OBA Delivers Reply To The Budget
[Updated] We are facing the greatest economic disaster in Bermuda’s history, Shadow Finance Minister Bob Richards said this morning [Mar.2] as he delivered the One Bermuda Alliance’s reply to the 2012/13 Budget in the House of Assembly.
“We have major concerns about the Government’s Budget for the coming fiscal year. If you had asked Bermudians before last week’s reading of the Budget, they would have said ‘We need jobs’, or ‘We need to control the Government’s spending’ or‘We need to reduce the debt,” said Mr Richards.
“But the Budget unveiled by the Premier does not meet any of these needs. It offers no plan to grow jobs. It continues to grow Government spending and it adds a staggering $200 million to our debt.
“This Budget will do nothing to move Bermuda out of our economic doldrums. Indeed, it will only deepen the hole we’re in. It is, in effect, a desperate Government construct to postpone dealing with the realities of its own record until after an election.
“More deeply, it reveals a government fast running out of options, calling in its chips and hunkering down hoping the storm will pass. It is exactly the opposite of what Bermuda needs today,” said Mr Richards.
The chart below was extracted from the OBA’s Reply to the Budget:
“The OBA has a plan to wrestle this debt to the ground and it contains two essential elements. First, get this economy growing again, thereby increasing government revenues. Second, take strict and decisive action as it relates to government spending.
“This strategy will, over the medium term, bring the debt to heel and reduce the burden the next generation will have to bear,” said the Shadow Finance Minister.
The full statement is below [PDF here] click ‘Fullscreen’ for greater clarity:
Update 12.50pm: The Ministry of Finance released a reply refuting assertions contained in the Opposition’s Budget Reply. The statement follows in full below.
The Ministry of Finance has moved swiftly to refute an assertion in the reply to the Budget speech by the Opposition.
The Shadow Minister of Finance’s graph on Page 18 of his reply shows the difference between Government Budgeted Spending & Actual Spending for the current account for various periods commencing in 1990/91. These graphs are misleading and do not present a complete picture.
For instance, if we look at the SMOF’s graph for 2004/05, it shows additional spending of just over $62 million.
If one reviews the financial statements of the Consolidated Fund for this year it is clearly noted that in 2004/05 relief was provided to the Public Service Superannuation by way of a $52.2 million write-off that was due to the Consolidated Fund from the PSSF.This balance due from the PSSF had accumulated over the few years before 2005 and was due to PSSF contributions being less that benefits paid from the fund.
This problem has been rectified when Government increased PSSF contributions commencing in 2006. This item was recorded as a special contribution to the PSSF and was a one-off accounting entry.
The additional spend of approximately $48 million recorded in the graph for 2006/07, again includes an extraordinary accounting entry and does not represent normal recurring current account expenditure.
If one was to review the Financial Statements of the Consolidated Fund it would be clearly observed that in the 2006/07 fiscal year Government wrote-off the Bermuda Housing Corporation (BHC) loan due of $49.5 million which was due to Government. If this one-off amount is removed, the $50 million additional spending reported would actually become a minor current account surplus.
The Government made this decision to assist the Bermuda Housing Corporation with the carrying out of its mandate to assist with the development of affordable housing, by providing relief for amounts outstanding on loan to BHC. This action also reduced the debt on BHC’s balance sheet so that they could access capital markets without Government assistance.
It was also done to relieve them of the interest they were paying to Government for the loan. This write-off had to be accounted for as a grant to the BHC even though no cash was expended in this year.
The most important thing to note is that these items above were affordable. In 04-05 the government took in $88.5 Million dollars more than budgeted, and in 06-07 the government took in $48 Million more than budgeted.
If we exclude these extraordinary on time items, the Government’s management of the public finances prior to the financial crisis is one of prudence and restraint.
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Let the trolling begin. Come on PLP supporters, let’s hear it. Before anyone says it, I do not expect the OBA to share their plan with the PLP, and I don’t blame them. Why bail them out just so they can stay in power and f*ck us over again later?
Out with the PLP, in with ANYONE else that has a better plan
I have a great deal of respect for members on both sides of the House; however, if someone has a plan to better educate our children, stop or limit crime, improve our budget or plan a stronger economic path forward, then let’s hear it now. Why wait until one is in “power” to unveil the plan that serves our country. No disrespect to the OBA but if they have an answer and have yet to share it for fear that the PLP would use it, then couldn’t one argue that they do not care about the country anymore than their adversaries? Would that not be the ultimate sign of their own thirst for self-serving power?
The whole purpose of putting oneself forward to run in politics is to serve the people nothing more or less; at least that’s how it should be. So if there is an answer that will stop another youth from being killed, or living fear of being killed; or help people get back to work, I for one would love to know the answer now; not tomorrow.
@”Think About It: The PLP have already been given the Solutions to save our island. But PLP reject these Solutions because they do not have the political will to implement them. Or should I say that PLP have rejected these Solutions because PLP are addicted to power.
That’s right Bob, don’t share your plan with P.C. Don’t bail them out now so they can f*ck us later. Wait till the OBA is in power and show them how to properly run a country
He’s already shared his plan…
End work permit term limits, and everything will take care of itself!
Sorta like what the Caymens are doing trying bust our butts…?
Intersting how Bob Richards will never say what “Strict and Decisive action” means.
Bob Richards, what would you cut?
Police Salaries?
Pensions?
Teachers?
Public Transport?
Please let us know what you would cut.
You had a whole week to come up with a reply, yet you cut and pasted from last years UBP response..
What would you cut?
Read again
Police salaries the PLP want to do that.
Pension the PLP have frozen that.
Teachers one of the first places the PLP cut.
Transport either the cut was to overtime or no money was spent on the serviceing of busses or can’t pay for the parts needed no sure on this one.
LOL next
I have skimmed their document and there is nothing in here about helping people, its about helping companies (perhaps they believe corporations are people too?). Nothing about training, nothing about assistance to families, nothing about giving our youth opportunity. It will all be right by them with a change of government and more help to business. Trickle down economics gone wild.
OBA don’t have a clue, their whole economic policy can be stated in 5 words
END WORK PERMIT TERM LIMITS
Last time I checked COMPANIES employed people… the short term solution is to generate jobs to employ our people. If we can attract companies who will do that then that at least stops the bleeding.
I’m not a fan of ending term limits but above all else I am a REALIST and recognize that we are in dire financial straits and the only way out is if we stop acting like the sun shine’s out of our collective behinds and are more inviting to foreign investment and individuals.
We are a 20 mile rock in the middle of the Atlantic that whether we like it or not is DEPENDENT on foreigners and foreign investment to live the quality of life that many have become accustomed to…
The lack of training, job skills, education, opportunity is largely a result of our inability, unwillingness and general apathetic attitude towards address declining educational standards.
Get over it, Bermuda.
….and the people companies employ then employ people…not rocket science.
duh…when you help companies you help wealth and job creaters to help Bermudians and foreigners alike…jeesh. Get off that hand-out mentality of helping, assistance, entitlement and every other lame excuse for people not doing what they should to Hand Up where government helps companies who help anyone who wants to move up by providing honest work for honest pay…really simple innit?
Please do not say the OBA didn’t list any real solutions as their solutions are CLEARLY outlined in the transcript. Whether you agree with them is not the same thing as stating they didn’t provide any. Save your breath
Suggestions is one thing, however whether or not they will do ANYTHING for the BUDGET is another.
This is a Budget reply, not a platform.
BUDGET!
You don’t make sense, helping the economy will help the people. In case you haven’t noticed, the failing economy is WHY people are struggling. It’s not really two separate things, they are tied closely together. What part of Paula’s budget directly helped the people? Please explain
In case you haven’t noticed the government doesn’t really have any money to give more free handouts. That is why seniors freebies have been scaled back and no more free college. More with less…
here we go. plp hacks. oba says growth and tnen you dont need to cut! civil service reduction by attrition is huge. oba is growth and confidence. plp is about being xenophobic, short sighted and debt.
imporve tourism product – actually have a plan – it will be a change. fact is we need a change in government. get over it plp – you are done now you are desperate. 9 points down – even a plp sympathiser poll says it!!
OBA is presently laying out what they wud do when we are government. Things that flipPLoP PLP don’t have a clue about. What more can be said about the PLP? Oh I know…. Please Leave Politics!!!
There you go die-heart UBP/OBP fans Jim Bean, Cancer & Pastor Syl…….spinning out the same thing…..no real solutions by Mr. Richards. Same ideas mention before, and many have already been put into place by the PLP. I was looking forward for some real solutions. Now go on ……say it……UBP/OBA ….diehearts…………………ahhhhhhhhhhahhh
Read the document above for their proposals…
And your point is? I wouldn’t call myself die-hard anything any more although I once was a die-hard PLP supporter. No more. I see the suffering of my fellow Bermudians – the ones who live in cars and on the streets because there was money for travel but not for fixing the Salvation Army homeless shelter; the ones who don’t get medical care until they end up at the ER with cancer because the Indigent Clinic was closed by Dr. Brown with no provision made for replacement care for those without insurance; the ones whose mortgage payments were dependent on IB rentals and are now in danger of foreclosure. I mourn the loss of the Sunshine League and the Hustle Truck. I feel the pain of Teen Services, the Family Center, Focus, the Mirrors Program, the Zoo and Aquarium, and a myriad other agencies and services that work with children and the less fortunate as they struggle to survive under a government that professes to care about them but took more than a year to agree to a 5% pay cut on salaries that exceed $160K for a minister, and nearly $400K (that’s four HUNDRED thousand dollars!) for the Premier. Who needs that much money when the country is sinking around you? There is no justification for that. Nor can you persuade me that borrowing on top of incredible debt to pay salaries and build more houses on South Shore, destroying the most beautiful coast line (already damaged by those eye-sores across from Swizzle) and blowing up an already inflated real estate market is “investment.” Not to mention the constant rumours of scandal and skulduggery. I want my leaders to set a good example, and at the very least show some remorse when they are called out. I don’t accept that all is well just because people haven’t been taken to court YET. In this climate, every ‘i’ better be dotted and ‘t’ crossed before bringing charges, so I am content to wait a while for what I consider to be inevitable.
While I’m mentioning all the things that have turned me against the PLP, I wish Bernews would do an expose on Ministerial interference. Dr. Brown was a past master at sticking his political finger where it didn’t belong, although he never got charged for it – I still wonder why, when there appeared to be ample evidence – Kenneth Dill and LeYoni Junos come to mind. I’m sure it didn’t stop just because he left front and center stage.
I wouldn’t call myself die-hard OBA but I would say I am TOTALLY disgusted with the PLP’s performance over the last few years and I will absolutely, definitely, without a doubt, NOT be voting for them in the next election.
Did you even read the actual response??? From your comment it doesnt seem like it as Richards outlined numerous things they would do. Try actually reading the document then adding constructively to the debate.
OBA and UBP are not one party and the fact that you continually refer to both parties as one “OBA/UBP” only reinforces the lack of intelligence in your comments
@ What about the People: Please go back and read the document again. Read, not skim.
I’ve readt it now, and the facts are the facts.
This is about a Budget.. please tell me any of their suggestions that would have any actual BUDGET implications.
I just wish the OBA would tell us what Strict and Decisive spending cuts they would make? They may be able to get away with it now, but they won’t be able to get away with sayign nothing come election time.
Better the devil you know than the one you don’t.
“Better the devil you know than the one you don’t.”
Too funny. Ask the UBP how that worked out for them in ’98.
Questions to Mr. Richards: Be honest before the elections:
WHAT STRICT AND DECISIVE SPENDING CUTS WOULD YOU MAKE? Be honest now…..
Read the document above…
Be honest? Why would you ask something of someone elses party that you wouldn’t ask of your own?
“Better the devil you know than the one you don’t.” Nonsense. Ewart’s PLP/BIU Party has been/is the worst government Bermuda has ever had. We simply cannot afford them any longer.
@star man …..Stop killing yourself over that brillant, smart doctor, who you could not get over. He stood up strong against people like you….thats what kills you so much./……..Now back to the weak reply by Mr Richard…..WHAT WOULD YOU CUT??
What “budget implications” would you like to see?
Increasing taxes on seniors (plp)?
Increasing import duties to “help retail”(plp)?
Decreasing import duties to “help retail” (plp)?
Promising revenues of $28m a year for a pie in the sky project that will probably never happen (plp)?
Conveniently forgetting the last big idea you had, 3 months ago (plp, now telling us we will not get anywhere in the Space Business)?
Increasing debt..borrow, borrow, borrow (plp)?
Are they the kinds of ‘budget implications’ you enjoy seeing?
the ubp did this already, when they were elected in 1964, they took care of business but left the ppl to flounder what happened, a riot in 1965, a riot in 1977, an island wide strike in 1981. bermuda doesn’t need that type of govt anymore. if the ubpoba get in they will end permit limits, the business class will squeeze out bdans and we will be left 3rd class citizens in our own country.
but bob will not even win his own riding let alone a national election
VOTE PLP – VOTE FOR THE PEOPLE
REJECT THE OBAUBP – WE CANT AFFORD ANYMORE RIOTS AND ISLAND WIDE STRIKES
Trident- You really do talk a load of rot!
Unfortunately, @Dee….. Trident’s reflection of history is correct. Read the history on this…..1965, 1977, 1981 …Bermuda history and reports reflect just what he said.
Ok so let me get this straight. Ubp is to blame for the 1977 riots? Because they hung buck burrows and larry tacklin for murder? Known members of the black beret cadre. I’ve said this to you before and I’ll say it again, members of the black beret cadre are still in the plp today! So before you point fingers at what type of government you don’t want running this country, make sure your hands are clean. By the way before you try and label me as an oba loyalist, I support no government, its a broken system
Remember, remember the…
HISTORY.
Living in the past… that’ll surely help.
@ star man…….“Those who fail to learn from history are doomed to repeat it.” – Sir Winston Churchill… it is important to know one’s history as well as reflect upon it.
The PLP have been repeating history for some time now when will they learn? Please Special show me how you and others have learned from history and are not not repeating it…………
LOL
Please the PLP has been in political power for only a minor 13 years, while the OBA/UBP has been for well over 30 years. Their history track is much longer, and so they repeated it at every opportunity afforded to them. They never did learn, unlike the PLP who are willing to make changes and adjust were required.
Make that quotation from George Santayana.
1964 ? Are you joking ? 1964 is barely relevant to running a country in 2012. Just in the last 10 years, the business of running a country has changed completely due to technology and media in particular. no Party could be the same as 10 years ago if it wanted — let alone 48 years ago! the PLP is completely different than it was 5 years ago. Did you see that graph? Change is happening right now and the PLP is desperately keeping up by borrowing $200 million every year. $200 million. How long can this keep going ?
Wow, you guys must really be scared of losing at the poles if you are coming with this type of fear mongering. I thought you were more confident that this…
That is what they call raising the bar on the issues by bring up the past and not acctually talking about the issues and trying actively to shut down the disscusion.
LOL
youre right we cant afford strikes…how aboout you remind your BIU friends about this next time they decide to strike over stupidness (i.e. the bus strike this summer)
I encourage all PLP supporters to with hold their votes at the election (that means don’t vote for you who don’t understand).
Everyone else, vote for anyone EXCEPT the PLP.
Have a nice day.
“A voteless man is a hopeless man”
Martin Luther King, Jr. worked hard to help African-Blacks use their “right to vote” to change the government and make sure Blacks would be treated fairly.
Whites invented many ways to keep Blacks from voting. They succeeded for almost one hundred years. One must always exercise their right to vote, it was fought for hard. Bermuda history reflects that persons also had to fight for the right to vote. It was a hard fight. Voting is often sometimes the only say a person has in their country. Vote is a human right….do not let no one stop you…….
“The best argument against democracy is a five minute conversation with the average voter.”
Winston Churchill
One of my favotite Winston Chuchill quotes & oh so true.
The sad fact is that the vest majority of people don’t have the slightest clue of what makes the world go round & are totally unqualified to have something as valuable as a vote.
Politicians know this & play on it telling voters what they want to hear & making promises which they know cannot be kept.
That is a “SPECIAL” quote.
is that the new line Trident? OBA will mean riots? you are doing exactly what ubp used to say about plp – that a mass exodus would occur of Bermduains. did not happen – they stayed and are now poorer for it. plp – your time is UP!! Please Leave Politics
Irony. Ewart Brown was a memeber of the BBC and a Black Power advocate.
Look what hapened.
Fact is, when they got the power, they shut it down and called a consultant.
Nothing further to say on the matter.
Let the people speak or become part of the 4th dimension.
AHHH, Bob Richards making up figures again. Shocking!
Be specific.
Very interesting bar chart – note how the rate of debt increase (the derivative or rate of change of the function)goes up steadily in the Jennifer Smith and Alex Scott years and then explodes practically exponentially from the Ewart Brown years onwards. Where could all this money possibly have gone? Does anybody have any idea? Is there any way of getting it back?
Correction: the rate was practically zero during the Jenifer Smith era; it began to take off around the time of Eugene Cox’s be called to the Great Beyond. It mainly all happened on the Cog’s watch.
How are “they” gonna get OUR money back if they are NOT LOOKING FOR IT?? We know where it is, but no one’s come to the wicket to try and get it back. Yet.
I have a pretty good idea where a hundred million or so went.
Funny how Bob Richards includes 200 Million for Butterflied that was never borrowed……
Making stuff up daily
@trident… You can’t come better than that? Leave “Scare Tactics” to the TV series..
Trident is using the ole tumor ploy.
Time to rid us of this cancer.
@CANCER,,,,no one is better at scare Tactics than you…..you that boogy man in the bush….no one can see….but spinning out political rhetoric every moment of the day./////UBP/OBA Rhetoric…..
lets just fix the issues with inequality and then everything else will fix itself.
Yes lets all be poor together and hope we don’t try to rob each other and or worse wait um right happening now………….
LOL I see no working PLP solutions
We’ll I would admit that the PLP under Ewart was a mess but I am rather impressed that Paula has and continues to take steps to undo the crap!! The one thing I would also say is that i trust no politicans and they all talk and good talk and walk a good walk until they are in power. OBA will do not better. In fact with the their list of criminals and failed businessman and just out right liars we all need to be very careful as at this point PLP and OBA are looking very similar to me!!
I second that last part! Very similar indeed!!
SHOW AND TELL
The Ministry of Finance’s quick and spirited reply cum accusation gives excellent but unintended insight into the background to some of Bermuda’s financial problems and into the mindset of the Ministry’s top financial managers.
The MoF refers to Bob Richards making two errors in his chart on page 18 (Figure 6). The period that Bob speaks to is the time between 2004/05 and 2010/11. That’s 7 years. The MoF suggests that Richards was wrong for 2004/05, and 2006/07. The remaining five years are not referred to.
The inference – from the MoF response – is that the remaining years, 2005/06, 2007/08, 2008/09, 2009/10, and 2010/11 are correct.
The key points are that there was consistent overspending. That the overspending really took off in 2004/05. That the overspending has continued and shows a pattern of increase.
The MoF pickup of the point about the isolated two years is a picky point that misses the strategic issue. That’s the pattern of financial management and acumen displayed by the MoF and their answer.
Sweat the picky point. Miss the big issue. Get it wrong in the end. The bars in Figure 6 on page 18 and the MoF response show and tell a big true story.
Larry,
Just like before when you got it wrong, you can’t call it “overspending” if money is never spent. Accounting entries are NOT spending. Forgiving debt to GDP is not spending.
@ Larry Burchall,…..Guess you work hard with Mr Richard to develop a response to the Budget? When are you been rolled out? Mr. Burchall you are quick out of the wicket, spinning persons to beleive that everything you and Bob put together is correct? Why is there this need? I better be careful to examine the data for myself…as you seem politically motivated to make a point on behalf of the OBA/UBP.
And somehow in your twisted psyche you believe that such a respose is somehow “raising the bar?”
Raising the bar of hypocrisy for sure…
….and?
Just like before when you got it wrong, you can’t call it “overspending” if money is never spent. Accounting entries are NOT spending. Forgiving debt to GDP is not spending. C’mon Larry, you are better than that.
Voice of Reason, very interesting.
I spoke to a pattern of rising overspending. There is a wee problem with the accounting description – so you take the argument to the exact meaning and import of an accounting word.
Taking the argument down to the picky point and leaving the strategic issue alone is the behaviour that I described.
Your picky p;oint argument/response amplifies and supports the point that I really made.
Thanks for your help, although you’re probably not aware that you gave help.
So Bermy, what do we about about the thief/ves that stole our monies.
Just write it off?
How they pay you.
Rummy name the thief/ves the BPS is awaiting you evident…Let’s get this over with…
Time Rhonda, time. The thieves will not launch an investigation into the affairs of themselves.
marc bean is a ranting fool
@Jim Bean…….I think you should apply that name to yourself. At Least he is providing service to his country. WHile your busy hiding in cyber-space lyching him and others, like a OBA/UBP coward. Come on up the level of your debate instead of the same old name-calling you and others do.
Thanks for the analogy …
Specialgirl4you you are the one famous for name calling so speak for yourself. Now that you see PLP are losing in practically all the polls you want to be humble and raise the level of debate. Your funny! I just hope you along with LaVerne are going to accept defeat when it comes.
@CANCER……do not believe the polls….recall past elections…they always reflected that the UBP/OBP would win. Polls are merely a snap-shot of a particular time frame. Nevertheless, the PLP won the elections in all cases….The only correct poll was that of Walton Brown which suggested the PLP would win. No one believed him……So you might get a big surprise. There are too much undecided voters…and they have clearly indicated they are not going to give the vote to the OBA/UBP. This suggests your political strategy to talk about the subject of “Debt” has failed the OBA/UBP. Or many are not impressed with the OBA/UBP. If so why have folks not given their votes automatically to the OBA/UBP? You always present such a low level of debate…that is why I suggest you attempt to change….but maybe change is impossible for you? OBA/UBP are struggling to gain those votes….person will not give it to them, and do not see it as a viable party, as it still a resembling picture of the old UBP guard. Hey go analyze the data carefully for yourself…..this will reflect my review is correct….
You need to take your blinders off! SG4U – like so many others are doing…
After hearing that great response to the Cogs budget which will put mr grandchildren in debt the people now know that the OBA is the government for them! Thanks Bob Richards and Craig Camnonaire! CC premeir in waiting!