Lister: Challenge Is To Effectively Manage Money

August 7, 2013

Finance Minister Bob Richards has made a “bold move” in borrowing $750 million, the challenge is to “effectively manage this money over the next three years and to bring financial success to the people of Bermuda,” said Independent MP Terry Lister.

Last week the Government confirmed they borrowed $750 million, in the form of 10-year bonds at a yield of 4.85%. Minister Richards said they plan to borrow another $50 million by offering a $50 million Bermuda dollar local issue.

Minister Richards discussing the bond issue earlier this week:

Mr Lister said, “Parliament recently passed the appropriate legislation allowing the Minister to borrow $800M. At the time the Minister stated that some portion of the borrowing would be in the local market to allow Bermudians to invest in their country. I am surprised that borrowing of only $50M has been set aside for Bermudians to take up.

“I believe the Minister should be invited to explain why so little has been made available to local investors especially since the money raised in Bermuda could in fact be money from persons based in Bermuda who have Bermuda dollars but may not be Bermudian. This was an opportunity to have Bermudians demonstrate their belief in country and to do more than simply sing “Proud to be Bermudian”.

“While the Minister has indicated that he believes this financial maneuver could save up to $20M, he cannot crystal ball this and there is a very realistic possibility that the savings could be much smaller than he projects. If this proves to be so, there will without doubt be many who will speak against the Minster and the Government for taking this action. The real benefit is that by completing this transaction Bermuda Government has secured the money needed to operate over the next three fiscal years without having to go back to the marketplace and receiving a less welcoming response.

“The bigger challenge is using the money most effectively. With the money in hand there will be the great temptation to use it for “important” projects that would be left in abeyance if the money was not readily available. Each ministry will put forward requests for money that is desired for such projects and the Finance Minister will have to ensure that his annual Budget does not burst through the negative cash position that has been projected when raising this money. Should this happen the ratings agencies will not treat Bermuda kindly. Likewise, there will have to be a sound definition of what constitutes emergency spending so that money is not used up by this means. The Minister will have to be firm in dealing with his Cabinet partners to ensure that needs and wants are distinguished and emergencies are understood.

“The Finance Minister will be required to continue to have cost control and reduction at the front of his agenda. Without this, Government will find that the cost of government currently in existence will be little changed in a few years time. To move towards a balanced Current Account the Minister must reduce costs. To date the moves made by Government do not appear to be generating any significant savings in the operating costs. With a current account deficit of over $200M , it will take more precise savings by Government to realize success. At the same time, Government must remember the job of government is basically service delivery to the populace thus as costs are reduced there must be a commitment to service delivery. This should mean finding a better way of doing those things that must be done and finding an acceptable way of eliminating those things that need not be done any longer.

“Ultimately, the country will have a balanced Budget when there is revenue growth. The reduction is revenues over the past several years has made a huge dent in our financial fortunes. Government must continue to look, along with the business sector, for new opportunities. When these appear the legislature must move quickly to create the legal and tax framework that will encourage the growth we seek. In my view, government must take a hard look at this policy of tax breaks that it has embraced, realizing that every tax dollar forgone is a dollar not available to reduce the deficit and to help Government rebound.

“The Minister has made a bold move in securing these monies, the challenge is to effectively manage this money over the next three years and to bring financial success to the people of Bermuda,” concluded Mr Lister.

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Comments (26)

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  1. Sailor says:

    Where was this guy before the last election?
    If the PLP won the last election would he be an Independent today?
    Politics are full of tricks!

    • Out of flight says:

      I bought a house for $850,000 so I have an asset. what did we get for our $800 million dollar loan and HOW do we pay that and others back. I did NOT hear the plan.

  2. Concerned Citizen says:

    A long analysis /commentary, but no real solutions. I expect to hear of some ways that the Govt can reduce cost without sacrificing service delivery, and the other revenue streams that that they must create in order to balance the current account. What Terry Lister is saying falls short of this by a country mile. Yup, accountants are not economist, and Terry Lister, for all his experience, doesn’t bring anything to the table with these remarks. minister Bob Richards has laid out his plan, and the PLP have offered him additional solutions for revenue generation, which is what Bermuda needs right now……critical thinking. I’m glad Lister is an independent MP as I don’t have any confidence that he can be a good finance Minister for any govt. Thank God that Richards is the Minister and David Burt is his shadow minister, as they both seem very capable, but Lister seems to be an isolated political figure with very little to offer in term of of our financial affairs……and yes, he is an accountant! Keep up the good work Minister Richards, and to the PLP under Marc Bean and David Burt in finance, you also keep up the good work of offering ideas and solutions that the OBA govt can work with. Terry Lister, please retire, as your time s done, and your contributions are very limited at this critical juncture in our history!

    • Wow says:

      It sounds more like you have a grudge against Terry and are the one with no real solutions!

  3. Lebron says:

    Oh my sides, hahaha. Terry Lister? I mean seriously you wouldn’t trust him with your bus money.

    At least Bob Richards has a brain.

    • Impressive says:

      Has Bob Richards ever been a partner in a big 5 Accounting/Auditing firm???

      • Concerned Citizen says:

        Terry Lister cannot be trusted with bus fare is an understatement. Selfish and power hungry comes to mind and when he can’t get his way………..we see what happens? Again, being an accountant does not make one capable of shaping economic policy, hence his weak commentary. Just my opinion from what I’ve seen and know about Terry.

        • Impressive says:

          i have no problem with what you stated, i addressed that fact that you said”At Least Bob Richards has a brain”.. but you seem to know him alot more than me, so I take your point..

        • Impressive says:

          I also take your point about accounting and economic policy,, Accountants and Economists are as far apart as winter and summer ideally.. Many people don’t recognize this.. economists consider things such as opportunity costs etc, which can’t be accurately quantified by an accountant,, lol

      • Concerned Citizen says:

        Neither has David Burt, but I would listen to Bob Richards and David Burt before Terry Lister…..why? Because both of them studied economics, and they make sense!

        • Impressive says:

          I think David Burt is very intelligent, ask Shawn Crockwell, lol,, he blew the socks of him in a political debate a few years ago,, I would never ever forget that moment, i have never seen a politician be so outclassed like that ever in Bermuda.

          I think Bob is intelligent, but his personality (which admittedly doesnt have anything to do with his intelligence, except for the fact that with all his intelligence, he still cant see what is preventing him from being a great politician and this is his condescending persona). If he had the humility of Grant Gibbons or say the charm of Wayne Scott, he would be a shoe in for the Premier position, but sadly he is very rigid and arrogant, and just blahhh.

          • Impressive says:

            aloof is the word I am thinking..

            • Triangle Drifter says:

              I don’t care much what his personality is. Is he the best we have for the job? Most likely, yes. Much the same was said about David Saul. He had a schoolmaster persona about him. So what! He also knew what he was doing.

              We already had Doc Hollywood. Look where the Mr Popularity got us! We can’t afford another one for a long long time.

              • Impressive says:

                I am traditionally a PLP supporter, but i quite like David Saul actually.. He certainly has that authoritative “vibe” about him, but he was also very diplomatic and he didnt come across (in my humble opinion) as he has all the answers in the manner that Bob Richards does (or did prior to December 17, 2013)

                • Impressive says:

                  EDIT December 17, 2012

                • Victor says:

                  You have got to be joking – David Saul was a pedantic little begrudger who loved putting people down – and for much of his career Sir David Gibbon’s hatchet man. He was oly ever there to stroke his own ego.

          • Concerned Citizen says:

            Wayne Scott?!! Please, do not go there. He and Sylvan Richards are the biggest embarrassments in politics.

            • Out of flight says:

              Yes. Everyone thinks they are jokers. Not one sports policy announced and not one cultural idea.

            • Impressive says:

              lolllll i will leave that one alone,, i did you the word charming, i didnt say competent,, lol

            • Impressive says:

              Bigger embarrassment than the current Premier??? I dont think anybody can take that title from this Cannonier fella. This is the first time in my life than I am actually embarrassed to tell my overseas friends and associates who is the leader of my country and I am not joking.. So if Wayne and Sylvan are worse than him,, we are in serious danger.

  4. Charles Hollis says:

    I believe that if more $50m was offered to the local Bermuda market, it may have a more negative effect on our local banks that currently have lower ratings due to bad mortgages which has resulted in forecloseres.

  5. campervan says:

    Terry not so long ago when things seemed to be booming you took a stand on “9 years max, no exceptions” to the work permit rule.
    Having seen the results of intellectual/financial capital flight….Your Country is now reduced to begging for loans and in an very precarious situation, I assume that you have now changed your mind?

  6. And ... says:

    Isn’t this the guy that claimed he was “bright as two buttons”? Seems the partners outside of Bermuda didn’t agree.

  7. CommonSensenBda says:

    Mr. Lister, you were in Parliament when, as you put it, “the Economy was for the Elite and the Privileged, under your buddy Dr. Brown. Where were the “bright ideas” coming from since 2010 – 2012. How many businesses were incorporated from foreign investments. Your party Mr. Lister didn’t have a clue as to how to reduce our debt…They just keep insisting that there WAS NO DEBT. How many times were we told “DO MORE WITH LESS” while the budget was continually overspent by the tens of millions. You finally admitted that you didn’t have a clue and begged to O.B.A. for their solutions. THAT IS WAY THEY WON THE ELECTION.

  8. Out of flight says:

    Why attack Terry when so many of you are just arm chair critics who would NEVER step up and lick a stamp? You wanted him to do a better job and now he is so stop attacking him with your pettiness when you yourselves are lacking in so many areas.

  9. Victor says:

    I’ve always been curious to know the real reason Terry left Deloitte, but nobody wants to go on record…