings.
The Government will establish an efficiency team, comprising of staff from the Cabinet Office, Ministry of Finance, and the private sector. The efficiency review that will take place throughout ALL Government ministries will ensure that we are delivering our services in the most efficient manner.
Conclusion
Mr. Speaker, to meet international best practice for budget transparency, The International Budget Partnership recommends that governments publish eight budget reports during the budget cycle: A Pre-Budget Report, Budget Statement, Citizens Budget, Enacted Budget, In-Year Reports, Mid-Year Review, Year-End Report, and Audit Report.
It is the aim of the Government to provide all of these reports during the coming budget cycle and 2012/13 fiscal year. In publishing this document and conforming to international standards of budget transparency, this Government further re-affirms its continued commitment to good governance.
The Government invites and welcomes feedback on the Pre-Budget report. In addition to electronic communication where citizens can email openbudget@gov.bm, the Government will hold public meetings in January 2012 to discuss the principles laid out in this document and to solicit public feedback.
The time has come to make the budget process and proposed outcomes everyone’s business. This means citizens must know what resources are spent on what policies and what the results of Government policies are.
With the introduction of the new Open Budget process, over time we will have a budget which is more widely understood and a system in which there is greater accountability for results.
Mr. Speaker, this Pre-Budget Report represents a major step forward in the preparation and budgets and the formulation of budget policy in Bermuda. This government is proud of the numerous improvements in governance that it has brought to Bermuda.
Mr. Speaker, joining the Open Budget Initiative and giving a commitment to further budget transparency is yet another step towards better governance in Bermuda.
Thank you Mr. Speaker.
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Update 3.07pm: The full 34-page Pre Budget report is below. Click ‘Fullscreen’ for greater clarity:
Video of the Premier’s statement at this afternoon’s press conference.
Video #1 of the Premier’s Q&A with the media:
Video #2 of the Premier’s Q&A with the media:
“Net Public Debt, which excludes guarantees and is net of the Sinking Fund, increased by $242.8 million during fiscal 2010/11 standing at $1.0 billion at the end of the year. The actual net debt to GDP ratio at March 31, 2011 was 17.4 %”.
Debt up!
“Mr Speaker, Revenue performance for the first six months of this year is as follows: Revenues for the six months ending September 2011 are $421 Million. This is $45 million lower than in September 2010. The primary reason for this decrease is due to the payroll tax rate reduction; Revenues are tracking slightly below budget estimates”.
Revenue down!
These talk about number change nothing about the emotion in Bermuda. PLP will get voted back in next year. Then Paula will get overthrown, then Bermuda will become the next Jamaica. Irie Man….!!!!!
Congrats Premier,
I wonder what the OBA will say now! I thought the PLP was hiding financial information.
Every time the OBA speaks, they make themselves look more and more stupid.
Call the election premier, lets bury these jokers!
you congratulate the Premier for PUBLISHING the pre-budget report?
have you READ it?
what about for destroying this country’s economy? quoting “Net Public Debt, which excludes guarantees and is net of the Sinking Fund, increased by $242.8 million during fiscal 2010/11 standing at $1.0 billion at the end of the year.” the net public debt increased from $757.2M to $1.0B!! that’s a 32% increase in 1 year!!
you must be illiterate on financial statements, because there is no way that any government should be congratulated on such results.
Haven’t read it yet, have you?
Call the election NOW!!!!!
how can you comment with congrats if you havent read it?
she could have said pre-budget there were a few 5 year olds that broke their piggy banks to contribute to govt, and you’d congratulate her because she was not hiding information?
You mean bury Bermuda in debt and unemployment more likely. The hole is partially dug, she might aswell finish us off.
Methinks if anyone is making themselves look more stupid it is you and the rest of sheeples who can see no wrong in the PLP, Have you actually read the statement???? They have ruined this Island and whoever wins the next election will have to wield a very big shovel and carry a very large bucket to clean up the mess left behind.
Ruined this island. Are you serious, survive the economic downturn and still have one of the lowest Debt to GDP Rations, keep up financial ratings, and continue to deliver services without mass public layoffs.
I sometimes think that some of you really believe that the PLP caused the global recession. Do you really think that if the UBP were in power they would have, fired a whole bunch of civil servants to make sure the budget stayed balance.
EVERY SINGLE COUNTRY racked up huge amounts of debt over the past 4 years. Now the question is whats the best way to move forward.
You are aware we live on a small flyspeck island with no natural
resources!!!!
The debt to GNP ratio is way too high.
None of these numbers matter!!! The masses will vote PLP back to power, and from there Paula will be overthrown and then Bermuda will become the next Jamaica.
“EVERY SINGLE COUNTRY racked up huge amounts of debt over the past 4 years.”
A completely and utterly false statement.
You realise that even with the debt ratio that’s still over $2500 per worker each year, right?
So you are $2500 per year worse off for the rest of your life because of the debt – and it’s only going to get worse.
Worse than that. $1.2 billion spread over say 39,000 employed workers is $30,770 per worker. That debt spread over Bermuda’s approx. 50,000 Bermudians (just using round numbers) means $24,000 for yourself and each of your children. And its still growing.
That does not include all the unfunded billions of dollars for the Government pension plans and social insurance! This is carried off balance sheet so is not reflected in this debt figure!
Wow how short sighted of you….and lets have this conversation when the first of our loans that we have to start repaying comes up. Tell me something, if we have made a loss last year, and are expected to make another one this year, how, do you thing, we will have enough to pay off the loans when some of the borrowed money’s is being used just to pay off the calculated interest? We haven’t survived the economic downturn, we’re still in it and no we aren’t doing so well, our two economic pillars are shrinking, people are leaving the Island which for a consumer based tax system is a VERY bad thing (Less consumers, less taxes, less revenue). The best way to move forward? See that’s where things will get intersting. The Government is will have to make some decision regarding it’s work force, it’s services and it’s spending. At some point all this money will have to be paid back and then what do you think is going to happen? Take a look at most business for your answer. Consolodation of services, outsourcing and reduction in manpower. No, every single country did not rack up huge amounts of debt and we didn’t have to either. The issue is that people saw this recession coming and the PLP spent like drunken sailors and in several short years turned a surpluss budget into a deficit budget, now we’re in a mess and the Premier and Finance Minister is looking for public buy in. I don’t think this is what people signed up for in the first place!
@ Sean
I am not sure what you are getting at with this post. The next tranche of debt that is due to be repaid will be paid from the sinking fund.
@excellent
You have got to be kidding.
This country is bankrupt…and you are silly enough to congratulate the Premier.
When will you understand that the government has spent and wasted away the future of this island.
I’ll assume you’ll be moving to a country closer to bankruptcy called the united states……
Get real, the country is FAR from bankrupt, but nice try.
I don’t consider it waste building a new dock, schools, technology, police station, and the like.
You may call it waste, but you don’t complain when you ride on the fast ferry.
Are they working today?
The schools and the ferries were built and purchased prior to the government running up the debt. They are irrelevant to the debt discussion. So: are you saying it cost $1.2bn for the dock and the police station? And “technology”?
By the way, the ferries that you’re so proud of, are a shambles. They are falling to pieces through neglect. And for the past year the schedule has been altered to allow for the “fast” ferries to run slowly to save fuel. That’s what happens when you waste the taxpayer’s money on inept overpaid consultants and parties.
@ Mad Dawg
The schools, ferries etc contributed to the existing debt. It is incorrect to say that they had nothing to do with the existing debt. Remember also that govt had debt in 1998 prior to the PLP government.
The debt was historically pretty constant at $100-$150m. Every year, under UBP and the first few years of the PLP. But since 2005 it exploded to the current $1.2bn+.
Anything prior to 2005 was dealt with without creating the extra $1bn or so of debt.
So, what was the extra $1bn of debt for? What did they spend it on? You cannot go back in history and point to expenditures that happened prior to 2005. Those were paid for without increasing debt. Cedarbridge was completed in 1996. Berkely in 2003. Ferries in the years up to 2003. So they had had NOTHING to do with the existing debt.
Honestly, I feel like I’m explaining things to a 6-year-old at times.
No.I live here.Just visiting the US next week.Going to the real Disneyworld.
All the projects you memtioned were grossly over budget with no certainty where all the money went.
A little waste I can handle but taking money for personal gain is outright rotten to the core.
And by the way there are 50 busses waiting to be repaired,the Fast Ferry’s are falling apart,the docks are falling into the sea and there’s no money for upkeep.
It’s called third world dude.
I just can’t believe you used the fast ferries as an example. Where have I heard that before? Seriously? Ferries again??? Wow
If I may ask, why are congratulations in order?
Sigh…..
Read some of the small print.
Original estimated 2010/11 Expenditure $1.064bn – Actual $1.26bn (Up)
Original estimated 2010/11 Professional Services $101m – Actual $119m (Up)
Original estimated 2010/11 Revenue $1.058bn – Actual $991m (Down)
so under the new math if revenue is down and expenses are up thats good? by those numbers the gap is $269 million…I have been forecasting $250 million so I am guessing I am a lock as we have 6 more months of lower tax rates and more expenditures plus the 6 months of pay roll tax holiday for 4000 retail employees that was not in the budget….may have to revise my estimate….so much for doing more with less…..or is that doing less with more……
Has this been audited???
So basicall we are in deep sh!t….
Surprised there is an opposition. Who wants to take over the mess that will be left behind?! You have to at least commend OBA for their willingness!!! Keep on sinking us PLP! Let’s go por carri!
I am surprised that the OBA want to take over from the mess this present Gov have put us in….I listened to the ‘lets talk ” tonight and Maxwell Burgess and Malcolm Butterfield were the guests of Gary Moreno. they have no clue what they were talking about !!!! Maxi looked embarassed …and Malcolm is living in the past… but Gary asked the tough questions..because he knows what the real deal is !!!thank you ZBM for having Mr Moreno on your staff..
The Pre-Budget Report is ground breaking!!
It is admittedly long but given the content, we should expect it to be.
In my opinion, the public will be well served if we take the time to understand what is being asked and then submit comments.
2 important points are included here – the list below are items the Premier is considering as part of the next budget:
■Whether the government should look at revising duty for personal imports at other ports of entry apart from the airport
■Should we reduce the betting tax
■Should we increase sin taxes
■Should we change some of our fee structures in government to support energy efficiency
■Should we look at changing our approach to land taxes
The second point is that the govt will set spending limits for departments whereby their maximum spend will be frozen at next year’s levels for the next 4 years. In practice, this means that all departments wil have a fixed budget for the next 4 years.
I trust that the information presented by the Premier today will be explained in ‘smaller chunks’ for all of us to better understand the implications.
I accept there will be a litany of criticisms about her announcement and I encourage everyone to take the tiem to read it for them selves.
What is the muti year budget strategy?
Multi-year cash limits have been set to freeze overall Government spending at next year’s level for the next 4 fiscal years. This freeze applies to total level of spending, however the Government will have flexibility within Ministries.
Lets look forward to the next budget.
Now thats a well written post.
The Civil Service needs to be dramatically downsized… and these people put to work in the private sector. Private sector employees contribute to the GDP, while Government employees take away from the GDP. That means many routine Government services need to be privatized to reduce the cost of Government. We certainly do not need a Civil Service of 6,000 unproductive people governing a population of just 60,000 – a small town in North America!
This “forecast” still reads like a work of fiction.
Actual revenue for the first 6 months – $421m. Projected for the next 6 months – $499m to $519m. Considering the first 6 months are the strongest cash flow months for government which included corporate bonuses at the old 16% rate and lots of jobs that just aren’t there anymore, how are they going to increase revenue?
I bet they asked Santa for a bucket full of money!
Then there’s expenses. They’ve blown their expense budget by $26m already. They only came up with their budget 6 months ago … Anyway, they expect people will no longer get sick this winter and require health subsidies, gangsta activity will calm down and we can reduce police overtime, we’ve already run out of money for legal aid so can’t blow anymore there.. Madam Cog now only predicts spending $17m more than budget for the next 6 months. Good luck with that. Hope you don’t get sick
They say laughter is the best medicine and I sure did get a chuckle out of reading that pile of !@#$.
Mate, you’ve got it partially, right, the first quarter is the strongest for revenue, one problem however, the budget year starts on April 1, so all those first quarter numbers, land, corporate, bonuses etc, not recorded until the very end of the year.
No chuckles, that’s not how it works. All the salaries and bonuses for the Jan to March quarter incur payroll tax which gets paid in … APRIL ….
All the hotel occupancy taxes, departure tax etc peak in the summer – Q1 and Q2 for government’s fiscal year.
Oct through March revenues – government’s Q3 and Q4 represent some pretty slim pickings. Fewer tourists visiting at that time, less jobs here, not exactly a booming property market for stamp duties …
You are correct, It gets PAID in april, but its accounted for in March. For financial statements the question is when is it approved. Numbers for the first 6 months are for activity in April – September.
C’mon son, just read the report and stop making things up.
Good discussion. What has been reported thus far relates to April to Sept. We will await the results for Oct to Mar.
Ok now up to the next step.
and they will be recorded at the lower rate since Government lowered the tax rate effective April 1st and many, many high end Senior IB people who would pay the maximum left this summer…..gulp……throw in the lower tax for retail spell oh oh…….
Shame Shame, check page 25. A 358% increase in Big SUVs registers to seniors. I thought people were getting over, now this confirms it. That’s annoying!
That’s because there are obviously a large number of younger people registering their SUV’s with there partents/grandparents to evade, yes evade not avoid,the licence fee.
That’s exactly right. We haven’t suddenly had a rash of 75 year-olds buying SUV’s in their hundreds.
It’s their grandchildren registering SUVs to car-less seniors, in order to (a) illegally evade paying TCD license fee and (b) illegally get around the one car per house rule.
Yet another unintended consequence of a government policy.
It amazes me how Bermudians continue to outsmart the government. Nobody thought about this before they passed legislation? Seriously, it should have only been free for people with certain class cars. If a retirement age person can afford an SUV, then they can afford to pay for their license fees. No wonder we have seen so many new SUV’s on the road during a recession!!! This makes SO much sense now.
Here we go – Vote for Me and grassroots are at it – where is bermygirl? now Excellent comes along. you PLP paid bloggers crack me up!
@ Jim Bean
Take time to read the full statement and let me know where you disagree with my comments… I will ‘post to you’ later.
All this is smoke and mirrors. The government is preparing to lay more taxes on the people, and the Cog is just trying to grease the wheel. This Government has overspent, and squandered your money for personal and private gain, and now the Government is broke, and they’re once again digging into your pockets. And they STILL haven’t taken a pay cut like they’re asking you to do. The shadow of Ewart Brown lives on in the Cog.
Some interesting items in the Pre Budget Report. “Harmonising Duty for Personal Imports”… after increasing the airport duty to 35% but leaving the variable rates for import via courier (Mailboxes, IBC etc.) alone I knew it wouldn’t be long before talk of increasing rates similarly across the board would rear it’s ugly head. While this may be an attempt to force people to “Buy Bermuda” it will actually adversely affect the disadvantaged who purchase abroad due to lack of specific items being available in Bermuda. There could be a huge backlash here…
Agreed. This would just make the cost of living 10% more expensive for all of us, deter more foreign companies from investing/employing here as a result, and accelerate the downward spiral of our living standard.
would be riots in the streets!!
What the Premier should have started with was:
Mr Speaker,
I rise today to tell you all what a bloody mess I’ve made of the island’s finances over the last few years and how every man woman and child on the island will have to pay for our over-indulgence for the rest of their lives and their children’s generation’s lives.
And for what? Bermuda is ruined. It’s simple – don’t spend more than you earn and live within your means. EPIC FAIL! Not funny though.
Bermuda is not ruined yet….wait until the debt is at 60% of the GDP. Should ta1ke our Esteemed and Most Glorious Madame Premier and her Cabinet Ministers less than two more years to take our debt level to 4 billion dollars.
Then we will see the rats scurrying from the sunken ship… with their ill gotten gains to their new homes in the Turks and Caicos!