Ball: ‘Getting Bermuda Out Of Economic Crisis’

March 8, 2015

vic_ball[Opinion column written by OBA Senator Vic Ball]

After reviewing both the Budget and the Reply to the Budget 2015/16, I can admit there are good points in both. However, my strong view is that the budget produced by the Finance Minister, the Hon E T Bob Richards, has the better approach to dealing with the fiscal responsibility of Bermuda over the next few years.

The two parties differ fundamentally in their approach. The Progressive Labour Party wants to borrow more money to fund their plan. The OBA wants to control and reduce government spending to eliminate deficits that add to the national debt while attracting foreign investment to stimulate the economy.

The PLP would argue that their budget reply is better, because it has a vision that leads out into 2025, demonstrating their far-reaching outlook.

But imagine an Emergency Medical Technician responding to a really bad accident. The first thing the EMT is trained to do is check to see if the victim is breathing. Next, the EMT will try to stop any bleeding. Only then will he or she think about dealing with broken bones.

The PLP 2025 vision has them scheduling rehab at the fracture clinic while our country is still bleeding massively. Judging by their proposals to borrow our way out of the crisis, they don’t understand how serious are the injuries the economy suffered during their party’s time in power. As a result, the PLP doesn’t seem to recognize that more borrowing increases the deficit, thereby increasing the national debt, which equals more money being paid per year in interest payments.

The OBA Government has been burdened by a crippling debt service. We will pay $170M worth of interest payments this year and approximately $180 million next year. Imagine if this money were available to support programmes that serve people’s needs, like scholarships for our youth.

With this money we could stimulate the economy with ease. We might have the money to fund the airport and a few other projects. Instead, it must be obvious to everyone that we must pay this money because of the mismanagement of the public purse during the PLP years.

The Government’s two-track strategy of reducing spending while increasing revenue will bear fruit and is surely the best way forward. Were it not for debt payments, we would have a budget surplus this year.

Finance Minister Bob Richards gave many warnings to the previous Government. His predictions are now the very harsh reality all Bermudians have to deal with. Here are a few of them:

“Government debt is budgeted to mushroom to an unprecedented $973 million, meaning that Bermudians under the age of 35 — those people who will have to pay it off — will inherit a debt of $36,000 per person. In 1998, that debt per capita was $5,602.” – Budget Reply 2010/2011

“…Let me spell it out. If so-called intellectual capital becomes frightened enough it will leave for somewhere safer and Bermuda will lose its edge. The companies whose infrastructure is built around this capital will follow them. Jobs will be lost in the sector and in sectors that support international business or sectors that service people who work in international business, in a kind of cascading effect.” – Budget Reply 2010/2011

“Job security, even for Government workers, will diminish. The current practice of borrowing money to pay civil service salaries – a consequence of the Government spending more than it takes in – is unsustainable. Policy bungling and waste has put the long-term viability of public sector workers at risk.” – Budget Reply 2011/2012

“For most Bermudians, the Bermudian Dream includes buying or building a home: owning a piece of the rock. Today, this part of the Dream has become scary for many, for some even a nightmare. For Bermudians who acquired the house during the years this Government stoked an overheated economy, they paid an extraordinarily high price for it…

“Many people are having great difficulty servicing their mortgages, particularly those who participated in those 100% mortgages that were on offer not long ago. Those folks also face the unfortunate problem whereby the house may actually be worth less in this market than what they paid for it, or what they owe on it.

“While addressing this issue recently a government minister publicly declared that it was just “too bad”! This was a mean-spirited statement, showing total lack of empathy for homeowners and their Bermudian Dream.” – Budget Reply 2011/2012

The Finance Minister is the right man for the job. Minister Richards is very qualified, well trained, with a proven track record of fiscal responsibility. He inherited an economy in free-fall and is skillfully managing Bermuda out of its fiscal crisis.

His budget listed $930M dollars worth of investment coming to our shores over the next one to three years in the form of hotel developments and the America’s Cup races. These investments constitute a brilliant coup for Bermuda. The OBA and the Business Development team should be applauded.

With these investments we should see marked improvement in our economy and getting the government’s fiscal house in order, back to where it should be.

Bermudians trust this Government to get Bermuda out of the economic crisis and to move the country forward and we are doing just that.

-Vic Ball

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Comments (29)

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  1. Ringmaster says:

    Dream on, Bermuda is finished without massive expense cuts. The PLP enjoyed the unexpected extra revenue and spent it plus borrowed. Bermuda is in a no recovery situation. Ironic that the real sufferers will be the PLP support base. The elite are however enjoying the investment in infrastructure, just not in Bermuda for the benefit of Bermudians.

    • Mockingjay says:

      Bermuda’s newest Surrogate.
      Boy,they know how to find them.

      • Jus' Wonderin' says:

        Wonder how Zane and some others feel being surrogates? Let me kno bra…I’ll wait.

  2. mj says:

    The former government spent an unprecedented 973million 2010-2011 and here we are in 2015 and 970million dollars has been gambled for investment that may give us a coup over next three years, yet to be seen, seeing that we do not control inflation , so what exactly are you saying regarding anything tangible for Bermudian taypayers who had no say in these investments..

  3. Chris Famous says:

    Perhaps the senator can address the fact that the OBA will be borrowing funds to finance the America’s Cup?

    • Jus Wonderin' says:

      “we have no doubt that the $77M that has been pledged to the Americas Cup will generate a return on investment’. David Burt – Budget Reply 2015/16″

      whoops…guess you have no point!

    • Bermyman says:

      If every civil servant took a comparable amount of sick days to the private sector, then you could pay for the America’s Cup with just that money alone. Instead we borrow excessively so that people can use sick days obscenely, so much show our public transport system shuts down. Have you ever heard of a private company let’s say a similar size to the bus service closing for a number of days due to employees out sick? Just imagine of the hospital had the same number of doctors out sick in a similar fashion.

      We pay the piper so the ace boys can get overtime! Instead we should pay for the America’s Cup.

      Guy’s like Chris can’t stand the fact that the OBA were successful in their bid for the America’s Cup, the PLP hate it!

  4. Think... says:

    @CF ‘…we have no doubt that the $77M that has been pledged to the Americas Cup will generate a return on investment’. David Burt – Budget Reply 2015/16

  5. Chris Famous says:

    Is it borrowed funds?
    How much tax will the government receive?

    • Kangoocar says:

      @ Not so famous, I did an extensive search on all your posts going back to 2009, and never once did I see you question your plp about returns on any borrowed funds??? Care to tell us why you didn’t??? Chris, you have ZERO credibility when it comes to any comment from you concerning anything to do with OUR debt!!! You sat silent when your plp were racking up these debts, also you silent when your handbag burch even bragged about your plp not sticking to budgets???

    • Christian says:

      Have you asked? Are you saying that thousands upon thousands of visitors will be bad, in any way?

      You do not have a clue. Tell us all, when you compare Port Royal, DLBE, TCD etc etc etc massive overspends (and work for family and friends, such as the Old Magistrate’s Court Chris), do any of these do anything to bring fresh money to Bermuda like the America’s Cup?

      Let me answer. No, no they don’t. They took money from the pockets of the very Bermudians you are trying to make yourself big in front of. The America’s Cup gives each and every Bermudian the chance to make money. What it won’t do is hand it to you, but it will give you the opportunity to earn it.

      In anyone’s book, that’s a good thing, right?

      I look forward to your response.

      • Billy Boy says:

        You’re talking as if project overspending didn’t happen during the UBP time

    • justin says:

      If we are running deficits then of course the money will be borrowed, duh! However, even both parties agree that we are going to make more than we spend so what is the problem? Sounds like you’ve been drinking too much haterade, mate. For once be ‘Bermudian’ instead of a PLP propaganda machine. Your constant negativity and anti-OBA rhetoric is played out. I doubt anyone takes you seriously anymore.

  6. Coffee says:

    Vic Ball has no credibility ! He was a member of the PLP while they amassed the debt that he now decries ! He was a card carrying member of the then governing party ! He knew why the PLP had to borrow . Did he voice his concerns then ? Anybody outside of the PLP ever hear of Vic Ball before ? Did he matter ?NO, NO, NO !

    What I’ve just read from him has confirmed that he most likely while a member of the PLP had a secret love of the UBP for years !

    Watch out OBA he’ll drop you about in 36 months !

  7. Vote for Me says:

    This is yet another self serving Op-Ed.

    A good physician will deal with the current emergency AND plan for a long term recovery. The reality is the Bermuda would benefit from a combination of the Budget Statement and the Opposition Reply.

    Let’s collectively get out of rhetoric mode and move to Bermuda mode.

    As with 2 men in a boat, they will either both get to shore or perish together.

    One unanswered question for the OBA though – what did it cost Bermuda to borrow $800m in 2013 instead of borrowing what we needed when we needed it? Just the facts please!!

    • Confused says:

      You obviously don’t understand the emergency state that we are in. Without desperate measures, I give this country 18 months max before the damage cannot be undone.

  8. mumbojumbo says:

    Just don’t let plp near the checkbook……….

  9. watching says:

    this guy will put his name on anything. they are clearly trying to raise his profile for the next election. wonder which current MP Dunkley will try to eliminate to insert one of his selections.

  10. sassymama says:

    My word – what world is he living in? Look around you, no country has yet to get out of any type of economic crisis. China, Russia etc are thriving but they are still in an economic crisis. To trust any Government will be very foolish indeed. All I can say, is prepare and plan yourselves, so that you will not be caught flat footed.

    • Bermyman says:

      Did you say Russia is thriving? Lol! What planet indeed!

    • Sickofantz says:

      Umm actually most countries properly managed have got out of the crisis. Uk United States even Irlenad by asking the Civilservice there to take pay cuts which they ALL agreed to.

  11. clearasmud says:

    As said above this is a self serving piece that is void of any real solutions and simply repeats the party line. There is not even a hint of any real understanding of economic theory or any independent thought. Just because we must support the goverment of the day does not mean that all decisions that they make are automatically the best for the country!

  12. townguy says:

    Sassy momma I agree, the crisis is real and its on a global scale. The most important economy in the world is the one with your address on it. self reliance is key and for every loss someone gains. People just need to find how to be on the winning side of the crisis / wealth transfer. The government cannot help you when they are drowning themselves.

  13. Think... says:

    If you throw a bucket in a pigs pen and it squeals, you hit it!! Typical PLP rhetoric when they have been hit. Raise the level of debate. Is the PLP ‘borrow and spend philosophy’ good for Bermuda?
    Is the OBA ‘two track’ strategy better than the opposing philosophy?

  14. W. Raymond Davis says:

    It is 45 years now since I left Bda, but I like to keep in touch. The similarities in our countries are amazing. Your last government left your country with massive debt. Our previous labor govt. did exactly the same. how about $1,000,000,000 a month in interest alone. This means a very similar amount is owed by every person in both countries. Fingers crossed that the Conservatives can turn both wonderful countries around. GOOD LUCK