Chamber: ‘Business As Usual Budget’

February 24, 2012

Government is spending far more than taxpayers can afford to pay, the Bermuda Chamber of Commerce Economics Advisory Committee said today [Feb.24] following the release of the 2012/13 Budget.

Speaking on behalf of The Chamber, economist Peter Everson noted; “There were no unexpected surprises in this year’s budget, and as many suspected, it was little more than a ‘business as usual’ election budget.

“However, the absence of increases in general taxation has been well received by Chamber members.

“Our Restaurant, Hotel and Retail members are also pleased to note that their much needed Payroll Tax relief as been extended. Similarly, many retailers will be cautiously optimistic about the decision to harmonize taxation at a rate of 25%.

“In the view of the Economics Advisory Committee, this decision simply corrects a long-standing anomaly and brings Bermuda into line with internationally accepted tax practices.

“Many will also be encouraged by the Premier’s reference to promoting new ways of enhancing competitiveness to facilitate the establishment of new business by “cutting through red tape”.

“It is hoped that this policy decision translates not only into a streamlining of the process for international business but also the development of hotel properties in Bermuda.”

Mr. Everson went on to note: “The Chamber was particularly heartened by the announcement of the introduction of a public Bond Issue.

“This is something we have been very actively encouraging Government to consider since 2009. The Bond Issue will strengthen the investment sector and stimulate the Capital Markets, and provide much needed diversification in the investment industry.

The Chamber is “disappointed that there are no specific plans or programs proposed in this budget to arrest the shrinking economy.The economy will not stop shrinking by itself, Government assistance is required.

“The Government’s intention to take money from the Sinking Fund to pay interest, and borrow from the pension funds does nothing to change the reality that Government is spending far more than taxpayers can afford to pay.

“Equally concerning is the decision to allow private industry to voluntarily suspend employee and employer contributions to the Occupational Pension Act. While there may be those in the short term who see this as an opportunity to improve cash flow, the long-term ramifications can only be damaging, and employees under the age of forty should be very concerned.”

Mr. Everson pointed out that; “As of March 1st, 2011 the Government’s revenue deficit stood at $405 million, and included the $105 million shortfall in the Government Pension and Health plan.

“Even with borrowing from the sinking Fund and Pension plan, the Government will still be short $172 million in 2013, with no viable means of repayment. Added to which there will still be an additional $115 million short fall in the sinking Fund and Pension plan.”

In conclusion, Mr. Everson stated; “Government can only service its debt by reducing spending and increasing revenues and there are no signs of plans to do either in this budget.”

The broader Chamber membership will have an opportunity to weigh in on the budget during Monday’s annual Budget Breakfast; when Mr. Everson will join the Premier and Digicel CEO Wayne Caines on a panel, moderated by PwC Partner, Caroline Foulger. Subsequent releases are expected in due course from the various Chamber Divisions.

View all our coverage of the 2012/13 Budget here.

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Comments (11)

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  1. yeesh says:

    Still living waaaayyyy above our means.

  2. Shaking the Head says:

    I shall be interested to see how it is legal to stop a person in the Private Sector from receiving the benefit of pension contributions. Government is effectively breaking an private employment contract if that contract requires the employer to pay into a pension plan.

  3. Triangle Drifter says:

    A feel good election budget for sure. That wheelbarrow full of debt gets pushed further down the road for future generations to deal with.

  4. Truth is killing' me... says:

    This is bullsh&t people. Your pensions are being raped right under your noses!!!

  5. Triangle Drifter says:

    She told the blind followers what they wanted to hear. The harsh reality will come & bite them real soon.

  6. is B..Leaving says:

    Makes me wonder how Stephen Todd would have called it ?

  7. drunken Ursula says:

    oh you poor people get over it ….PLP 4ever…..

    • DUB says:

      …have a look at the numbers Drunken Ursula. Be honest and objective, if you can,

      National debt by year
      1999: $163.5m; Minister: E. Cox; Premier: J. Smith

      2000: $162.3m; Minister: E. Cox; Premier: J. Smith

      2001: $161.1m; Minister: E. Cox; Premier: J. Smith

      2002: $160.0m; Minister: E. Cox; Premier: J. Smith

      2003: $160.0m; Minister: E. Cox; Premier: J. Smith/A. Scott

      2004: $160.0m; Minister: E. and P. Cox; Premier: A. Scott

      2005: $175.0m; Minister: P. Cox; Premier: A. Scott

      2006: $225.0m; Minister: P. Cox; Premier: A. Scott/E. Brown

      2007: $255.0m; Minister: P. Cox; Premier: E. Brown

      2008: $345.0m; Minister: P. Cox; Premier: E. Brown

      2009: $535.0m; Minister: P. Cox; Premier: E. Brown

      2010: $679.0m; Minister: P. Cox; Premier: E. Brown

    • observer says:

      Ask Steven Todd what he thinks, then again he has flip floped over to the PLP, there is no guessing what he believes?

  8. Trident says:

    PLP 4 Ever. Get over it already.

  9. Trident says:

    …have a look at the numbers. Be honest and objective, if you can,

    1999: PLP beats UBP

    2000: PLP beats UBP

    2001: PLP beats UBP

    2002: PLP beats UBP

    2003: PLP beats UBP

    2004: PLP beats UBP

    2005: PLP beats UBP

    2006: PLP beats UBP

    2007: PLP beats UBP

    2008: PLP beats BDA & UBP

    2009: PLP beats BDA & UBP

    2010: UBP dies, BDA dies