Column: Govt’s “Half-Time” Financial Report

[Opinion column written by Larry Burchall]

This is the 130th week-in-power for this Administration. It is the halfway mark in a five year, 260 week term that must, for all practical purposes, end by December 18th 2017.

What has been achieved since kick-off on December 18th 2012?

[All the observations refer to matters that are specifically in the actual control of or are directly influenced by the Government.]

National Debt and directly related

Gross National Debt – At half-time, at $2.185bn, National Debt is higher than the $1.574bn of December 2012. It will go higher to $2.310bn in 2015/16. Projected to be even higher than $2.310bn by 2017/18.

Nanci [Interest expense + Sinking Fund contribution] – Was $112m in 2012. At half-time it is $169.9m, costing $465,480 per day. Projected to rise to $184.4m and costing $505,205 per day by FY 2017/18.

Overall spending pattern – Government spending is still outstripping Government revenue by a large amount – $299.9m in 2014/15 and $220.0m in 2015/16 – thus continuing the major overspending pattern that commenced twelve years ago in FY 2003/04.

$800m Plan of August/December 2013 – In February 2015 the Minister for Finance indicated that the plan to borrow and use $800m to bring Government finances under control by 2017/18 has failed. Fourteen months after completing the $800m borrow, the Minister indicated that the $800m had run through his fingers so fast that “…the money we borrowed at that time is running out. We have about $95 million left which is projected to run out later this year. Therefore we anticipate further government borrowing in 2015.”

Employment generally

Bermudian employment – Department of Statistics [DoS] figures show 25,132 Bermudians filling jobs in 2012; 24,504 in 2013. No figures released yet for 2014 or 2015. So 1,132 fewer Bermudians filling jobs over the 2012 – 2013 period shown by DoS records. Probably showing around 1,500 [or higher] when 2014 figures cease being with-held.

Bermudian unemployment – The admittedly imperfect Labour Force Surveys report unemployment growing from 3,305 in 2012, falling [?] to 2,569 [?] in 2013, then rising again to 3,486 in 2014. No figures yet for 2015, but DoS records show an increase in unemployment for the period 2012 – 2014.

Jobs overall – Since December 2012, job losses amongst Bermudian and non-Bermudian workers have continued. Overall, the DoS reports 35,443 filled jobs in 2012; 34,277 in 2013; and 33,487 in 2014. No figures yet for 2015, but an overall loss of 1,956 filled jobs for the period 2012 – 2014 as shown by DoS records.

National Decisions taken by Government

Women’s health – Initial Government decision was to reduce the opportunity for women to have annual mammograms covered by their insurance policies. Decision overturned after a major, largely non-political, protest that was mounted by a wide cross-section of Bermudian women.

Closing the Recycling Centre – Initial decision was to close the Centre. Decision overturned after public outcry.

Lamb Foggo Urgent Care Centre – Initial decision was to close the East End facility. Decision overturned after public outcry and protest.

Referendum on gambling – Government’s initial decision and promise was to have a national Referendum on Gambling. Government refused to hold a referendum despite protests and outcry from within the community.

Re-commence granting of Bermuda Status to some PRC’s – After uncovering a flaw in earlier legislation, the Government decision was to correct the matter by re-commencing the granting of Bermuda status to some PRC’s. Decision still stands.

Debt Ceiling – Government raised Debt Ceiling by $1.0bn, taking it from $1.5bn up to $2.5bn.

Achievements

America’s Cup – The America’s Cup race series will be staged in Bermuda between 2015 and 2017. By Government’s reckoning, this could result in up to $275m of new and additional income over the two and a half year period.

Morgan’s Point development – Government has underwritten $165m in investment guarantees to get something going at Morgan’s Point.

Gambling – Government has passed legislation to enable gambling and casinos.

BTA – Government created and established the Bermuda Tourism Authority.

Overall

Since December 2012 – Resignation of one Premier and appointment of another; a couple of minor Cabinet shuffles; civil Court cases launched against members of the Opposition.

The six year decline [2009 to 2014] in nominal GDP may be, probably is, levelling off.

At half-time, that’s the overall situation.

- Larry Burchall

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