BPSU President Responds To 2015/16 Budget

February 23, 2015

“Analysis of the budget does not leave me with a sense of optimism or any sign that Bermuda is on the road to recovery,” Bermuda Public Services Union [BPSU] President Jason Hayward said.

Responding to the recently delivered 2015/16 Budget, Mr Hayward said, “I will refrain from being overly critical on the specifics of the Minister of Finance’s 2015/16 Budget, as I don’t envy the burden that has been placed on his shoulders.

“The combined reality of a poor economy and Government’s poor financial position creates an environment in which any combination of revenue generating or expenditure reduction ideas would have been met with an increased level of negative reaction.

“Analysis of the budget does not leave me with a sense of optimism or any sign that Bermuda is on the road to recovery.

“The job losses anticipated in the international business and public sectors, combined with the 790 job losses reported in 2014, and the thousands already unemployed will inevitably create the perfect storm, as the local economy will not be able to absorb the impact of new unemployment coupled with the current unemployment levels.

“There are two elements of the budget that I find disturbing. Employees in the hotel, restaurant and retail sectors will have to absorb the full brunt of the roll back in payroll tax concessions.

“This will ultimately mean that employees will experience a reduction in salary of 5.5% starting April 2015, while their employers will pay no additional taxes. That is an injustice that must be corrected, the employers should be made responsible for a portion of the applicable 5.5% payroll tax rate.

“Secondly, I am alarmed that the Minister of Finance has made the decision to suspend a portion of Government’s matching contribution to the Public Service Superannuation Fund [PSSF],” added Mr. Hayward.

“The last actuarial report on the PSSF highlighted that unfunded liability was approximately $1 billion and if all remained unchanged the fund would run dry by 2045. It baffles me as to why the Minister of Finance would seek to suspend contributions further threatening the sustainability of the Fund.”

Mr. Hayward’s full response follows below:

I will refrain from being overly critical on the specifics of the Minister of Finance’s 2015/16 Budget, as I don’t envy the burden that has been placed on his shoulders. The combined reality of a poor economy and Government’s poor financial position creates an environment in which any combination of revenue generating or expenditure reduction ideas would have been met with an increased level of negative reaction.

Analysis of the budget does not leave me with a sense of optimism or any sign that Bermuda is on the road to recovery. The job losses anticipated in the international business and public sectors, combined with the 790 job losses reported in 2014, and the thousands already unemployed will inevitably create the perfect storm, as the local economy will not be able to absorb the impact of new unemployment coupled with the current unemployment levels.

There are two elements of the budget that I find disturbing. Employees in the hotel, restaurant and retail sectors will have to absorb the full brunt of the roll back in payroll tax concessions. This will ultimately mean that employees will experience a reduction in salary of 5.5% starting April 2015, while their employers will pay no additional taxes. That is an injustice that must be corrected, the employers should be made responsible for a portion of the applicable 5.5% payroll tax rate.

Secondly, I am alarmed that the Minister of Finance has made the decision to suspend a portion of Government’s matching contribution to the Public Service Superannuation Fund [PSSF]. The last actuarial report on the PSSF highlighted that unfunded liability was approximately $1 billion and if all remained unchanged the fund would run dry by 2045. It baffles me as to why the Minister of Finance would seek to suspend contributions further threatening the sustainability of the Fund. It seems as though the Minister is sabotaging the Fund’s sustainability and the likelihood of public service employees receiving a pension in the future. I believe that public service employees should have more control of the oversight and administration of their pensions in order to prohibit the practice of Government using pension money at their will.

Prior to this budget, the Minister of Finance has placed blame on the previous Government, now we see that he and his colleagues are shifting the blame for the need to make tough decisions on the unions. The time for playing the blame game is over. The time for real solutions is now!

Will this budget assist the Government in improving its financial position? I believe so, however, the real question should be ’At what cost to society?’ This budget does nothing to help those who are struggling, and it looks like it will ultimately increase the pool of persons that will fall into that category.

The Government seems to be stuck between a rock and a hard place. However, the Government has failed to bring together all critical stakeholders in the community so that meaningful dialogue concentrated on finding solutions to the Country’s problems can occur. This is something that must be done during the next fiscal period. In my opinion, the Economic Tripartite meetings led by the Minister of Home Affairs have been a complete waste of money and time. Unless all stakeholders are willing to pull together, this gem we call Bermuda will face economic disaster. We must overcome the political, racial and economic divide and work together for the betterment of the Country.

- Jason Hayward BPSU President

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Comments (36)

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  1. James says:

    “There are two elements of the budget that I find disturbing. Employees in the hotel, restaurant and retail sectors will have to absorb the full brunt of the roll back in payroll tax concessions.

    “This will ultimately mean that employees will experience a reduction in salary of 5.5% starting April 2015, while their employers will pay no additional taxes. That is an injustice that must be corrected, the employers should be made responsible for a portion of the applicable 5.5% payroll tax rate.”

    Hayward is 100% incorrect on this. Employers will pay half of this rate. Mr. Richards was clear when he made his statement.

    • what... says:

      The “payroll tax concessions” we temporary and the workers have always known this.. They should feel themselves lucky that they had this consession. Unlike the rest of us that have paying the full payroll tax all these years!!

    • Build a Better Bermuda says:

      Actually he is correct in his statement, in that the roll back of the payroll tax consessions for the retail and hospitality is being done on the employee portion of the consession and being left as is for the employer, what I find disturbing about this from Mr. Hayward is his shortsightedness that he feels the employer should bear this burden as well. The fact hasn’t changed that most of the employers in these industries are still struggling to make ends meet. If you cut into their thin revenues, then more businesses are going to go under and we are going to have more unemployed and less government revenues than if we taxed both the employer and employee. The further hypocrisy of Mr. Hayward’s response is that not that long ago he and BTUC proposed ending the tax consessions.
      It is long past time that this man needs to go back to his membership and have a full and open honest discussion and an actual vote with them about furlough days solutions, because while he may have convinced barely more than 5% of his memebership that they should be paying him, over the last few months, he has yet to show he is worth the money.

  2. BT Checker says:

    When the thousands of public union members march because of the question of a furlough day (or “disrespect” shown to them – which is even a worse reason to march) when thousands of people have been made redundant and NOT ONE public sector worker has been made redundant this ship has sailed and is going to sink I’m sad to say.

    Its very easy to cut the deficit – cut 500 public sector jobs. Saves 50 million dollars a year. Instead the OBA didn’t bite the bullet and we are on the road to ruin. Hold on to you dark and stormys.

    • kle says:

      Just out of curiosity when you cut those 500 jobs, where do these people find other sources of income? I totally agree that some jobs can possibly go, but at the same time are we asking these 500 people to (a) leave the Island, (b) knock on the door of financial assistance, (c) resort to illegal activity, (d) add to the homeless population and we can go on and on. What I am really saying is that Bermuda is an Island, it’s not like if you lost your job in a larger country you can possibly move to another area of that same country and live at a cheaper cost, able to sustain yourself and family. Bermuda just doesn’t afford the opportunity to do for self in the sense that you can actually survive. And yes, entrepreneurship is an option but come on how many people can venture down that road. And I guess you would say, maybe they should have saved for a rainy day… I don’t have a solution to the problem but I don’t think cutting jobs/people/families is an option Bermuda can sustain on.

      • BT Checker says:

        That is an issue yes but its secondary to the debt which is not sustainable and should have been addressed three years ago. In all likelihood it is too late but we should still try. I agree that we need to look at what is next but it is exactly that…. “next”.Obviously no-one wants anyone to lose their job but Bermuda’s survival is more important.

        I should say that again, we cant afford to keep them. Bottom line we are in depression. If we were the US we would be in the equivalent of the Great Depression of the 1930′s. Seriously.

        Also just to be clear you can move to the UK and get housing/work and live off the state there so not quite as isolated as you set out. In fact my brother did exactly this and now works in a Bar in London.

        There is no doubt we are looking to the private sector to grow and hire these people eventually – be it via America’s cup or otherwise. The government loses money on every employee. We need to stop the drain and hope we are not too late.

        • Mockingjay says:

          Well why don’t you go to England?

          • BTChecker says:

            huh? why would I do that? I was just explaining it was not so cut and dry. England is not for me anyway – I would go to Scotland (oh yes two different countries both part of the UK). flippant remarks don’t help got anything else?

      • Truth says:

        Exactly why the furlough day was the best option. But at least financial assistance will cost less than the inflated wages of the civil servants.

    • biggadon says:

      And where do you think those 500 people are gonna go for funding after losing those jobs…. to the now capped Financial Asst program !

      • BT Checker says:

        Which will still save the government 30 million over paying their high salaries. This is nonsense. Also some will still find jobs.

        • Mockingjay says:

          Hey Dreamer people have jobs they spend money and people have jobs where they spend money.
          People don’t have jobs they don’t spend money and the people don’t have jobs where the money could’ve been spent.

  3. aceboy says:

    Of course you don’t see this as a good budget. Your members are dragging this country into the pit of despair and it is becoming clearer and clearer to the rest of Bermuda that this needs to change.

  4. Claude says:

    500 public sector jobs should be easy to cut – simply enforce the performance and attendance terms of their contracts. (Maybe I should post a picture sent to me of a W&E employee asleep under a desk).

    Hayward has now elected himself, don’t kid yourself that the BPSU membership were given much of an opportunity to oppose or discuss that, so he now has a fat salary. He’s using his soapbox to undermine the OBA at every turn, which exactly what a lot of high-level civil servants are also doing.

    • Regina says:

      Random drug testing will weed them out too.

    • this special island says:

      “he now has a fat salary..” Says who? unlike your current government he was very transparent and upfront to the members when questioned about his salary. Which is significantly less than salaries we need to “march” about. So quick to cut 500 jobs…and then what? when salaries could be paid for by the BTA’s head person alone…. do we forget he makes 7 grand a week!! FOH

      • Claude says:

        The difference is that one makes money for Bermuda, the other doesn’t.

        • Mockingjay says:

          If someone paid me $1,000 a day I’ll make a difference too, S!@# I’ll even stand on my head and blow bubbles.

          • BTChecker says:

            Im afraid you don’t have the skills. I wish you did and maybe we could get out of this mess. You only skill is flippancy and that is what got us into this mess. Your attitude is the problem. unless you are just trolling for a reaction like a 12 year old. if so well done

  5. North Rock says:

    And this is what you get when you overpay for staff !! The membership of the BPSU are now seeing what the private sector knows…you cannot avoid idiocy.

    Two things to do: PAY NO OVERTIME, NO MATTER WHAT and get rid of whatever # of positions you want to pick…500-1000 comes to mind.

    JUST DO IT !!!

  6. jt says:

    It’s stunning that he makes these observations and yet does not advise his membership that furloughs, in some form, are in their best interests.

  7. Huh says:

    In the private sector it’s understood that “half a loaf” is better than “NO loaf at all” OR, if my employer gets a break on his payroll tax it increases the odds on keeping me employed. It seems that in the Public sector, the main theme is “we is all keeping our nice healthy-sized loaf” and don’t care about private sector where many have half or even NO loaf at all…

  8. swing voter says:

    I’m scared…..really ;-(

    • BT Checker says:

      This is extremely serious and so many just try and make it a PLP vs OBA or black vs white thing.

      We have no money – we borrow money off foreign bank and people who don’t care about Bermuda and her history. If we don’t pay it back we default. If we default most in the government sector could lose their jobs.

      we really really need this addressed.

      • Mockingjay says:

        Well obviously Mr. Hanbury didn’t get the “We have no money” message.

        • BTChecker says:

          sigh…… your right – ok disband the BTA. stop americas cup. lets instead hire 4 more immigration officers. Maybe 6 more administrators? would that make you happy mocking jay? thats about the same salary I’m sure its equal value to Bermuda.

          Thank god you are not in charge, everyone just has it better than you eh? Life is just so unfair for you right? …..dear oh dear

  9. Ace girl says:

    Jason Hayward questioning the works of the Ministry of Finance and Bob Richards, now there is joke.
    This is the man who appointed himself to a position and then announced it to the membership and had the meeting not been late on a Friday the result would have been somewhat different. What does he know of shared sacrifice and furlough days? As a matter of interest how many furlough days has the BPSU experienced in the last few years. What gives him the right to constantly criticism the OBA, he should remain apolitical and please don’t tell me it’s for the membership? There is only one member in his membership. Hopefully the hot air will deflate soon. Time for dues to go to the SPCA.

  10. Loquatz says:

    Jason Hayward was just made a full time employee of the BPSU – and members should be afraid. Here he is taking a political stance that is separate from the interests of his members. It sounds like he sees himself more as an Opposition leader than as a union negotiator. Trouble ahead.

    • Tony says:

      Another Chris Furbert, basically. Very dangerous. I always had a good opinion of the BPSU, and saw them as very reasonable, particularly when compared with the bullying tactics of the BIU. That’s all changed now.

      Sill, Union leaders get nice wage packets, so that’s ok.

  11. Triangle Drifter says:

    For many years social assistance & a Government job have been considered about the same thing. Look at how many civil servants there are for such a tiny population. One in five on the Government payroll. All of them getting rediculous benefits totally unheard of in the private sector.

    The party is over. The Government is broke. What will it be, 500 paid positions made redundant now or 2000 later? BPSU, your call. You can stomp around Hamilton all you want. You can rudely shout down a Minister at a meeting because you don’t like what you are being told. The bottom line is the same. Some of you are going to be history. Welcome to the world that the private sector has lived in for a long time.

    Remember Smiths? Remember Triminghams? Remember the hotel propertys that have closed in the past 20 years?

    • Family Man says:

      I’ll believe it when I see it. So far the OBA’s answer is to just tax everybody else and borrow some more to cover salaries and benefits for bus drivers who don’t bother to show up for work.

      Does anybody remember the SAGE report recommendations? Just another report collecting dust in a dark corner of the civil service empire.

  12. Unbelievable says:

    Yeah Bermuda has lived high on the hog for too long. The party is over.

  13. The Truth and Nothing but the Truth says:

    The BPSU is now a “JOKE” !!

  14. Jim Bean says:

    Hayward is a joke

  15. swing voter says:

    The joke is on all of us middle class working stiffs…..we voted in 1998 and got what we wanted….we voted in 2012 and don’t like what where getting. You’ll always be hung over after boozing the night before!