Column: ‘OBA Govt Made Incredible Progress’

[Opinion column written by OBA MP Leah Scott]

There has been a lot said about progress the OBA has made during its term versus the past. People hold and share many opinions about whether or not we have made positive inroads. Has progress been made during the OBA’s tenure as Government? Despite the alternative facts that make their way around, I would state, unequivocally, that the OBA Government has made incredible progress, and the accomplishments speak for themselves.

On April 24, Caroline Bay Marina, at Morgan’s Point, held a ‘dock wetting’ to celebrate the completion of phase one of Bermuda’s newest superyacht marina, which includes the structural completion of the 110 berths and mooring spaces.

On April 27, the official ground breaking ceremony took place for the new 277,300 sq. ft. airport terminal, and marked the start of a redevelopment project that will be one of the largest infrastructure projects ever undertaken in Bermuda.

On May 4, developer Hotelco Bermuda Holding Ltd, together with Marriott International, broke ground for construction of the 240,000 sq. ft. St. Regis Hotel and seven condominium buildings.

On May 27, the 25th America’s Cup races got underway –  in a place the size of Bermuda. The eyes of the world are on us and we should all be proud of this history-making event.

The economic stimulus that is currently taking place in Bermuda could and would not have occurred but for the confidence placed in the OBA Government by our local and international business partners, investors and companies.

However, on Friday, May 19, Opposition Leader David Burt tabled a motion for a vote of “No Confidence” in the OBA Government. Does that motion have any merit? In terms of fiscal management of the Government purse, has the OBA performed better than the Opposition did during its tenure?

Based on the facts below, I invite your thoughts.

In November 2010, then Premier Paula Cox appointed David Burt to the Senate and to serve as Junior Minister for Finance, Environment and Planning, Infrastructure Strategy and as her Chief of Staff. In a Bermuda Sun article at the time, Premier Cox paid tribute to Mr. Burt saying that he would work closely with her on reviving the economy and boosting business development.

In an interview following his appointment, Mr. Burt told the Bermuda Sun: “Bermuda has important decisions to make over the next few years and I am happy to play a part. I am gratified by the Premier’s confidence in me. When someone like Paula Cox asks you to step up and assist it is hard to say no. I am going to assist to the best of my ability.”

The report of the Auditor General on the Consolidated Fund of the Government of Bermuda for the 2010, 2011 and 2012 Financial Years is a telling indicator of whether former Premier Cox’s confidence was well placed.

In Premier Cox’s National Plan for Government, which was released on 10 October 2010, it was promised that “under transparent Cox leadership the PLP Government will restrain growth in spending by spreading disciplined and effective fiscal management across all Ministries and Departments to achieve savings of at least $150 million in the first year.”

As the Junior Minister for Finance, it is assumed that David Burt would have been part of the fiscal management process. Further, David Burt is a person who is a stickler for procedure, detail and accuracy. However, in her Report, the Auditor General Heather Jacobs Matthews said:

“There were numerous cases [69% or $43 million of expenditures greater than $1 million in 2011] which violated the requirement for prior Cabinet approval. In both 2010 and 2011, expenditures tested for the following departments did not have prior Cabinet approval. It is evident that the policies, procedures and rules pertaining to capital expenditures are being violated to such an extent that it has now become the norm for which there are no consequences. Compliance with the required procedures for the procurement of goods and services reduces the risk of non-performance, fraud and misappropriation. Persons with signing authority should be held accountable for breaches of compliance of the relevant Financial Instructions and rules.”

In that same 2010 PLP National Plan for Government, it was promised again “under transparent Cox leadership” that all government tenders would be published in full on its website.

Jacobs Matthews states in her Report:

“Tendering is required for any contract where the value of goods and services exceeds $50,000. Financial Instruction 8.3.1 requires Ministries and Departments to obtain quotations from suppliers of goods and services. The minimum number of quotations to be obtained and the rigour of the evaluation and awarding process depend on the size of the purchase or contract as well as the potential cost/benefit of administering the tendering process. Despite the requirements of Financial Instructions, the 2010 audit revealed that 55% [$16.8 million] of expenditures tested were not tendered.

“In 2011, an estimated $62 million of expenditures tested [76%] were not tendered in compliance with Financial Instructions, P.F.A. 2000 and P.F.A. 2002.”

Yet in his “Statement Overruling the Office of Project and Procurement Regarding the Airport Project Should Concern All Taxpayers”, Mr. Burt criticized the OBA Government, stating that “the OBA have been in office for 29 months, and during that time they continue to bypass the rules that were put in place by the PLP following the recommendations of the Auditor General to strengthen the tendering process.”

The Opposition’s 2012 General Election Manifesto stated that it was committed to fiscal fitness. But in stark contrast to that commitment, the then Auditor General, writes:

“In the past five years, Government has more than quadrupled the amount of Public debt to revenue. This is important because when this indicator significantly increases for an extended period of time [assuming relatively stable interest rates], it means that Government has consistently chosen borrowing over increases in taxes, customs duty, fees and fines to meet its financial and service commitments. This eventually has an effect on Government’s flexibility since higher debt generally impairs the ability to borrow money at reasonable interest rates and to roll over existing debt.

“Public Debt is defined as any debt owed or guaranteed by the Consolidated Fund which is due and payable. It excludes the Sinking Fund which is money set aside to repay Government loans.

“At March 31, 2012, Public Debt stood at $1.2 billion representing a 344% increase in five years.”

In his 2017/18 Budget, the Minister of Finance reported that the overall deficit is budgeted to be $135 million, a drop of $64.6 million or 32.3 per cent when compared to the 2016-17 original estimates. That is a far cry from the reported 344% increase in the public debt in 2012.

The Minister of Finance and this team have managed Bermuda’s fiscal purse with integrity, and it is undeniable that our economy is beginning to turn around. These things could not take place if there was no consumer confidence or confidence by international business and foreign investors in the Government’s ability to facilitate, manage and maintain projects of the magnitude that they have invested in and that are now moving forward.

It has been said by many that the best social welfare programme is a job, and the truth is that the OBA is creating greater employment opportunities for Bermudians.

Confidence is a combination of courage and competence. It has been a huge challenge for the OBA Government to be able to suss out the most efficient options, in terms of policy, programmes and projects that will result in the highest benefit to Bermuda and Bermudians.

However, the OBA has had the courage to make the tough decisions and the competence to carry those decisions out, because the ultimate goal is to provide people with opportunities and create a prosperous society by eliminating social exclusion, poverty and income disparity.

The OBA is confident that it can achieve this for the Bermudian people.

- Leah Scott

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