UBP: ‘Government Failed To Save For Rainy Day’

June 27, 2012

“We have repeatedly suggested that the PLP government should take ownership for the impact of its overspending which facilitated the huge mountain of debt,” UBP MP Kim Swan said last night.

Yesterday [June 26] Fitch Ratings downgraded Bermuda to ‘AA’ from ‘AA+’ citing “deteriorating fiscal and government debt ratios and lack of a credible fiscal consolidation strategy.”

Following that news was confirmation that the Bermuda Government borrowed an additional $180 million, spiking Bermuda’s net debt to approximately $1.4 billion.

Mr Swan said, “Whilst Bermuda’s downgrade returns to the AA rating that the PLP inherited in 1998, it was during the boom years that the PLP enjoyed the previous AA+ rating. The Fitch downgrade is also a reflection on Bermuda under performing economically in recent years against the financial position of the country at this point and time.

“Unfortunately, not heeding the recommendations of the UBP, during the boom years the PLP Government failed to save for a rainy day, spending more than it earned for several years. Today, it is important that the PLP Government appreciate that repeated deficit spending, the need to borrow to meet current account deficit and the huge debt has put Bermuda as a country in a negative position.

“The PLP’s justification for the huge debt is that it is an investment in our infrastructure, but that theory gets called into question when one looks at the impact of the plethora of poorly managed projects which led to multi- millions of overspending and untendered projects which have raised the concern of the Auditor General.

“By comparison, the United Bermuda Party government operated with current account surpluses and arguably we would have had Bermuda in a better position financially to cope with these tough times – during our tenure we also engaged in capital projects, building a Senior Secondary School and a Prison – but we operated with current account surpluses which included contributions to pay for capital projects.

“The difference between the UBP and PLP is most noticeable as the accelerated spending of the PLP without reserves is also adversely affecting government services. The Bermuda Government must find a way to balance the budget as a bloated government sector with no reserves has placed Bermuda at risk.

“The United Bermuda Party policy of fiscal prudence would have provided sufficient reserves from the boom years to address the serious financial needs of our people today affected by a prolonged recession.

“We have repeatedly suggested that the PLP government should take ownership for the impact of its overspending which facilitated the huge mountain of debt.

“To get Bermuda on track, we must look forward to returning to balancing our budgets and recognize the need for government to facilitate economic growth, but feel that economic growth must be driven by a rejuvenated private sector not by a further bloated government and a mushrooming debt,” concluded Mr Swan.

Share via email

Read More About: , , ,

Category: All, News, Politics

Comments (33)

Trackback URL | Comments RSS Feed

  1. cant believe it says:

    lets just say UBP won the election, who would run what?? vote PLP

    Like(0)
    Dislike(0)
    • Zombie Apocalypse says:

      Shooting the messenger again? You have nothing else to offer do you.

      Like(0)
      Dislike(0)
    • Unbelievable says:

      Well we know of at least two PLP members and a few OBA members that would run back to UBP becasue they follow the lime light..... So that means Kim would have a house after all!!!!

      Like(0)
      Dislike(0)
  2. Beacon says:

    cant believe it? - more like wont believe it.

    What Kim Swan has stated above is historical FACT - or as you may spin it - an inconvenient truth!

    If Bermuda wants change - and at this point change can only be good - then vote for anyone other than PLP!

    Like(0)
    Dislike(0)
    • The Fact says:

      Agreed. Whether you like the UBP or not, the statement above is based on FACTS.

      Unfortunately, we have yet to see any suggestions from either the UBP nor the OBA for "stimulating" the economy. The best suggestions came from Mr. Swan. Other then that, voting for the PLP/Union will be disastrous.

      Like(0)
      Dislike(0)
  3. TQS says:

    Finally someone has said what I've been thinking for a while. When Bermuda was doing great, they should have been putting money aside. Instead they spent it like it was free money! Who gets into debt while there is a surplus!!People can be book smart and street smart but you also have to have financial management skils. We all know that the trickle down effect happens to Bermuda much later, and instead of preparing for it, they kept spending. Now they want to blame it all on the global recession

    Like(0)
    Dislike(0)
    • RUFKM says:

      You all know so little about history. The gov did put money away, but how does anyone prepare for an unprecedented international event such as the great recession?

      Like(0)
      Dislike(0)
      • media says:

        Since you seem to know. Where is the money they put away?

        Like(0)
        Dislike(0)
      • navin johnson says:

        The Great Recession? RYOOYFM?

        Like(0)
        Dislike(0)
      • Really? says:

        Very easy. Canada is managing fine thanks to it's Governments' careful spending and so did several other countries that are storming out this great recession thanks to responsible governments. Perhaps you and the PLP should have read the story about the Grasshopper and the Ant. My kids are well versed in the moral of that story.

        Like(0)
        Dislike(0)
      • TQS says:

        They put it away alright, never to be seen again. Show us the money RUFKM, we shouldn't be borrowing even before the recession hit. Also, don't you prepare for events, even though you don't know when its going to happen. Whether its a hurricane or a recession. Preparedness helps us to recover faster.

        Like(0)
        Dislike(0)
      • TQS says:

        They put it away alright, never to be seen again. Show us the money RUFKM, we shouldn't be borrowing even before the recession hit. Also, don't you prepare for events, even though you don't know when its going to happen. Whether its a hurricane or a recession. Preparedness helps us to recover faster.

        Like(0)
        Dislike(0)
      • LOL (original TM*) says:

        I'm sorry was it not the PLP who STOPPED paying into the sinking fund?????????

        LOL

        Like(0)
        Dislike(0)
  4. Paul says:

    See, the problem with incompetent, irresponsible Governments such as the current Bermuda Government is that they're very good at the second part of Keynesian counter-cyclical economics: the recession is not a time for austerity, but a time for the Government to take up the slack left by the private sector, but they always conveniently forget the first part: cutting back spending during the boom. Oh, no, the Government acted like kids in a candy store during the boom, didn't they? "Oh, look at all these tax receipts! Spend! Spend! Spend!" They were warned and warned an warned to save during the good years and Bermuda is now paying for their irresponsibility in a big way.

    Like(0)
    Dislike(0)
    • Mussel Pie says:

      EXACTLY. During a boom, you save for the next bust.

      If they had held off building all these overbudget capital projects during the boom, they could be building them now at more competitive pricing and have Bermudians employed instead of sitting in the dark and going hungry.

      No one is "Too Big To Fail".

      Like(0)
      Dislike(0)
  5. hmm says:

    maybe they need to stop taking all these unneeded trips and rolling around in big cars. and fix issues on the island. such as people being homeless and getting our young men into the workforce and off the streets!

    Like(0)
    Dislike(0)
  6. Reverend Pastor says:

    Vote for anything or anybody EXCEPT THE PLP.

    Like(0)
    Dislike(0)
    • Swing Voter says:

      Praise the Lord and speak the truth Pastor....ARISE SWING VOTERS AND SHOW THIS GOVERNMENT THAT WE'RE NOT AFRAID OF CHANGE

      Like(0)
      Dislike(0)
  7. lets get serious! says:

    THEY FAILED PERIOD AND CONTINUE TO DO SO

    Like(0)
    Dislike(0)
  8. navin johnson says:

    a new broom sweeps clean.....

    Like(0)
    Dislike(0)
    • citi zen says:

      We all know that the UBP is shot; but, we do have the OBA.

      Like(0)
      Dislike(0)
  9. cw says:

    The flock of Pink Flamingoes down at the Aquarium could do a better job of running this country than the PLP, I swear! Lmawtfo!

    Like(0)
    Dislike(0)
  10. Kim Smith says:

    To be balanced, while considering if the former government failed to 'save for a rainy day', wouldn't it be required to factor in the cost of all the 'storms of spending' that have happened over the past years?

    Like(0)
    Dislike(0)
  11. Yng Black Mind says:

    We are doomed as a country as the OBA is not a viable option to the PLP - - real talk to the OBA supporters out there. OBA - YOU WILL NOT WIN THE SWING VOTERS BECAUSE YOU CONTINUE TO BLOW SMOKE - - No substance - - just a lot of venom and hate towards the Govt (possibly rightfully so - matter of opinion there).

    Fact: The PLP does not have to win the election - they just have to make sure you lose, and you, OBA, continue to assist them with the loose lips of Bob Richards, Trevor Moniz, Pat G-Pamplin and Mike Fahy - -

    I am at a lost for words as it is very sad and depressing to me - - I don't have options in this next election - none. Thus, the revolution is coming - - prepare.

    Yng Black Mind
    (those who know understand)

    Like(0)
    Dislike(0)
    • Unbelievable says:

      Agreed....So tired of the tit for tat, must be in the media all day everyday, commenting on every damn thing, fall for it every time, voices that I keep hearing that to be honest, I DON'T EVEN HEAR THEM ANYMORE! Its like an irritating sound you constantly hear that you eventually become so used to hearing that you no longer hear it anymore....Shut up and enough already!!! I see imma spend my voting time drinkin something other than the Kool-Aide you ALL are pouring out to the voters....

      Like(0)
      Dislike(0)
      • Fish R Man says:

        Um...that's politics. Watch some of the US political debates and media coverage. According to them Obama has had 4 "watergates" so far.

        Like(0)
        Dislike(0)
        • Unbelievable says:

          Yup. Well all I care about is that everything I have busted my backside and sacrificed for to give my children is left in the same or better state than it was when I got it. And with PLP wiping their as#es with my children's future and OBA fighting to be the spokesperson who is beginning to sound like Charlie Brown's teacher I just feel like we're f^cked.

          Like(0)
          Dislike(0)
    • Zombie Apocalypse says:

      ...um...you do realise this statement was made by the UBP, not the OBA, don't you?

      Like(0)
      Dislike(0)
      • Yng Black Mind says:

        @Zombie Apocalypse:

        Well aware - - my statement above is directly related to the post by the OBA supporters on this article - -not the author of the article nor Mr. Kim Swan - UBP MP.

        Yng Black Mind
        (those who know understand)

        Like(0)
        Dislike(0)
        • LOL (original TM*) says:

          Then vote UBP then..

          LOL

          Like(0)
          Dislike(0)
    • Eastern says:

      @ Yng Black Mind

      Don't you realise that the tax payer is paying the opposition to oppose?

      That's what they are paid to do....oppose the government of the day.
      That's what makes democracy work.....dummy!

      Like(0)
      Dislike(0)
      • Yng Black Mind says:

        @Eastern:

        You clearly did not read my post, nor understand the reasons behind it - let me enlighten you.

        For an Opposition to oppose is valid - - but to oppose for opposition sake is wasteful and useless.

        I have no issues with the Opposition doing its job - - and I respect them for doing their level best; however, my post indicated my opinion on the chances of the opposition becoming the government based on their tendancy to allow certain members (whom I clearly named above) to have fits of "jabba jaw" and pile on hate and anger on the government - not criticism - just hate.

        To call in my intelligence due to my difference of opinion is just lazy on your part - I expect better of you.

        Yng Black Mind
        (those who know understand)

        Like(0)
        Dislike(0)
  12. To put it simple - the PLP has to go.

    Like(0)
    Dislike(0)