Column: ‘Budget Was Display Of Political Spin’

February 25, 2019

Nick kempe thumb[Written by Nick Kempe, the OBA Shadow Finance Minister]

The Budget presented on Friday was a display of political spin. The feel-good presentations and the facts tell two completely different stories.

The facts are that GDP estimates for growth have been revised down by half, revenue for the present fiscal year was lower than budgeted whilst expenses were higher than budgeted. Despite this damning missing of targets, Government felt it appropriate to forgo the rainy day fund contribution of $65m to the sinking fund in order to project false strength and present a “balanced” budget.

The reality is that last year the Government missed its budget projections by $15m, so what faith should Bermuda have that it can hit such a narrow target set for next fiscal year of a mere $7m surplus? There is no track record to support the confidence they have showed in simply skipping the Sinking Fund Contribution of $65m. It’s like not paying your bills and telling everyone you’re rich.

Despite attempts to distance themselves from the “tax and spend” label, the actions show that to be the case:

  • The Budget boasted no new taxes of $50m, yet raised existing ones by $39M.
  • The Budget celebrated backtracking on the residential rental tax, but then went and raised land tax. A land tax increase that actually raises the burden on the lowest bands of ARV. The rental tax at least exempted people that live in their own homes. The land tax as presented provides no such relief.
  • Payroll tax exemptions were provided to IB and only the largest retailers. Where is the relief for small businesses struggling to survive?
  • Foreign exchange tax was raised, which unfairly targets Bermudians primarily that earn their salaries in Bermuda dollars and does not affect primarily guest workers earning US dollars in IB.
  • Foreign exchange tax also drives up the cost of living as it has made everything imported to Bermuda more expensive.
  • Charge backs on card payments of Government fees make it more expensive for everything from TCD licensing to Customs Duty. Unfortunately, credit card agreements do not allow businesses to charge back those same fees to their customers.

And yet, despite the increases to the tax burden for Bermudians, the Government has taken no steps to decrease its own spending. People are having to deal with once a week trash collections, but are not seeing the benefits of such austerity. A lot of talk about “efficiency” and “reform”, but no results. Speaking of no results, even FinTech was barely a passing comment in the Budget.

Despite having no money, apparently Government is proposing to use the taxes paid by all Bermudians to subsidise mortgages exclusively for civil servants. There is no mention where this money will come from though or any idea of the cost.

The Budget all but dismisses the one economic truth that matters: Bermuda needs more people on-island working and spending money. What the retail sector really needs is more consumers and more revenue, not tax breaks for the select few.

This budget seemed to be a holding pattern budget. The status quo was maintained and in many cases worsened, while this Government holds its breath in the hope that something other than their lack of results will change our fates.

Quo Fata Ferunt.

- Nick Kempe


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Comments (18)

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  1. bingo says:

    ‘Bermuda needs more people on-island working and spending money.’ The one thing we need, the one thing we wont get.

    Lets continue to slowly close off an economy thats completely dependent on inflows of funds from other jurisdictions. Maybe we will get by on our abundance of natural resources and IP.

    • Black Beard says:

      Kemp allow me to tell you this. Yes the people listen but the OBA will never win with Craig as your leader. The PEOPLE that you need to swing back and you know who the PEOPLE are dont trust CRAIG TRUMP.

      • Anbu says:

        But they trust david trump. Again. THERE ARE NO SWING VOTERS IN BERMUDA. U either vote plp or u dont vote. Lets be real here.

  2. Bs says:

    “ it’s like not paying your bills and telling everyone you’re rich “.
    The flip side is borrowing money to put in the sinking fund . That’s like loading up one credit card to pay off another.
    The problem is we are spending to much and neither party want to face up to that fact and make the tough decision that are needed for fear of not being elected and the average man will continue to take licks .

  3. sandgrownan says:

    “Despite having no money, apparently Government is proposing to use the taxes paid by all Bermudians to subsidise mortgages exclusively for civil servants”

    It’s a shameless ploy to buy votes. Nothing more.

    • Mich says:

      People like you are the reason people like me dont swing back to the obaubp.Your blog is pure whitewash.

      • sandgrownan says:

        You’d vote against your self interest because of me? Then you are more stupid than I thought.

      • Anbu says:

        U never voted oba. Please stop the lies.

    • Toodle-oo says:

      Free breakfasts , free lunches , free dinners , free turkeys and payouts to people who were conned into breaking the law. Some people can be bought very cheaply by the look of it.

  4. Low Class says:

    My Land tax used to be around 100$. I was happy to hear it would drop to 0. But wait, now its actually gone up to 300$, what a spin on that delivery!!! a 200% increase on the lower class of home owners/apartment owners.

  5. Your OWN interest is a stake??
    It would appear that that is YOUR focus.
    For you and your group ONLY.Sheer selfishness.
    The P.L.P. is not the O.B.A., repeatedly imposing its selfishness onto BORN BERMUDIANS in favour of the CANADIANS/AMERICANS who have come here and want laws imposed on the populous ….born Bermudians to suit their own desires and wants.
    Sooo Kempe, grab an available ticket and do get in line.
    No room for your selfishness!!

    • Double S says:

      Can’t wait for the FCPT hike to kick in and listen to you moan about increasing food prices.

    • 2 Bermudas says:

      Someone had too much titty milk over the weekend, I see… Hahahaha!!

    • sandgrownan says:

      oh, you get out of bed the wrong side today?

      You’re being particularly rabid with the racism today, even by your standards. Don’t you like facts being pointed out?

      Did Curtis tell those schoolkids on Friday that they’ll be responsible for the PLP debt?

    • The real Terry says:

      Hey STRAIGHTFORWARD Mr. Kempe is 10 times the BORN BERMUDIAN that you are. With you racial bigotry you are less Bermudian than Drebs Uighurs

      • mixitup says:

        All of a sudden Born Bermudians matter?….So if I’m 9x’s a Bermudian then I’m less Bermudian than Kempe? Weren’t you the same bunch preaching something else the other day, sorry I can’t keep up with the Bull.

    • Anbu says:

      How bout u get in line. U dont belong here anyway. Move on back to your motherland. U dont seem to like ours very much. Ill buy your ticket for u. First class even

  6. Warlord2 says:

    Um um Straightforward look up at the comment above you that is a born Bermudian complaining about
    your party ya numty