Shadow Finance Minister On S&P Downgrade

April 29, 2015

“This downgrade represents a further sign that 30 months of austerity, 30 months of failing to diversify, and 30 months without a credible growth plan lead to what we have seen under the OBA,” Shadow Finance Minister David Burt said following yesterday’s news that Standard & Poor’s downgraded Bermuda.

“We cannot build an economy for the future with ideas from the last century; Bermuda needs new and innovative ideas to create jobs and build a secure economic future for Bermudians,” Mr Burt said.

In a statement about the ratings downgrade and stable outlook, S&P said, “We are lowering our long-term issuer credit and senior unsecured debt ratings on Bermuda to ‘A+’ from ‘AA-’. We are also lowering our short-term rating on Bermuda to ‘A-1′ from ‘A-1+’.

“The downgrade reflects our assessment of continuing weak economic performance and weak public finances, which we expect will persist through our two-year outlook horizon. Bermuda’s six-year recession has resulted in declining revenues, which has led in turn to fiscal deficits of 5% of GDP in fiscal years 2013 and 2014.

“The debt-financing of deficits will increase gross interest costs to more than 11% of government revenues for fiscal years 2015-2017. The stable outlook reflects our expectations that positive economic growth will return in the next two years, fiscal deficits will get smaller as revenue growth returns, and government debt will stabilize at slightly more than 40% of projected GDP.”

Shadow Finance Minister David Burt’s full statement follows below:

Bermuda’s latest downgrade by Standard & Poor’s should come as no surprise to Minister Bob Richards. Over the last 30 months he has been warned by the PLP and by ratings agencies that failure to diversify our economy would impact future ratings.

This downgrade represents a further sign that 30 months of austerity, 30 months of failing to diversify, and 30 months without a credible growth plan lead to what we have seen under the One Bermuda Alliance:

  • A record number of Bermudians out of work
  • Continued rising costs for Bermudian families and seniors
  • The lowest tourist air arrivals in 48 years
  • An increasing exodus of Bermudians leaving Bermuda in order to survive

This cycle cannot continue, we must put an end to this 6 year recession and modernise our economy so that it can provide the jobs required to sustain Bermudians.

The PLP has a 10 year plan, Vision 2025, to put Bermudians back to work, expand opportunity, diversify our economy and reduce our debt. We propose:

  • Formation of an Economic Diversification Unit to identify new economic opportunities for Bermuda to create jobs
  • Creation of a Bermuda Fund to invest in companies that bring new jobs to Bermuda
  • Removing the incentives that make employing foreign labour less expensive than employing Bermudians
  • Triple the funds spent on training and re-training to upgrade the skills of Bermudians so they can fill jobs filled by guest workers
  • Investing in our tourism marketing and on island development to increase air arrivals and create jobs in tourism
  • Reforming our tax structure, making it more fair by increasing the take home pay of low wage earners
  • Investments in Green Energy to create green jobs while reducing our energy costs
  • Reducing the red tape and increasing the red carpet for Bermudian entrepreneurs so they can create jobs
  • Increase competition for local banks and insurance companies to reduce costs for Bermudian families
  • Developing our Blue Economy to capitalize on the resources in our exclusive economic zone and create jobs in Bermuda
  • Establishing an online gaming industry to bring hundreds of high tech jobs and additional revenue to Bermuda
  • Regulating and taxing cannabis to reduce law enforcement costs, generate additional revenue and stimulate tourism demand
  • Implementing Pay-Go rules to ensure any unbudgeted spending is offset by savings or additional revenue

30 months of austerity, lack of transparency, inaction on diversification and lack of planning have moved the Bermuda economy in the wrong direction.

We cannot build an economy for the future with ideas from the last century; Bermuda needs new and innovative ideas to create jobs and build a secure economic future for Bermudians.

Read More About

Category: All, News, Politics

Comments (51)

Trackback URL | Comments RSS Feed

  1. LiarLiar says:

    Moan on a daily basis that the OBA has turned around things in 30 months or so.

    But then turn around and say we will fix everything in about 10 years or so. As if we can sustain our public financial position for another decade.

    Priceless politricks.

    And yes I have read the PLP’s 2015 budget reply which contains all their ‘ideas’ above. And yes they are simply ideas as the document contains absolutely no plan on how to achieve these ‘ideas.’

    For example they say they are going to create a Bermuda Fund and triple expenditure on workforce development. Nowhere have they stated where they will procure this funding from or what other areas will have to be reduced to achieve these ‘ideas.’

    What concessions are you going to give to establish a Blue Economy and online gaming in Bermuda? You have to provide some incentives for a company to set up shop in one of the most expensive jurisdictions in the world.

    But wait a minute, the PLP has been ranting against the concessions and incentives being issued by the OBA as a means to drum up business. Does the PLP think they can simply attract all these new industries with our pink sand and swizzle?

    Nope. They will need to offer incentives they have railed against for 30 months.

    It simply appears that the PLP have no qualms in increasing our deficit to the point of another downgrade. If you read the S&P report you will note that their issue is our public finances.

    It is also interesting to note that the PLP disregarded the positive statements by S&P regarding the improvement of Government finances and expected GDP growth within the next two years or the benefits that will be procured from hosting the AC35.

    • MOVING OUR ECOMONY FORWARD says:

      “Our workforce and our entire economy are strongest when we embrace diversity to its fullest, and that means opening doors of opportunity to everyone and recognizing that the American Dream excludes no one.”

      -Thomas Perez

      Well said Mr. Burt, thanks for attempting to bring forward ideas to move our economy forward. During this critical time it is important to seek out ideas that will help address our dire economic situation, rather than only point fingers. This is our 3rd downgrade under the OBA government, and we must do whatever we can to ensure that a fourth downgrade does not take place. This means that it will take all of us, and we must come together to get it done.

      It is important that folks do not get in the regular pattern of blaming one party and pointing fingers in one direction or another. This will not in anyway improve Bermuda’s current economic situation. This unproductive approach will only sink Bermuda further into a financial crisis. We must work together to come up with creative ideas that will move Bermuda in a better position. If Bermuda fails we all fail.

      Mr. Burt I am glad you did not take the road to just pointing fingers. Folks must attempt to come up with ideas to change things around. I hope the dialogue would move in that direction, rather than just political finger punching. So far we have learnt one thing if nothing else, pointing fingers is not the solution, and it has not solved Bermuda’s biggest problem, which is our economic situation. I hope many are listening carefully.

      Burt your critical analyzes is helpful, but most important is your effective approach that also provided some possible solutions that should be examine carefully to determine if they are successful. We as a society must work towards a think tank in collaborative approach that will examine your ideas and others to make a change in the direction we are headed in. Playing the “Blame Game” will not help Bermuda move forward.

      My wish is that the government would take a Collaborative approach to address this problem. A collective think tank including all members from both political parties and persons from the community. A collective effort is the way forward. Playing the political game of who did this or that, will not do it, and it has lost its usefulness.

      Once again MP Burt, well done I must give credit where it is due, and I hope people would consider the ideas you presented, as well as bring forward a few of their own in this discourse.

      We must seek out ideas that will work for the benefit of all Bermuda.

  2. Shadow Finance Minister David Burt seems delusional. We were not just dropped into this predicament. No,this goes way back, back to the P.L.P.Government days and has,(over a period of time)inflated. The One Bermuda Alliance have now got “the bull by its horns” and are turning things around…

  3. Transparency says:

    All of this because of the plp’s mismanagement.

  4. aceboy says:

    Burt….just hush your noise. Your lot put us in this mess and the OBA are trying to get us out of it.

    Your wish list is just more spending. That is all you guy know.

  5. Chris says:

    sorry Mr. Burt. PLP screwed this up! S&P look at historical records as well as current. We are in the current situation because of history!

  6. watching says:

    It is so sad that everytime the PLP submit suggestions or press statements the usual suspects appear on the blogs dismissing everything and blaming the PLP for everything wrong with the world.
    The OBA have had stewardship of the country for 2 and a half years and while no one expects them to have solved every issue in Bermuda, they should have made some headway based on their pre election rhetoric in 2012.

    • stunned... says:

      the only question Mr. Burt should ask is: “How can I and others help?”

    • Kangoocar says:

      Watching, let me help you, there is a few reasons why the plp get hammered on every press statement they make about our dire situation!!! Firstly, they to this day have never accepted responsibility and furthermore at least apologized for their incompetence?? Secondly, everytime they reel off their ideas, never ONCE have they said HOW they would pay for it?? That my friend is the crucial part, how is their ideas going to be PAID for??? Heck, I can easily say I am going to $100 million next year, but if I don’t have a real plan and state how I am going to do it?? Well it is just nonsense!!! Just like what Burt/plp is saying, pure nonsense my friend!!!!
      I will sum it it for you, the plp created are recession, they have never taken responsibility for it, and now all they do is spout off nonsense with nothing of SUBSTANCE to state HOW they would rectify their incompetence??? until they do, they will continuesly be hammered for it!!!

    • Zevon says:

      The PLP say they can improve things by 2025. In ten years. So why are they complaining their mess can’t be sorted out in two years?

  7. Archie says:

    I would not trust Burt with my family household finances let alone Bermuda’s.

    • Kangoocar says:

      Archie, I would not trust Burt with my rum swizzle either, it might get sold online ???????

    • Triangle Drifter says:

      I would not trust Burt to go to the store to get me milk & bread never mind have control of our finances.

  8. arthur conan doyle says:

    This is the same Burt who wants his hands on OUR private pensions: ….” the PLP’s plan to create the Bermuda Fund to use a small portion of our public and private sector pension funds to invest in companies”.

    You can keep YOuR hands off MY pension.

    • Um Um Like says:

      How about we use the pensions of the PLP ministers ONLY!

      Maybe we could even sell a few cedar beams to aid the cause.

    • Zevon says:

      “Investing in local companies” using public funds.
      That’s a Friends & Family Plan, right there.

      • rhonda says:

        I wonder what funds are funding AC

        • Zevon says:

          They have said what those funds are for. No money is being used to capitalise a private company. If you can’t see the difference, that’s part of the problem.

      • Derek says:

        Invest in local business. yeah right! Dry wall techs and nail painters. And we are to pay for it with who’s monies. Our pensions. B

    • Yahoo says:

      Where is that quote from?

  9. Dylan says:

    what is is amusing is he and walton brown like to hear themselves talk, i take time to actually read their verbal diarrhea and it is quite entertaining sort of like a reversal of not the um um . This where politicians take the micky out of themselves. I wouldn’t give burt my lunch money to work with. We will be in a much better place then we would have been under the green machine.

  10. Terry says:

    The PLP Propaganda machine is in full swing.

    Any positive affect/s will be attacked by them.

    Even the trolls

    If they are so sure they can cause a revolution I suggest they start spinning wheels on wet days because the accident will occur and hopefully no others are injured.

    Reflect.

    Shalom.

  11. UmUm says:

    Mr Burt’s ideas totally overlook the fact that unless there is population growth, there is no economic growth.
    While some of his ideas are good, who will these business be serving?
    His list also neglects to say how the debt will be paid off and makes no mention of how the Island can tackle the effects of an ageing population which is going to put enormous strain on our finances – especially if there is no population growth.
    He also does – sensibly – give a timetable. Why sensibly – because it will take more than 2 and a half years to put in place.

  12. Ants says:

    Must be ant season.

    Ignorant. Burt clearly is ignorant of how the economy works and how rating agencies determine their ratings. We can’t take on any more debt. But I guess it’s hard to break old addictions.

    Arrogant. Burt’s arrogance will be his undoing. He thinks he knows best when clearly he does not.

    Petulant. Burt and his PLP comrades have one singular goal in mind – take back the reins of government no matter the cost.

    Burt’s suggestions are nothing more than pie in the sky wishful thinking that will do nothing to fix or diversify our economy. Indeed, some of his suggestions would likely cause more harm than good. Back to the drawing board.

  13. jt says:

    Plan is there…can’t just snap your fingers.
    Diversification needs attention but we need money to begin.
    Austerity has been hugely improved but still falls well short…and why is that?

  14. Stephen Thomson says:

    I remember clearly the warnings that were given to Paula Cox and David Burch that “term limits” would potentially critically injure Bermuda by literally chasing away those individuals that pay rents, buy services and spend money in Bermuda. However, the PLP blindly pressed on and we all are living with the consequences. I am so infuriated by the xenophobic anti foreigner policies of the PLP that have destroyed our standard of living. How dare you now stand up now and criticize those that are trying to fix your mess.
    At least stand up and apologize to us first. Respect goes two ways. Apologize. As Bermudians, we are waiting and your silence is deafening.

    • Come Correct says:

      Preach!

    • Redman says:

      @ Stephen Thomson,

      Right on.

      Pity yours and other comments will fall on deaf ears with the PLP and their Sheeple. They didn’t heed the warnings back then and they know today that all they have to do is sling mud… some will stick.

      In other words if you can’t dazzle them with brains then baffle them with BS!!!!!

      They don’t have to show how their ‘Great Ideas’ will work they just make a show of creating something. That’s why they are claiming to fix things … by 2025. Of course the OBA are expected to improve things in six months LOL.

      Bermuda will be finished if these clueless jokers ever get back in power anytime soon.

      • Tony G says:

        Exactly. The government can increase confidence in the economy overnight by granting status to those guest workers who have given say 10 years of their lives to Bermuda.

        The population has to be increased, no two ways about it. Problem is, obviously, the PLP will scream racism and anti-Bermuda policies, when the reality is the polar opposite.

        If the OBA can overcome that obstacle, only good things can happen for all Bermudians.

    • Sickofantz says:

      Remember those same people who paid rents and spent money and were chased away also paid healthcare premiums but didn’t use as much actual healthcare thus subsidising the old and inform who will now see premium costs leap in consequence.

  15. King Jammys says:

    PLP died the same day the UBP did……they just don’t realize it yet.

  16. Terry says:

    BELCO to reduce rates by 14 %
    Interest rates at banks with be reduced by 7 %
    ALL bona fide Unions will see 27.5 % in dues
    All Public transport will be free

    PLP registered Members will get a 37 % discount on all items purchased and no cover charge/ tips included

    No Departure Tax/No tax on good brought in

    Lobster season will end

    Free Cable/Sat et al

    All local grocers will take donations for purchase.

    Viva La Ravahloosheon.

    Shalom>

    Now moan about that yoo luuttt

  17. stunned... says:

    Mr. Burt’s last suggestion” Implementing Pay-Go rules to ensure any unbudgeted spending is offset by savings or additional revenue” is so rich enough to give one heartburn:

    Extract from article 2010 – Former Premier Paula Cox (PLP) giving a post budget speech:

    “Asked by John Lang, of Jardine Matheson Group, when the current account budget would balance, Ms Cox said: “The current account could easily be balanced tomorrow if we decided to do nothing and just stand fixed without any progression.
    “I think it’s easy to make it balance, but I’m not sure that is responsible. I don’t consider it a success of being a Finance Minister to have a balanced budget…”

    that speaks volumes as to why we are where we are.

  18. Redman says:

    “This downgrade represents a further sign that 30 months of austerity, 30 months of failing to diversify, and…

    Yawns, turns the page.

  19. Bermuda123 says:

    And exactly why should Belco and the Banks reduce their rates? Their shareholders have invested risk capital and deserve a risk-adjusted return (and if you don’t think their capital is at risk go back and read the S&P statement.

    The most significant thing in this is the S&P view of “stable” – ie we are now starting to climb back. I wonder why that is…..?

  20. scorpio says:

    Does the PLP believe they displayed ANY ability to grow an economy between 1998-2012? I’m no fan of the OBA, but holy crap the BS is nauseating. This is a laundrylist of ideas with zero substance.

  21. Just a matter of time says:

    @ watching: “It is so sad that everytime the PLP submit suggestions or press statements the usual suspects appear on the blogs dismissing everything and blaming the PLP for everything wrong with the world.
    The OBA have had stewardship of the country for 2 and a half years and while no one expects them to have solved every issue in Bermuda, they should have made some headway based on their pre election rhetoric in 2012.”

    Not only is it sad. But with this constant type of thought process, only the OBA and its supporters have got all the economic answers now? We have talented Bermudians across the political divide who can contribute to the think tank of diversifying our existing product to benefit all during these precarious times. Not listening based purely on which party is talking is disastrous. Newer ideas from a younger generation should not be ignored no matter the party. Let’s give the rhetoric of the PLP ruining the country a break because most of it is exaggerated. And it’s also getting old. The sad truth is that we had the same old antiquated products that had no hedge which simply did not hold up to the global financial meltdown. So borrowings took place to fill the budget gap….just like today including the debt service charge. You can blame it all on the PLP if you want to but that’s it in a nutshell. And now we are STILL using the same old revenue formulas that did not hold up to the last crisis. Revenue formulas which are mostly consumption based. Payroll tax and Customs. Then we get the trickle down from IB and then tourists. That’s it. Heaven forbid if there’s another meltdown. What’s left will be obliterated. Our old formulas will not sustain. All the more reason to listen to new ideas and no new idea should be greeted as a bad one. Some bad ideas spin into good ones. But don’t stop the creativity due to politics! We can’t afford it right now. We need all hands on deck. Spinning the same old formula and hoping that it turns out differently is not the answer. Isn’t that the definition of insanity?

    The OBA have blundered time and again since they first got elected and broken promise after promise. Contrary to what some wish to believe, the Bda economy, IB, foreigners and Bdians saw some of its best years under the PLP. So the expression of ’14 years of terror’ is pure nonsense and race baiting. Nothing but a dog whistle. And may I also remind folks that with the small margin wins by the OBA in Dec 2012, that was a result of MANY PLP supporters who decided to stay home to not vote in 2012 rather than vote FOR the OBA as an alternative. THAT’S how they won. People will not forget all these OBA secrecies and secret dealings. And they won’t forget how this OBA Govt promotes the foreigners over the Bdians time and again despite their lip service.

    I too got frustrated at the PLP and I nearly stayed at home, but I still voted for them as I knew out of the two parties, they will always be the ones to represent the BERMUDIAN interest on a consistent basis. They will not sell out their own 21 sq mile country and their people, especially our young people in a heartbeat to the highest bidder. Now we are losing our young people. Our brains. Our future. Can you blame them if they are not being looked out for? No hope to own their own home if it’s not by inheritance. Costs are sky high. Rents are creeping back up to obscene levels. The PLP were not afraid to look at different ideas and not afraid to confront issues representing all. I’ll always remember the back lash to the out of the box thinking then Premier Brown presented to introduce fast ferries. A first for Bermuda. You would have thought it was Armageddon from the then UBP’s (now OBA) negative reaction to it. Now this current Govt is planning on getting some more ferries for the AC. Also the PLP idea to build a bigger wharf as forward thinking to accommodate the huge cruise ships. Again Armageddon from the UBP. Ok granted some major overruns and they are never good. But it’s not like the UBP didn’t have capital overruns during their time. But now look. The mega cruise ships are our main tourist bread and butter product that we mostly rely on and building a whole new industry over. Amazing. We have barely any bed space and again that demise was directly linked to the global one. We need to think of something and to do it fast. Across the board cuts in Govt to reduce expenditures in one hatchet job with no forward plan is not the answer. Cuts have happened. Some savings were made. But more needs to be done on the revenue side.

    Blaming all the financial woes 100% on the PLP is not only divisive but sets up a false standard and ends up being counter productive while we shoot ourselves in the foot by turning a deaf ear. Yes there were some mistakes. But they still came with the ideas. The OBA are poor in communicating out of the box ideas to its people as well as ACCEPTING new ideas. Where is our Revenue equivalent to SAGE? The Unions gave ideas, the Civil Service and the PLP. Still nothing. Paying for the AC of whatever is left of the Govt budget may be nice (and expensive) but most Bermudians are not into sailing of this calibre and we still don’t know how much funds will be spent to host it here. No budget projection timetable has been given to the people, nada. Don’t tell me there isn’t a budget. Don’t we deserve to know how this will be funded? Now mind you I did not attend that AC town hall at the Heritage Worship center so I am not sure what was stated. The AC is still an aloof concept for most because of the sport’s old guard elitism which simply does not relate to the masses. However, I am praying this does pay off for all our sakes. So do the rating agencies. I think too much is riding on this which is so short term and short lived. Even Sir John Swan said we should not be relying on this. We need more. Can’t we walk and chew at the same time with other ideas simultaneously? Why does it have to stop at the AC? The OBA’s AC is its main trump card before election season and the timing is perfect as one has to be called before Dec 2017. AC is in June 2017. Much is riding on this huge political strategy of theirs. It’s sad that so much more is being ignored creating huge opportunity costs.

    • Kangoocar says:

      @just a matter of time, after reading your long drivel of absolute nonsense and then spending the next 5 minutes belly aching laughing while laying on my back!!, I have now gotten up to ask which plp PR writer are you??? You plpers I have to give it to you?? Everytime I think you can’t sink any lower, you prove me wrong??? Will you guys just get the heck out of the way and let the real pros deal with your mess??? Bermudas future relies on it!!! If you can’t do it for yourselves, do it for your children and their children!!!! My god, you guys have no limits to depths you will sink to, just to regain power??? Spend your time apologizing to all your supporters that now find themselves standing in line at the Financial service department!!! Now that would be making yourselves useful!!!!!

    • Redman says:

      @ Just a matter of time,

      ‘Let’s give the rhetoric of the PLP ruining the country a break… ‘

      You say that and then you go on with pure PLP rhetoric… which is getting old already and it’s only been 2 1/2 years, Pathetic.

      Thanks though, I’m glad you did that early on as I could see the BS that was coming. Luckily I didn’t waste anymore of my time reading the rest of it.

    • Unearthed says:

      That was the best post I’ve seen in months. It’s great when people contribute substance to these forums!!!!

      Well Done!!!!!

    • North Rock says:

      The big assumption you make is that the OBA havent achieved anything. Sure…its very easy to pick on little things but you are wasting everybodys time by showing that you either dont understand or refuse to see the unbelievable foundation that the OBA – no one else – has laid for recovery.

      No one ever said that the PLP didnt have good ideas…implementation is another thing. I am solid OBA but even I know that they dont have a monoploy on the solutions…thats why they get help, guidance and support from the business community, the general population and from the UK.

      Politically we have two choices….enough said.

  22. M. T. Pockets says:

    So Shadow Finance Minister Burt suggests his 10 year plan that will get everything back to “normal”. Yet he bemoans that the OBA haven’t done the same in only 30 months. So is he saying that 30 months of governing by the OBA is equal to 10 years of governing by the PLP? The OBA should take that as a compliment!

  23. Coffee says:

    What we need is a new finance minister . What we need is a new Immigration minister . What we need is a new premier . What we need is a new tourism minister .

    What we have is Bob Richards with his head neck and shoulders firmly lodged underneath some rusty old hood looking for God knows what .

    What we have is Micheal Fayhe removing term limits without thinking of the immediate adverse effects , the yield of positives hasn’t bore any fruit .

    What we have is a premier who hasn’t yet reconciled with the whole electorate as to why the disgraced former premier was made to resign.

    What we have is a tourism minister who took SAGES advice to sidestep the duties he was charged to fulfill .

  24. aceboy says:

    Bullet points aren’t a plan. There is no plan. It is a list of plans for plans, very few of which have any merit whatsoever.

  25. Coffee says:

    Should I remind you that Bermuda has been downgraded more rapidly under this administration then any other in the past . MP Burt tell the people again why we are failing under the UBP/OBA .

  26. Navin Johnson says:

    Mr Burt should go back and read the rating agency comments during the PLP reign of fiscal terror….incomplete and missing data,failure to submit audited reports,etc.etc. etc. rating agencies love to be mislead Mr Burt and the PLP Government was 14 years of being deceived and mislead…..the depression is a direct result of your Government and everyone knows it be your most ardent supporters

  27. Sara says:

    Its amazing he can say all of this with a straight face…

  28. campervan says:

    The fear that the PLP will return to power keeps my family out of the Bermuda real estate market.
    Thanks for the timely reminder to stay liquid Mr. Burt.

  29. tom cooke says:

    They want 10 yrs and the OBA have only been at 2 1/2 yrs.
    . Give me a break.

  30. bluebird says:

    Mr Burt is a demogouge,he who makes the most noise will get the most votes by promising everything that they are unable to provide.Screw the people and then blame it on every else.
    And then others have to come behind them and endevour to clean up the mess.