Finance Minister: “Status Quo Is Not An Option”

February 24, 2014

Bermuda is seeing a “fragile” economic recovery that could be “easily derailed”, Finance Minister Bob Richards said at the Chamber of Commerce’s Annual Budget Breakfast today [Feb 24].

The event was sponsored by PwC Bermuda, and in a panel moderated by PwC Bermuda CEO Darren Johnston, Minister Richards was joined by Peter Everson, the President and CEO of PEConsultants, and Ed Ball Jr, the Bermuda Public Services Union General Secretary. Governor George Fergusson, Premier Craig Cannonier and US Consul General Robert Settje were among the 350 people in attendance.

Mr. Johnston, Minister Richards, Mr. Ball and Mr. Everson:

Annual budget Breakfast

“There was a strong consensus among the panel that a new spirit of collaboration among business, labour, and Government will be necessary to restore the economy,” said Mr Johnston. “It is now up to each of us to exhibit that spirit and to do our individual part, whatever that may be, to benefit the whole of Bermuda.”

The panellists were asked by Mr Johnston to give their view of the Budget in a 140-character tweet.

Mr Ball responded: “Meaningful consultation, collaboration and commitment is required by all stakeholders to keep the IMF from our shores.”

While Mr Everson said: “This Budget is about as good as it can be under these difficult circumstances. How well the senior management in the Civil Service perform will define the outcome.”

Minister Richards warned the island’s financial independence “is at risk” if it doesn’t manage economic recovery well.

“If we don’t all pull together in the same direction we are not going to go anywhere,” he said.“The status quo is not an option.”

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Comments (18)

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  1. Living in Reality says:

    I have said it before on this site and I will say it again.

    You all should be happy with this budget and the plans to reduce our crippling deficit and unsustainable debt levels.

    Continuing on wiht our irresponsible spending ways will only lead to BDA requiring emergency loans from extenral sources as the debt markets will be simply too expensive for BDA to partake in going forward.

    The UK is broke and can’t help us if need be. So the next, and really only, option is an emergency loan from the IMF. And I will say it once again if the IMF gets their grubby fingers into our pie you all will be wishing that we sought to reduce our deficit and by extension debt via the SAGE recommendations. If you think I am being hyperbolic then I suggest you do your research on the IMF’s Structural Adjustment Loan program in terms of lending it issues to countries experiencing severe financial difficulties. Then research the requirements and subsquent effects that these IMF loans had had on the borrowers and their economies.

    Just look at what Barbados had to do to 3,000 Government workers earlier this year.

    And yes our Government finances are that dire at this point in time that such intervention would be required if we don’t work together and fix this massive issue. As Mr. Ball noted below:

    “Mr Ball responded: “Meaningful consultation, collaboration and commitment is required by all stakeholders to keep the IMF from our shores.”

    • Jus' Askin' says:

      Again, OBA IS SITTING ON $750 million .So stop with “…the sky is falling…” routine please ;-)

      • Tired of it all says:


        They borrowed $750 million to cover the projected budget deficits over the next three years. It has been stated numerous times. Richards also borrowed the full amount in one go as a means to lock in the low interest rates currently being offered in the financial markets. So imagine if this Government just kept on going to the market year over year to borrow to fund our deficit and all of the sudden interest rates turned against them. That would result in much higher debt repayments.

        The Government as mentioned borrowed the $750 million to bridge the forthcoming budget deficits projected by themselves over the next 3 years. They know, as anyone should, that it is absolutely impossible to slash our gargantuan deficit in one go and must be slowly and gently eliminated. Any massive cost cutting to balance the books would have sent a massive shock to our system with thousands upon thousands of Bermudians being negatively affected. Do you prefer that option instead?

        So stop typing the same thing about the Government is simply sitting on $750 million. It seems that you are abdicating for the full borrowed amount to be spent now for simple short term gain that will only result I’m long term pain.

        If you don’t understand issues then it is best that you don’t speak on them until you at least have a basic grasp of economics, Government finances and how the Bermuda economy actually works;)

        • Sara says:

          They still haven’t learned have they?

          • Redmen says:

            @ Sara – No they haven’t, nor apparently will persons such as Jus’Askin’ ever learn. Double sigh.

            @ Tired of it … Nice try but you have to want to understand, sadly too many just don’t.

            jus’… and others just exhibiting their Victim Mentality.

            • Jus' Askin' says:

              Victim Mentality, now that’s FUNNY :-D

              Please tell the majority of Bermudians why sitting on $750 million is better then using some of it to generate more money is ‘smarter’. Please ;-)

          • Jus' Askin' says:

            Please let us know ;-)

        • Jus' Askin' says:

          You’re Funny :-D
          My stating of the $750 million, is to say we have money and the sky is not falling. As the money sits and gains interest, where does that interest go? This to me means the government had no revenue generating ideas. Put $750 million in the right person(s) hands and they can multiply it, pay of our debt, pay themselves and have money left over.
          Sitting on it after you borrowed it based on numbers in which you are not even using anymore is amazing. “Money is meant to be spent, spend it on something that makes you money.”
          To be honest I really do not know how Bermuda’s economy actually works. It has always fascinated me. As I do not know. Can you please tell me?

          • Suzie Quattro says:

            It doesn’t ‘sit and gain interest’.

            Let me put it to you so that even you can get it.

            We borrow money at 6%.

            We needed some of that money right away. For the rest of it, until we need it, we put it where there is no risk of investment loss. Which means, these days, an investment vehicle which pays very little above zero.

            But hey, if you know of ways to invest money with no risk, and which yields enough to “pay of our debt” (I think you meant ‘pay off’, but whatever), let us know. You’re obviously a financial genius. The shortfall is about $300m a year. Let us know where we can invest – say – $500m and get returns that exceed $300m a year. We’re all very interested.

  2. Terry says:

    Define status quo.

  3. Jus' Askin' says:

    Are you serious? Our “…financial independence “is at risk”
    We depend on others :-D

  4. Vote for Me says:

    MP Richards – stop with the scare tactics! Bermuda is well within its capability of paying its debts. There will have to be hard decisions but we are a far cry from external intervention.

    Ed Ball, I heard you compliment the Minister for a fair budget. What will Chris Furbert and your fellow TUC members think!!

    • Story Teller says:

      Do you honestly believe that we continue to rack up massive deficits and simply add to our pile of debt?

      Do you think that the debt markets will price further debt as kindly as they have in past issuances? I mean we are a small one pillar economy.

      And if the Unions don’t like the budget then why don’t they come up with a reasonable alternative. As far as I am concerned the Unions simply look out for their own members (see latest HP action for confirmation) and don’t really think about how Bermuda is affected. That is their right, but it is not right for all of us.

    • Tired of it all says:

      I remember not too long ago, while in Opposition, Mr. Richards stated that the economy was over heating with the bubble about to burst. The response from one PLP MP was that he would much rather have a over heating economy as opposed to a luke warm economy. He ended his reply with that Mr. Richards was simply scare mongering. Just like many have and you just did.

      History does tend to repeat itself. Let’s hope that isn’t the case in this instance or we will all go down with the ship.

    • Build a Better Bermuda says:

      Your response strikes me as you being someone who pays off their credit card with another credit card and thinks that is an excellent long term strategy. Mr. Ball recognizes something, the OBA is trying to avoid layoffs in the civil service, he knows the government finances is teetering and that a stable government/business relationship will improve the coffers and help protect his memberships jobs. As business improves in Bermuda, it will also trickle back down to Bermuda’s small businesses with the services they hire.

    • inna says:

      and what makes you so credited to give us this reassurance that we are “fine to pay off our bills”?

    • WillSee says:

      @VFM, the way we were headed, our dollars would be worth pennies to the us dollar.
      No scare tactics, he’s telling the truth.

  5. Politically Incorrect says:

    At least somewhat gratifying that even Ed Balls recognizes that IMF intervention is a distinct possibility.