Richards ‘Very Disappointed’ In Budget

February 24, 2012

[Updated] Shadow Minister of Finance Bob Richards and Opposition Leader Craig Cannonier spoke about today’s [Feb.24] budget saying it seemed like more of a “story” then dealing with reality.

Mr Richards said, “The Budget did not have a great deal of substance I am afraid. We have very critical issues facing Bermuda, involving how we create jobs by resuscitating business, that has not been addressed at all.

“We are very disappointed, we know its an election year and that will have a big effect on what the Finance Minister says, but their avoidance of the major issues, no mention of what happens with immigration and term limits.

“There is no mention of healthcare costs which are ballooning in this country. They seem to just have glossed over the issues.”

Mr Cannonier said, “We had the one read through. I think what stands out mostly is Bermuda needs to ask the question this going to put food on the table? Is this Budget going to educate our kids better. Is this Budget going create new jobs for Bermudians that are finding themselves laid off…?”

“If you just read through the budget it may just seem like it’s a nice story, but at the end of the day the reality of what Bermudians are feeling and living is a stark difference that what we see here. So we need to ask the critical question – is this answering the woes of average everyday Bermudians?

“It comes across as a Budget thatwe feel is more of a story, as opposed to relating to the real issues in this country,” Mr Cannonier said.

Update 5.27pm: In an additional statement, Mr Richards said, “The Premier described her Budget today as a ‘bridge of stability.’ We see it as a bridge to nowhere.

“The One Bermuda Alliance will deliver its formal Reply to the Budget in one week, but before then we want to express our concern that the Budget will do little to create jobs and nothing to stabilize our precarious financial situation.

“The Budget needed to be focused on growing the economy in ways that generate jobs and economic security for the people of this Island.

“Only through growth can we create new streams of income to support families, broaden opportunity, sustain local businesses and start moving the Island back from the edge of a debt problem that threatens to cripple the future.

“The Budget, in short, needed to present a plan to get the Island on the road to recovery. It did not.Instead, it adds tens-of-millions of dollars to our debt burden.It raids worker pensions and debt-clearance funds to cover shortfalls.

“For the fifth year in a row, it spends more than it earns, continuing us on a path that takes us closer to meltdown. The Budget contains no real plans to address the serious underlying economic problems in our economy. Indeed, it continues to push problems down the road and onto the shoulders of the youngest Bermudians.

“This is a Budget that avoids the hard decisions. This is a Budget that puts the political needs of the Government before the needs of the country,” concluded Mr Richards.

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

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Comments (37)

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  1. Wise Mind says:

    yawnnnnnnnnn………we will await your erudite reply next week Mr. Richards.

    • MinorMatters says:

      …I don’t think J. K. Rowling could have written anything as fanciful, a flight of fancy or divorced from reality. What does little children skipping through neighbourhoods and people going to church on Saturdays and Sundays have to do with a proper Budget for this country that is overburdened by gross over-expenditure???

      • Yup says:

        The “budget” was a joke. PLP is a joke. Bermuda is paying the price.

  2. d-reader says:

    is mr richards ever impressed?
    this is as shocking as knowing the queen speaks english
    bernews it would be nice if you actually wait to there is something newsworthy to print

  3. B Williams says:

    It is my sincere hope that instead of attacking each component of the Budget with “why it won’t work” “the government is incompetent” “we have too much debt” yada yada yada, that the honorable Shadow Minister show us explicitly what HE WOULD DO if he were indeed the Finance Minister with the jurisdiction to effect change.

    Be specific. Be detailed. Anything less will again prove to the electorate why you may be destined to forever being the “Shadow” minister. And try to tone down the condescending, “everybody is an idiot” rhetoric with which you speak. We want to support an alternative but give us a reason to.

    • dee dee says:

      I couldn’t have said it better!!

      • James says:

        I think that I read that Bob / OBA will reply in full in one week.Yup, that’s what he said. I’m no supporter of the OBA or UBP but, neither am I a blind follower of the PLP. I, like you, want to see the OBA response and will wait as I do want them to provide details, not some knee jerk reaction.
        Make no mistake we (whomever governs this island) have to get it right and soon.

    • Clarity says:

      Ditto! I await the same…

    • Tommy Chong says:

      I don’t think bob really knows the answers. I think he’s just playing craig says also. OK! Who else has gotten the invitation to play craig says & how come mine hasn’t come yet? Even if I will respectfully decline its still a matter of common courtesy.

  4. It is interesting to note that most of the comments about the budget are relatively sober. My assumption is that the budget is received by most to be practical under the circumstances. The Premier seems to have picked up on universal abuses for car registrations and made a sensibleadjustment to the land tax exemptions.

    I did think there would be an adjustment to free bus fares but I guess the Premier prefers to keep the individual pressure on families to a minimum.

    For the investors out there, you will have an opportunity to take your money out of the banks and buy into the proposed local bond. Another good idea.

    Overall – a little more debt but headed in the right direction.

    • Shaking the Head says:

      A little more debt? This time next year it will be another $200mn at least, so total about $1.5bn Is this what you call a little?
      What is the plan to repay it? Revenue won’t start to recover for at least 3 years, so 3 more lots of $200mn.
      Good luck with the bond idea – I won’t be going anywhere near it.

  5. is B..Leaving says:

    Keep it real Bob ,she can’t smash your balls and emasculate you like she emasculated Lister . Point out to the people the error of her ways . Let them know and understand that she allowed Ewart to have his way with her ministry for four expensive years and now she is left to write fiction to a non-fiction debacle .
    Ewart was a nightmare to her and she didn’t have the guts to stare him down , but she is quick to flog Bobbie for speaking the truth , after all the foolishness she swallowed from Ewart .

  6. jt says:

    Vote for change. Vote out incompetence. I laugh at people who applaud things like car registrations etc. – big whoop. Meaningless in the scheme of things. Look at the projected debt increase. Look at the fact that it is likely to be worse than that based on the complete inability to even come close to projections in the previous budgets. Look at the anchor being thrown over the necks of the next several generations and ask how the budget adresses that. It does not.

  7. jt says:

    Local bond offering – who can have confidence in that? People wanting their money out of local banks are getting their money out of Bermuda.

  8. Itsaboutallofus says:

    Of course Mr. Richards is disappointed in the Budget – there is no one else in the world that is qualified to speak on financial matters than himself. Unfortunately it is unlikely he will ever be Minister of Finance.

    I found the budget to be practical and realistic. Little to no financial hardship will be additionally felt on individuals and the seniors to which some new fees will apply will only be the ones who can afford it anyway. It was empathetic without being enabling.

    I am proud. Well done Premier Cox.

  9. LaVerne Furbert says:

    It should be obvious that Bob Richards was flabergasted. What I think was most interesting about his presentation was that the Leader of the OBA, Craig Cannonier, was standing at his side, and had nothing to say, as usual.

    I’m wondering what his thoughts are about the suspension of pension payments by employers/employees.

    • Take a lesson says:

      Unlike you Laverne, he understands that when you are out of your league, you keep your mouth closed.

      The unfortunate truth is that Bob can’t define a league. He is critical with no solutions.

    • Hmmmm says:

      Read the article, Cannonier gave a good response….is reading too hard. Videos and spouting your only output?

    • sandgrownan says:

      PLP failure.

      • sticky says:

        i guess u mean the blacks when u say kool aid drinkers, nice work bigot.

  10. Triangle Drifter says:

    Has an opposition finance minister EVER been happy with a Government budget???? The koolaid drinkers here have short memories. All those years of UBP balanced budgets, sometimes even surplus budgets, the PLP opposition finance minister was right there telling them that they were doing it all wrong. They were oh so dissapointed. They could do so much better, without providing any details, of course. Thats politics.

  11. No says:

    Spend and spin continues !

  12. Specialgirl4you says:

    Overall, I think that the budget was fair and reasonable, considering the economic times we are faced with. I think there is little for Mr Richards and his followers to pick at, but of course they will. It would be best if Mr Richards comes up with solution and attempt to save himself from his lack of patriotism for Bermuda. Overall, well done Madame Premier Cox. Mr. Richards needs to think more carefully before he speaks, he is not the whiz kid of “Economics” as many suggest he is.

    • Triangle Drifter says:

      Hmmmm…& what qualifications do YOU have to enable you to make a judgement on Bob Richards abilities on anything?

      The budget is a nice big glass of koolaid. Of course the koolaid drinkers will like it, especially if the get a Government paycheck.

      • Fully Qualified says:

        I have an Honors Economics degree and an Honors MBA Degree in Economics from top tier US schools. I taught Economics at the college level and currently am an investment manager at a major US bank. I am more than qualified to assess the credentials of Bob Richards, Robert Stewart, Larry Burchall and the like. Mr. Richards managed about 10M at his hey day in the investment space and has done a series of little things (all inside Bermuda) His wife is the brain. Stewart (who came to Bermuda very young with a high school education) as a police officer nor Larry Burchall have no qualifications that would make them an Economist! What a joke. Craig Simmons is the closest thing you have and even at times his views are a bit myopic. He lacks a global perspective again from having been no where but Bermuda

        • navin johnson says:

          so can you enlighten Bermuda Fully Qualified?

          • Fully Qualified says:

            My three cents…

            The key is to get money moving again. Money must move to fund a recovery. With the government unable to spend, you must look to and depend on the private sector. The private sector is owing $5B you say? True, but the key is – the institutions (that hold the private debt) that can turn things around for you in an INSTANT – are the banks. As it is credit and poorly structured instruments that got us all into this mess, it is only the financial system that can get you out of it. The Banks cannot continue to charge 4-5 points above the 30 year US mortgage rate which is 3.75%. Their spreads have not been touched in all this. HSBC is recording record profits at your expense. While they lay of 8-10 Bermudians every month. They have gotten rid of more than 400 jobs since the somewhat naive PLP government allowed them in. Simple Economics 101. Why is it that a mortgage in the states cost 3.75% and in Bermuda it is north of 7%. Capital is mobile and has no cost of rent, overhead associated with it. More than ever the banks are using USD to fund BMD mortgages. See BMA report so they are charging you twice what they are paying for it. And you complain about the retailers? You should be directing your efforts to the banks. They are laughing all the way to the Bank…remember their interest is NOT Bermuda and the local economy. Their responsibility is to their shareholders so a shrinking Bermuda economy means they can now start to formulate their exit strategy. They can afford to write off a relatively small “loan book” that they have made millions off for years. They have done so in other jurisdictions. HSBC is foreign owned and Butterfield Bank is Canadian and Capital G considers each loan a selection for the family portfolio so won’t / can’t support the local market to any large degree. How’d they get to be the family get to be the single largest property owner in Bermuda?

            When the cost of capital comes down, you will have developers / investors interested once again in this market. The risk tied to the cost of development is way too high right now so you won’t have any developers. If you lend money at say 5%, yes you are making less on the loan – but you are helping to re-invigorate the local economy. That has to be the objective over the next 2 years. Invigorate the economy and the ONLY way to do that sustainably is to reduce the cost thus increasing the velocity of money. This is the strategy undertaken by Obama. He called it a bail out. But with government money, debt issuance, the banks were able to write off some loans, re-price existing loans and put the US economy on the recovery track that it is clearly on.

            Be reminded too that as the non performing loans increase at the banks, their credit ratings deteriorate. When that happens, Bermuda’s credit rating deteriorates. And then what happens? The banks pull out. The IB companies pull out (they can’t operate in subpar jurisdictions) and the cost of debt goes through the roof. And overnight, yes overnight, Bermuda turns third world.

            So again – focus on the financial system. Interest rates must come down. The banks can’t legislate it but certainly collective pressure must be directed to make the rates come down. This will be a lot more difficult for still inflated Butterfield but this is key. A reduction by 2 points for the household holding a $1M mortgage translates to a reduction in monthly payment by $1400. She is turn can spend that money at the restaurants, retailers….She can reduce the rent on her 1 bedroom apartment….She can get her hair done at the beauty shop…buy a new airconditioning system….She can update her vacation home or guest house…The multiplier effect on a population of this size would be significant and immediate.

            • Navin Johnson says:

              And you think troubled bank of butterflied is going to reduce rates with the loan portfolio they have? And HSBC would do the same? Never happen….there is no demand for local real estate as there is oversupply and a rental market that has been reduced.. With this governments track record of overestimating revenue and underestimating expenses this budget is a fairy tale to appeal to its electorate. Hoping that people will remortgage their homes and suspend their pension contributions and then spend the cash shows that they are asking Bermuda to be as financially as irresponsible as they are.. Sadly they ignored austerity in order to get elected and we all sink further and the likelihood of recovery in 2013 is so far fetched it is beyond belief…socking it to seniors and then turn around and ask them to finance their folly via a bond issue demonstrates their delusion but they have to stay in power regardless of the damage they have done.

    • Face the Nation says:

      The road to financial slavery is oft-times littered with good intentions ( read I.O.U’s ). Have you seen , or rather felt the conditions of the roads through-out Hamilton . Deplorable and a rather obvious sign of fiscal decay .

      • Tommy Chong says:

        Maybe your vehicle’s suspension needs to be checked? I know a real good but unemployed Bermudian mechanic.

        • Face the Nation says:

          Every good Bermudian mechanic worth his salt is always over-employed during a recession ,as no-one has the cash to buy a new car (sales are way down ) , they repair . So as usual Tommy your blowing Rizla smoke out of your a$$z .

          • Tommy Chong says:

            Not if they want to get paid their worth in salt. Nowadays if a Bermudian mechanic asked to get a raise for cost of living inflation their employer makes them redundant & brings in a mechanic who won’t have to ask for a raise because their cost of living is less. What is the Bermudian mechanic to do? Call the immigration hotline & mess up any chance he has of getting a reference for another job? No! The Bermudian mechanic plays nice gets his reference & tries to get another somewhere with an employer thats loyal to the Bermudian workforce. Meanwhile the Bermudian mechanic’s employer ups their service charges by 20% & cries, “times are hard I need to charge enough for to keep my workers paid.”

            You are a proctologist’s dream thats why your against good intentions.

  13. FunnyPolitricks says:

    It is funny how the budget doesn’t mention that the government has forced the trade unions to make their members take the 8% and 9.5% pay cut. The real pinch comes next year when pension contributions start again…..

  14. Cancer says:

    Bob knows best! We shud listen to Bob. After all he is the next finance minister. Bob your a financial genius. Paula can’t even touch you! Finance Minister in waiting (I’m saying June Bob – it’s coming)

    • Specialgirl4you says:

      @Cancer, Reread what Fully Qualified says: Mr. Richards managed about 10M at his hey day in the investment space and has done a series of little things (all inside Bermuda) His wife is the brain. So does not look like he is hte best after all.

  15. Argosy says:

    Let’s see how that promised bond offering goes!

    When’s it coming anyway? Definitely NOT before the election…wonder why…

  16. David says:

    Major US bank investment managers perpetrated the biggest crime against US taxpayers in the history of economics so perhaps Fully Qualified should qualify his vitriol against Bob , Craig, et al with some actual common sense advice for Bermuda. Of course even my dearly departed Granny could have told us that you can’t spend what you aint got – not for long anyway.
    This budget is like putting that extra line on the boat when a big blow is coming – it won’t make any difference if the mooring drags but at least you can tell the insurance company that you tried something.
    Hey here’s some economics 101 – Things are only worth what someone else is willing to pay for them.
    At what point in Bermuda do we decide that nothing here is worth what has been paid for it?