Fahy On Government Revenue: “$83 Million Short”

December 11, 2010

Bermuda Democratic Alliance finance spokesperson Michael Fahy released a statement yesterday [Dec 10] in reference to the amount of revenue collected by Government this year, saying the budget statement predicted $1.058 billion in revenue for the fiscal year, so after six months $529 million revenue should be been collected, however according to an answer given by Finance Minister Paula Cox the revenue collected was $446 million.

Mr Fahy said while they recognize that “there is still six months to go and not all revenue collection arms will have reported” it “represents a severe shortfall in revenue for the Government. Some $83 million short! It could mean that the actual revenue for twelve months could be $892 million, which is a $166 million shortfall.”

Mr Fahy’s full statement follows below:

Today in the House of Assembly, BDA MP Shawn Crockwell received answers to Parliamentary Questions. One of the questions was – Will the Honourable Minister tell this Honourable House how much revenue has been received by the Bermuda Government in the period 1 April 2010 to 30 September 2010?

The answer was $446 million.The February budget statement predicted $1.058 billion in revenue for the fiscal year. This should mean that after six months the amount collected in revenue should be $529 million. This represents a severe shortfall in revenue for the Government. Some $83 million short! It could mean that the actual revenue for twelve months could be $892 million, which is a $166 million shortfall.

At the moment the Government is 15.7% short on its prediction.This is a serious, serious problem. It is clear, per our predictions, that the payroll tax increase has not had the desired effect on increasing government revenue. The situation is so bad that Derrick Burgess reportedly said that the Government has no money to fix accident black spots and prevent road fatalities. What else does the Government not have money for?

Whilst we recognise that there is still six months to go and not all revenue collection arms will have reported, we do not believe that Government will be able to make up the severe shortfall.

We have to ask the question – who is really benefiting under this Government? It is clearly not retailers. It is clearly not IB. It is clearly not the electorate given the rise in unemployment. What costs are being cut? What is being done to reign in the spending to match the actual revenue collected? We urge the Premier to explain what is being done. So far the silence is deafening. Is this the Government that we want managing the public purse? What would you do if you fell short on your household budget by over 15%? The truth is self evident.

Update Dec 12 5:20pm: The Premier responded, saying that this is “extremely erroneous” as Government’s revenues are not collected evenly through the year. Full statement here.

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  1. Premier: BDA “Extremely Erroneous” on Revenue | Bernews.com | December 12, 2010
  1. your joking says:

    plus that was revenue over the summer months…winter months coming with no cruise ship revenue and less travel for locals overseas means less taxes coming in at the airport….equals a bigger fall in revenue

  2. Obvious says:

    The BDA seems to be coming with the old mould…very quick to criticize but yet completely blank on proactive solutions. A prediction is just that – a prediction. Again, its doublespeak – on one hand, Mr. Fahy says “we recognise that there is still six months to go and not all revenue collection arms will have reported” but uses the figures to try political point score…huh? Then he again uses doublespeak to say “The situation is so bad that Derrick Burgess reportedly said that the Government has no money to fix accident black spots and prevent road fatalities.” but then asks “What is being done to reign in the spending to match the actual revenue collected?”…Which one is it that you want BDA – to spend or not to spend…?

    I read the economic platform on their website and I can honestly say it is very weak. Before Brown left, they and the UBP tried to use him as a wedge to attempt to create public disharmony with the government. Now he is gone and they can’t question the morality of Premier Cox as that would make them unpopular, they have switched to highlighting economics and finances as that is her remit. It is an obvious strategy and it is weak because it amounts to more politricks which is the exact opposite of what Bermuda needs. We need real strategies and solutions to deal with the effects of recession, while at the same time building infrastructure and keeping fiscal spending balanced. I applaud holding the government to account and monitoring the public purse but this political point scoring is not getting us anywhere.

  3. 32n64w says:

    Obvious – How can highlighting facts and figures be considered a weak attack? The Government has either collected tax dollars or they haven’t. Extrapolating estimated revenue for the next six months based upon the previous six is hardly rocket science.

    Considering Minister Cox is already on record for her abysmal prediction of 2010 GDP I’d rather rely on hard numbers than her failing fiscal acumen.

    • Obvious says:

      I never said anything about a weak attack? I said the BDA’s economic platform as read on their website is weak. Please read and quote what I said accurately if you are going to criticize my statements. That is a big part of Bermuda’s political problem – doublespeak and lack of accuracy on other’s comments. That is the issue I also have with this statement. As you say, “extrapolation” – Fahy says the same thing when he puts it: “we recognise that there is still six months to go and not all revenue collection arms will have reported”…huh? I suggest you read Premier Cox’s response to his erroneous effort to political point score.

  4. Bottom Line says:

    Holding the person who has been Minister of Finance for years is not scoring cheap political points. It’s holding people accountable. Today we’re being asked to Adopt a School because govt has run out of money to maintain them. Tomorrow we’re going to be asked to Adopt a Road for lack of funds to look after them too. I’ll adopted one of the govt’s Orphaned schools when I see some fat being trimmed from Queen Paula’s budget.

    • Obvious says:

      As I clearly say in my comment “I applaud holding the government to account and monitoring the public purse but this political point scoring is not getting us anywhere.” Did you not read that?

      Here we go with doublespeak again – people accuse the government of not being prudent with spending, yet when they come up with an innovative program such as the Adopt a School program so they can bring in productive public-private partnerships, people like you say its because government has run out of money…do you really think that government has run out of money? Seriously? I suppose we don’t have an Auditor General hey…and a whole department of civil servants in the Ministry of Finance right…and the international ratings we achieved do not mean anything either right…Please…I suppose that’s why the government was allowed to back the Bank of Butterfield as $200 million guarantor…which was supported by Bob Richards of the UBP at the time…

      The UK also has a similar program but it is more formal and the schools are called Academies, although theirs allows more influence on the various board of governors, etc. No matter what positive initiatives the government comes up with, there will be people who will cry foul…too much negativity and not enough proactive and positive contributions…aren’t you all tired of that?

      c’mon y’all who you trying to fool…you all just dont like the idea of a PLP government and you will not stop with the negatives until you get them out…

      • Bottom Line says:

        Yeah….I do believe that after the govt has finished with it’s institutionalized welfare (vote buying) it does not have the money left over to carry out basic responsibilities. It has Orphaned out the schools and more bad news is yet to come. Ain’t being negative, just being real.

  5. Hmmmmm says:

    To Mr. Fahy and others, the Budget Book is a public document. Peruse it and tell us what you’d like the Government to cut. Travel? No problem. That’s an extra $2 million in the kitty. Fat lot of good that will do to help the economy. Stop these ridiculous assertions about Government cuts in spending as the answer to the problem.For as long as the answer to revenue generation in this country is the one stream of international business we will always be uncertain about our future. Diversity doesn’t just begin with the BDA’s membership; it applies to the economy too.

    • Obvious says:

      I agree Hmmmmm…diversification is critical. Obviously IB in the traditional sense is important. Tourism is also crucial to the economic sector diversity. I believe that E-Commerce, although growing in Bermuda, should be focused on more as a way to diversify. I say this because e-businesses need a much smaller physical footprint but have the potential to bring in large amounts of capital if we are able to set up the business environment to attract more in this sector. One strategy to do this would be to set up an e-commerce “Industrial Freezone” where businesses could operate in and pay very low rents or low taxes and also have bespoke technical infrastructure already incorporated in the physical plant with priority bandwidth, etc. This could attract businesses such as software companies, IT consultants, e-commerce trading platforms, virtual companies, data storage, etc. If we also encourage our offshore fishing markets as well as aquaculture, this could add another arm, although not as major as other sectors. I also believe that we can have a strategy to encourage Bermudians to invest in businesses in external markets but offer them incentives to wealth manage their investments in Bermuda. This can add additional capital to our domicile.

      A colleague of mine also reminded me that we also need to not just diversify industries and sectors but also look to diversify markets. So in other words, while IB may be waning from the perspective of North American clients, we can look to diversify to other non-traditional markets such as South America, Africa and Asia, etc.

      All these are just ideas but I believe we need more positive and constructive concepts rather than just negative political point scoring.

      • Bottom Line says:

        Our kids are being shot every day! They lack for any kind of love…that all kids deserve. A child with no love is a Weapon! Botton line, our govt is Bankrupt!..financially and otherwize. They look the other way for fear of loosing votes. The ministry of education processes functional Illiterates! The govt is Gangstaa Friendly, and you have the nerve to put down those who only want a return to good governance, a re-connect with our kids, and law and order? You can stick your head straight up your “Industrial Feezone”!!

        • David E. Chapman says:

          Bottom Line – its people like you that make progress towards any common unity and positive constructive measures difficult. Just spouting off generalizations and venom.

          1. Whose kids are being shot? All of the political parties are affecting by the gun crime not any one specific party. In reality though, it is up to families to unite and love one another, not a government and definitely not a political party.

          2. The government is bankrupt? Financially – Ok, now I know you are deluded. And you say otherwise, which I guess you speak of as morally, etc. Well, there are several MPs and Senators that make up the government so I guess to you they are all bankrupt. You have a right to your opinion but again it sounds like empty rhetoric and sour grapes. Give me some examples and if you have some I am sure you will not be able to evidence it and most likely will focus your attack on the same ole firing line that the media has trained Bermudians to hate.

          3. The Ministry of Education processes functional illiterates – ok, well being that I am a product of the ministry of education and so are my children, who are all achieving excellence than I know that you are speaking garbage. I guess CedarBridge Academy head boy Andrew Fleming who just featured in the Royal Gazette as having been given a place at Mount St. Vincent University and coming top in his year with a near-perfect grade point average of 3.98 is telling a lie when he says “There are negative things you hear about the public school system, whether it be high school, middle school or primary school, and there actually is a lot of positives going on.” The difference between success is sacrifice – whether it comes at a personal level, familial, or community level.

          4. The government is gangster friendly – ok, right. And how is that? Don’t you know that the governor controls the police and its actions. The government can only work with the police and ask for initiatives to be taken. And the governor as recent as December 2010 said to Senator Dunkley of the UBP, who made the same accusation, “If those changes are not evidence of what Senator Dunkley terms action-oriented leadership, by the police, supported by the other law enforcement agencies and by an active Minister and Government who have been willing to find extra resources when necessary, then I’m not sure how I would illustrate that phrase.”

          As to your last statement, again just negativity rather than anything constructive. Please, do you have any suggestions…I’m being serious. Bermuda needs positive dialogue not more divisiveness.

          • Bottom Line says:


            1. It’s hard for many working class families to unite because they’re out working 2, sometimes 3 jobs. Why? Because the govt allows (the PLP does control immigration?) poorly paid foreigners, who are living in sub-standard housing, to flood our labour market. Positive suggestion? Hey, why can’t the PLP introduce minimum pay standards and ensure migrant workers are not being crammed 2 and 3 at a time in bachelor apartments.

            2. If I’m “deluded” do you mean to tell me the govt actually has plenty of money to maintain their schools? If that’s the case, then my positive suggestion would be to put out to tender the maintainance work for the schools. That might help our struggling working classes who are today facing structural unemployment.

            3. Govt’s own statistics place half our high school graduates as having sub-standard reading and writing levels (that’s code for functional illiterate). Govt managers/dept heads interviewing these graduates for jobs confirm a majority of applicants cannot pass “simple” tests. I guess these persons are “deluded” too. Suggestion? Stop the social promotions going on in the schools, and get our illiterates (please tell me you don’t deny their existance) into reading clinics. Here’s another positive suggestion. From 3:30pm to 5:00pm our kids could take part in after school programs. When I attended school in Bermuda it was mandatory for every child to attend at least one after school club per week.

            4. I stand by my word…and Bermuda would appreciate you not being so pathetic by blaming the governor for the PLP failures to bring back law and order and get rid of the gangs. Suggestions? Give the police commissioner what he needs to run the gangs out of public areas.

          • your joking says:

            I do not wish to put the young man down in any way and wish him all the best and hope he does something great with his life..But…this is your example from Cedar Bridge??/ the example is supposed to be the cream of the crop..Mount St. Vincent University pretty much accepts everyone. It is ranked 59th in Universities of Canada, a countries which doesn’t have many top Universities compared to say the U.S.
            If this is your “Example”, the top of the pyramid, I hate to see the kids on the bottom which is were the majority are.

            • David E. Chapman says:

              Your Joking,

              C’mon now – it would be impossible to name all the successes that come out of Bermuda’s schools on a yearly basis. I never said the example was the “cream of the crop” but in reality, does that even matter? He is one, just one, example of young man that has succeeded in the Bermuda school system. And there are many, many others. Just because someone doesn’t achieve a 3.5 GPA and higher or 6 GCSE, etc. etc., that doesn’t meant they cannot be considered successful. There are also many children that have learning disabilities and our teachers in both public and private are working hard and consistently to help them along, despite issues in many of their social lives. I just chose to highlight the positives while working to change the negatives. Blessings…

  6. Eyes wide open says:

    Perhaps obvious should rename himself/herself Oblivious since it is quite obvious that he/she is oblivious to the real world & the real financial mess that Bermuda is in now. It will get worse, much worse, before it gets better. Obvious comes up with a bunch of Paula Cox sounding “WAFFLE” for solutions. Nothing solid. Just fluffy stuff with big words having no real substance.

    Anyone who has followed Bermuda political blogs & forums in past few years will know that the likes of DEC are simply not worth responding to.

    Both wanted some solutions. BL provided some. Viable? I don’t know, but they are certainly more specific than fluffy words like “diversify” & “economic free zones”.

    Open your eyes. The PLP has failed & the PLP has failed miserably. Their house of cards is coming down around them.

  7. Hypocrite says:

    “Bottom Line – its people like you that make progress towards any common unity and positive constructive measures difficult. Just spouting off generalizations and venom”

    @ Mr. Chapman,

    That quote of yours above can also be afforded to certain others as well.

    • Hypocrite says:

      Since Bernews edited my quote above…

      The ppl that are “others” are individuals that you ;probably know more intimately than anybody else…

      As they say you can choose your friends but you can’t choose your……

  8. David E. Chapman says:

    Ok…here comes the personal attacks. Hypocrite is obviously attempting to associate my mother with my personal and independent comments here, despite BERNEWS interventions. Simply immature. It makes positive and progressive people who actually are looking to give constructive feedback just want to not even participate. But nevertheless, I will continue to give my own personal and independent perspectives on issues affecting the nation in a open and constructive way.

    Eyes Wide Open – you must be mistaking me for another DEC because BERNEWS and Facebook are the only two online forums that I have participated in. But nevertheless…

    Bottom Line, thanks for giving some concrete suggestions, although with rhetoric attached,…much appreciated. To humbly dialogue, my views on your first suggestion, I believe there is already a minimum wage. Perhaps if the minimum wage is increased more, this may then again increase the cost of living in Bermuda. I have heard the argument against immigration rates but there is also a strong case for the rationale that Bermuda does not have the labor force necessary to keep up with the construction labor requirements. Many contractors will tell this story. I am not sure how much government should/could intervene on the private business of landlords as far as rental units. However, this should be theoretically controlled by the immigration rules on the front end. I know the BIU and other persons/organisations involved in construction have been working hard to ensure that jobs that Bermudians can hold are not being held by foreigners. There have been some successes.

    To the schools and their maintenance. I am not sure about the budgetary amounts available to Works and Engineering for schools etc. However, I think that the idea of public-private partnerships as mentioned, similar to the UK “academies” concept sounds promising. It will help to cut government spending as this seems to be a big concern expressed by many in the community. As Bottom Line says, giving jobs to Bermudians is obviously the priority if they arise. So I do not think it matters who is spending on the school maintenance as long as Bermudians are being utilised. I think, actually, it would be better if it wasn’t government funded as government debt is a concern in these times.

    There is no “social promotion” in schools as many people associate with the old system that was put in place directly after the introduction of the middle schools. I was a teacher for five years and the practice of social promotion can not be equated with todays system as the students do not “pass” by year but by curriculum requirement. So a student who has not passed credits in a certain subject could easily find themselves in a class with all younger students, etc. although they may still be in the same form room as those students who are their age. However, I do agree that there would be more “sting” in the bite if students did not even move forms, but there is a thin line between encouraging students to progress and embarrassing them which acts as a discouragement. The way the system is now kind of allows the best of both worlds. However, I am an advocate of removing the middle school concept as well as giving more support to technical subjects, etc. I do not believe just replacing the curriculum (aka Cambridge Curriculum) is the panacea but it will give a standard to work towards. This is important for stability, regardless whether it is the GCSE system of the International Baccalaureate.

    In terms of the police Bottom Line, I don’t know what more I can say in place of what the Governor himself said. I myself ask, if the government has decided not to prioritize the installation of cameras, why? Seeing the changes that has happened in Harlem, NY and Brixton, London lets me know that it is possible to remediate areas…

    • Bottom Line says:

      The PLP really have out-UPB’ed the UBP.

    • Hypocrite says:

      It’s not an attack. It’s a fact.

      I just find it amusing that you have the audacity to lecture others on debating and accusing them of “spouting off generalizations and venom.”

      Kettle and pot type situation I guess.