[Updated with video] Shadow Finance Minister Bob Richards addressed the recent financial statements tabled by the Government, saying in the corporate world this type of financial planning would “get the planners fired.”
“The financial results released by the government on Friday stand as an indictment of its stewardship of the public purse,” said Mr Richards.
“First let’s start with the obvious. This is the fourth consecutive report that has not received a clean audit from the Auditor General, meaning that there remain serious questions about the integrity of the numbers. These questions, these doubts and uncertainties about the handling of the people’s money have become the norm for the government. It is disgraceful.
“The figures themselves would make any Bermudian wonder what is the point of the whole budget process because actual results differ so much from budgeted objectives.
“I have adjusted for several large non-cash expenses so that Bermudians can compare actual results to what the government said it intended to do one year ago when it presented its Budget in February 2010.
“Revenues were $62 million less than forecast, while cash expenses were $67 million more than forecast. The Current Account deficit which was forecast to be $67.5 million turned out to be a deficit of $128.7 million. That’s not just a miss, that’s a big miss – a 90% difference, or $61 million.
“The budgeted expectations and actual figures were not even close. The overall government cash deficit was $164.6 million. Expenses continued to be out of control.
- “Employee costs were 16% over budget
- Healthcare 19% over budget
- Financial assistance 30% over budget
- Interest on debt was 50% over budget.
“In the corporate world this type of financial planning would get the planners fired. Voters will get that chance soon. The Auditor’s report raises once again deeply serious questions about this government’s ability to manage the public purse.
“One of them is credibility. Who can believe what this minister will say in her Budget speech this coming Friday when the Auditor for four years running has not approved the numbers, or when the Minister’s directives to cut back spending are ignored by her own colleagues?
“The missed forecasts, the ever deepening debt suggest the government has lost control of the budget, and in the process weakened Bermuda’s ability to control its own destiny.
“Debt continues to rise at a faster rate than anticipated. Despite giving itself $200 million more room for borrowing by changing the definition of Public Debt last year, government debt may be on the verge of piercing the Island’s official debt ceiling of $1.25 billion.
“The stark debt situation explains the government’s eagerness to get its hands on $62 million from employees’ pension contributions to fund its day-to-day operations. Without this diversion there would have been no way to avoid raising the debt ceiling before the election. It may still be unavoidable.
“Government is using employees pension contributions to avoid this embarrassment at this politically sensitive time because even though the $62 million is essentially borrowing from the future, it will not be classified as debt.
“So why should everyday Bermudians care about government budget numbers? Because they have a direct impact on your lives. The deeper the hole the government digs for Bermuda, the deeper it’s going to reach into your pockets to make up for its mistakes,” concluded Mr Richards.
A handout provided by Mr Richards is below, click ‘Fullscreen’ for greater clarity: