Fiscal Responsibility Panel Annual Assessment

December 11, 2015

The first Annual Assessment Report of the Bermuda Fiscal Responsibility Panel was tabled in the House of Assembly today, with Minister of Finance Bob Richards saying the Government “is certain that the Panel’s Report will be a useful document to assist with the Government’s deficit and debt reduction strategy.”

Minister Richards said, “I rise today to advise Honourable Members of the completion of the first Annual Assessment Report of the Bermuda Fiscal Responsibility Panel. The final report was tabled in this Honourable House today.

“Honourable Members will recall that in the 2015 Budget Statement, I announced the intention to establish a Fiscal Responsibility Panel in order “To increase transparency and international credibility, Government intends to establish an international, independent committee to review, monitor, assess and publicly report on the fiscal progress of the Government.”

“The panel’s more detailed remit is “to provide Bermuda’s Parliament, Minister of Finance and Financial Policy Council with an annual published assessment of the island’s fiscal strategy, focusing on progress in meeting our medium term objectives for public spending, taxation, borrowing and debt reduction.”

“In its initial report the panel was asked to “review progress towards the Bermuda Government achieving a balanced budget by 2018-19…[and] prospects for further progress towards meeting the aims of reducing debt and debt service to less than 80% and 10% of revenues, and for implementing the rule that net borrowing can only be considered to finance capital spending.”

“In making its assessment the panel was asked to “review the impact of the most recent Bermuda Government annual budget; the credibility of macro and fiscal assumptions underlying Government projections; and the risks that could affect progress in meeting the island’s fiscal goals…[offering]….advice where needed on ways to refine these goals, and on adjustments to fiscal strategy and tax and spending policies needed to achieve them.”

“The Panel had meetings with various institutions/individuals during the course of its discussions in Bermuda during the period November 23-27, 2015.

“During these discussions the Panel heard views about Bermuda’s economic prospects [and risks to those prospects] and challenges, in the short, medium and longer term; the Government’s plans to achieve budget balance by 2018-19 and the desirable speed of progress towards meeting its longer term debt targets; and the desirable and feasible balance between expenditure and revenue measures and preferred options for both.

“While the Panel consulted many individuals and organisations it should be noted that they are an independent panel and the judgements and recommendations made are their own.

“The Panel is chaired by David Peretz, CB, an independent consultant on international financial issues who has worked in the UK Treasury, the International Monetary Fund and the World Bank, and has experience in advising on strategic and economic issues affecting small countries.

“The other members are: Jonathan Portes, Principal Research Fellow at the UK National Institute of Economic and Social Research, whose expertise covers a wide range of economic policy issues, including fiscal policy, labour markets and immigration, poverty, and international economic and financial issues; and Peter Heller, retired Deputy Director of the Fiscal Affairs Department of the International Monetary Fund, who has written extensively on public finance issues, pensions and health care, and long-term demographic challenges.

“The Government is certain that the Panel’s Report will be a useful document to assist with the Government’s deficit and debt reduction strategy and I will encourage Honourable Members and the general public to thoroughly read the report to get a better understanding of the various fiscal challenges facing the Government.”

The Bermuda Fiscal Responsibility Panel Annual Assessment, 2015 follow below [PDF here]:

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Comments (8)

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  1. Wahoo says:

    Great, just great! Another panel/board/committee to add to the pile of paper that if read (BIG IF) would not enlighten anyone and certainly the bunk that it expands upon won’t change a thing. Are we paying for this crap?

  2. Toodle-oo says:

    This group is recommending a huge increase in taxes , so I bet this is one report , or piece of advice , that strangely will not sit around collecting dust like all the others.

    If you thought the cost of living was already outrageous , just wait !

  3. Forethebest says:

    Their conclusion is to raise taxes to get more money. I wish they had paid me a fee to come up with this solution.

  4. Anyone says money doesn’t grow on trees…has never sold marijuana!!!!!!

    • Keepin' it Real!...4Real! says:

      That would take care of our debt in 2 years…but…

  5. Larry Burchall says:

    Having read and re-read this paper, I make three preliminary observations:

    1. This paper by these three ‘wise men’ from the lands beyond North Rock, validate all that I have said and written about the current, near-term, and mid-term state of Bermuda’s national economy and the large impact that Government’s finances have had, is having, and will continue to have on Bermuda’s national economy.

    2. The ‘wise men’ make the strong statement that the key ratio to watch is Debt Service [Nanci] to Revenue – NOT Debt to GDP. I’ve been drumming and hollering that message since 2011.

    3. The ‘wise men’ are operating with bad data when it comes to demographics. With regard to ResPop and key demographics [especially for Bermudians], they are relying on the same bad data that Government is still using.

    And, pray tell, why did we have to bring in three well-rewarded ‘wise men’ from overseas?

    A lot of the rationale for what went horribly wrong with Government’s strategic finances can be traced back to the advice given – and indiscriminately followed – by another ‘wise man’ from overseas, Dr Andrew Brimmer.

    We – Government and Ministers – need to grow up and learn to rely far, far, more on local knowledge based on sound and verified data.

    Larry Burchall

    • de fence says:

      Larry, on the one hand you are right,a Prophet Has no honor in his own country. On the other hand if the message is right isn’t it good to have it repeated by impartial experts?
      I’ll be particularly interested to hear if David Burt will commit to these principles if the PLP gets back in office.

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