Column: Govt’s “Half-Time” Financial Report

June 18, 2015

[Opinion column written by Larry Burchall]

This is the 130th week-in-power for this Administration. It is the halfway mark in a five year, 260 week term that must, for all practical purposes, end by December 18th 2017.

What has been achieved since kick-off on December 18th 2012?

[All the observations refer to matters that are specifically in the actual control of or are directly influenced by the Government.]

National Debt and directly related

Gross National Debt – At half-time, at $2.185bn, National Debt is higher than the $1.574bn of December 2012. It will go higher to $2.310bn in 2015/16. Projected to be even higher than $2.310bn by 2017/18.

Nanci [Interest expense + Sinking Fund contribution] – Was $112m in 2012. At half-time it is $169.9m, costing $465,480 per day. Projected to rise to $184.4m and costing $505,205 per day by FY 2017/18.

Overall spending pattern – Government spending is still outstripping Government revenue by a large amount – $299.9m in 2014/15 and $220.0m in 2015/16 – thus continuing the major overspending pattern that commenced twelve years ago in FY 2003/04.

$800m Plan of August/December 2013 – In February 2015 the Minister for Finance indicated that the plan to borrow and use $800m to bring Government finances under control by 2017/18 has failed. Fourteen months after completing the $800m borrow, the Minister indicated that the $800m had run through his fingers so fast that “…the money we borrowed at that time is running out. We have about $95 million left which is projected to run out later this year. Therefore we anticipate further government borrowing in 2015.”

Employment generally

Bermudian employment – Department of Statistics [DoS] figures show 25,132 Bermudians filling jobs in 2012; 24,504 in 2013. No figures released yet for 2014 or 2015. So 1,132 fewer Bermudians filling jobs over the 2012 – 2013 period shown by DoS records. Probably showing around 1,500 [or higher] when 2014 figures cease being with-held.

Bermudian unemployment – The admittedly imperfect Labour Force Surveys report unemployment growing from 3,305 in 2012, falling [?] to 2,569 [?] in 2013, then rising again to 3,486 in 2014. No figures yet for 2015, but DoS records show an increase in unemployment for the period 2012 – 2014.

Jobs overall – Since December 2012, job losses amongst Bermudian and non-Bermudian workers have continued. Overall, the DoS reports 35,443 filled jobs in 2012; 34,277 in 2013; and 33,487 in 2014. No figures yet for 2015, but an overall loss of 1,956 filled jobs for the period 2012 – 2014 as shown by DoS records.

National Decisions taken by Government

Women’s health – Initial Government decision was to reduce the opportunity for women to have annual mammograms covered by their insurance policies. Decision overturned after a major, largely non-political, protest that was mounted by a wide cross-section of Bermudian women.

Closing the Recycling Centre – Initial decision was to close the Centre. Decision overturned after public outcry.

Lamb Foggo Urgent Care Centre – Initial decision was to close the East End facility. Decision overturned after public outcry and protest.

Referendum on gambling – Government’s initial decision and promise was to have a national Referendum on Gambling. Government refused to hold a referendum despite protests and outcry from within the community.

Re-commence granting of Bermuda Status to some PRC’s – After uncovering a flaw in earlier legislation, the Government decision was to correct the matter by re-commencing the granting of Bermuda status to some PRC’s. Decision still stands.

Debt Ceiling – Government raised Debt Ceiling by $1.0bn, taking it from $1.5bn up to $2.5bn.

Achievements

America’s Cup – The America’s Cup race series will be staged in Bermuda between 2015 and 2017. By Government’s reckoning, this could result in up to $275m of new and additional income over the two and a half year period.

Morgan’s Point development – Government has underwritten $165m in investment guarantees to get something going at Morgan’s Point.

Gambling – Government has passed legislation to enable gambling and casinos.

BTA – Government created and established the Bermuda Tourism Authority.

Overall

Since December 2012 – Resignation of one Premier and appointment of another; a couple of minor Cabinet shuffles; civil Court cases launched against members of the Opposition.

The six year decline [2009 to 2014] in nominal GDP may be, probably is, levelling off.

At half-time, that’s the overall situation.

- Larry Burchall

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Comments (11)

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  1. Thanks for the up-date Mr. Larry Burchall. The tide appears to have ebbed…

  2. J Starling says:

    Makes for some interesting reading, and a useful compilation of some key statistics. Much appreciated, thank you.

  3. Kangoocar says:

    Just think, if we can reduce the size of the CS to a level which actually makes sense to an island our size without political repercussions??? We actually could honestly say the OBA are repairing the damage of the last 8 yrs of the plp reign of terror!!! The OBA a very much aware of this but simply can’t do it, and I actually don’t blame them but, all those that would actually consider ever voting for the plp, cannot ever be considered anything else but foolish!!! We have a huge debt problem that we probably because of politics never be paid, so to those that need government handouts and can’t get them, thank the plp for that!!! This debt if not dealt with is going to be our death sentence. Thankfully I make a lot through hard work and am spending my time spreading my money to to the safe countries and will only bring it back if the plp are defeated at the next election, I then will consider the vast majority of bermudians really are understanding the seriousness of our situation!!!!

  4. Bettty says:

    Bettty is following Nanci….Looks like it’s not getting any better…..under this OBA government

    • Onion says:

      At every step the PLP have promised to spend more than the OBA and tax less.

      So at every step the PLP have promised more debt and more Nanci.

      • Correct Onion. Following are a few valid points. That had been made by a “friend”. They have suggested this in reference to what must be done to save the public from “giving away” million and millions of dollars…unnecessarily. And yes, I definitely agree. “If someone isn’t working, they have the time…Nobody should collect a check without earning it unless ill, disabled or elderly.”

  5. Big Eyes says:

    Where are the 2000 jobs!!!!

  6. JAYBIRD says:

    As someone who voted for this government, I can’t say that I am proud of the record so far. Interesting that Mr. Burchall failed to mention the creation of the SAGE commission and the subsequent disregard for any of their recommendations…

  7. Nicky says:

    Much much needed and appreciated article. No one in leadership wants to say no! Larry it would be good to bring to the foreground the SAGE report and see what actions were recommended and where is the Government on there plan of implementation. I and others wrote in recommendations and we have never been updated on where the Government is on those recommendations. Perharps you could do a report on

  8. Sickofantz says:

    I would like to see Mr Burchall accumulate figures for the other ongoing catastrophe which will be the funding of healthcare. When those 5000 (and continuing) healthy 35-45 aged expats left (and continue to leave) the island they took with them their large insurance payments and limited use of healthcare. In other words they paid for Bermuda’s old and infirm. Who will pay for this island of sick people now?

  9. Mr. Larry Burchall sir, following is an excerpt from a statement made in reference to Solvency II dated 6/26/15.
    Shadow Finance Minister David Burt said the Progressive Labour Party fully support the legislation, noting that the move towards Solvency II equivalence began under the P.L.P. administration.
    He said that the new rules regarding head offices and outsourcing are important and could make a positive difference on the Island.
    “In order to be a Bermuda company, you have to have your Head Office and significant staff here,” he said. “It’s something that has not existed here. Some people will consider it a threat. Some people will view it as an opportunity. We view it as an opportunity.”
    I am somewhat taken-aback with that statement. How can they, (the P.L.P Opposition) take any pride in a matter whereby they’d chased out of Bermuda? Their whole approach was a- – upwards :-(
    Though I do thank them for agreeing with Deputy Premier, Minister of Finance Bob Richards suggestion / representation overseas while dealing with this extremely pertinent matter…