The 2017/18 Budget moves Bermuda closer to our goal of having a balanced budget, Finance Minister Bob Richards said today, adding that “projections for 2018/19 indicate that the Current Account surplus will cover interest charges and capital expenditures, meaning that for the first time in 15 years, Government will not be adding new net debt, and will start reducing it.”
“But for the first time in Bermuda’s history this coming year, our debt service will be the highest line item of expenditure,” the Minister said. “Servicing the national debt will be more expensive this year than the budget for any single Ministry.”
16-minute video of the full post-budget press conference:
Premier Michael Dunkley’s Remarks
Premier Dunkley said, “I want to take this opportunity to commend the Deputy Premier and Minister of Finance, the Hon. Bob Richards for once again delivering a very responsible and prudent National Budget.
“It was a relatively comprehensive Budget which outlined a broad, global perspective in terms of the risks and threats that Bermuda faces.
“And as you’ve already heard, this year’s Budget demonstrates our continuing commitment of putting the right policies in place to address our current financial times, both locally and internationally.
“We are all very aware that Bermuda has in recent years been battling against a history of fiscal indiscipline that has the ability to define our financial future for generations to come.
“Because of this, one of our chief aims since becoming Government was to implement a robust strategy that would help us wrestle back control of our public finances.
“Every Government policy and National Budget since that day has sought to manage our finances while at the same time maintaining our ability to provide vital services and programmes to the people of Bermuda.
“I understand that being fiscally prudent hasn’t always been easy.
“However over the past four years Minister Richards has confidently and ably provided us with a successful strategy which has sought to rationalize expenditure and still provide services to our people.
“I believe these years of prudence are showing results, and this year’s Budget is evidence.
“This is a Budget for our current times. It is a Budget that ensures that the people of Bermuda are in safe hands.
“And I am encouraged about the programmes and initiatives contained in this year’s Budget that will benefit our people at all levels.
“Budget 2017/18 is a very wide-ranging and extensive one, and Ministers will be at the ready throughout next week to discuss and expand on their own respective Budget allocations.
“However, today is Minister Richards’ day, and at this time, I am pleased to turn it over to the Deputy Premier and Minister of Finance so that he can discuss the Government’s 2017/18 National Budget.”
Finance Minister Bob Richards’ Remarks
Minister Richards said, “The National Budget for 2017/18 moves Bermuda closer to our goal of having a balanced budget, whereby no money will be required to be borrowed to finance the needs of Government.
“Projections for 2018/19 indicate that the Current Account surplus will cover interest charges and capital expenditures, meaning that for the first time in 15 years, Government will not be adding new net debt, and will start reducing it.
“But for the first time in Bermuda’s history this coming year, our debt service will be the highest line item of expenditure. Servicing the national debt will be more expensive this year than the budget for any single Ministry.
“All told, for fiscal 2017/18 there will be a projected deficit of $135 million – that’s $135 million more in expenditure, than anticipated revenue, requiring $135 million in new borrowing.
“But this deficit is $64.4 million less than the 2016/17 deficit, which was nearly $200 million. We have been making annual progress in whittling the deficit down.
“This Budget puts our net public debt at $2.398 billion, with a projected debt service cost of $186 million, claiming nearly 18 cents of every dollar the government collects in revenue.
“This Government Budget is one part of a multi-year plan to completely eliminate the annual deficit – the most important part of our financial plan to ensure the long-term prosperity for the Bermudian people.
“To take that step, the Government is moving to both broaden the tax base, and, establish tax cuts to ease cost-of-living pressures on lower income earners.
“Payroll tax reform will introduce the principle of fairness into our system of taxation – a system that has always been unfair to lower income employees. These progressive reforms will require more from those who earn more, and less from those who earn less.
“I want to outline some of the highlights from the 2017/2018 Budget.
“A new Financial Services Taxes on banks, local insurance companies and Money Service Businesses are expected to generate about $11.4 million per year.
“Annual Government fees for ‘investment/holding/trading’ Permit Companies will rise from $1,995 to $25,000.
“We expect the sale of surplus Government property to raise an estimated $3 million this year.
“There will be:
- “Tax relief for those earning $96,000 or less.
- “More required from those earning more.
- “Increased funding for Education
- “Money for needed road works.
- “A hold on any changes to land tax rates.
- “An end to tax concessions for hotels, retailers and restaurants.
- “And, additional customs duties, including those on fuel and the “sin” taxes.”