Fiscal Responsibility Panel Annual Assessment
Over the next two to three years there should be an introduction of a tax on dividend and interest receipts, an annual rental tax on owners of large properties and multiple units [thus exempting all but high earners], an increase in taxes on sugar and other unhealthy products, and a carbon tax.
This were some of the suggestions contained in the Bermuda Fiscal Responsibility Panel’s 2020 Annual Assessment, which was recently released.
“The Government will need to impose a tight budgetary regime in 2021-22; an across the board cut in most major spending Departments and agencies is both justified and necessary,” the document said.
“The aftermath of the COVID-19 crisis make them more necessary than ever and the Government’s strong showing in the recent election provides it with an unprecedented window of opportunity to act.
“Our previous reports have highlighted what Bermuda’s leaders have long recognised as serious concerns affecting Bermuda’s fiscal and economic position.
“These include a population that is shrinking and ageing, with fewer workers and far more elderly, many with chronic and debilitating health problems; reliance on a highly competitive and sought after international business sector for much of its economic output; a social insurance system that continues to accumulate significant unfunded liabilities which add to Bermuda’s potential public debt; a tax system that heavily burdens its working population relative to those with income from assets; and its island economy increasingly at risk from the multiple hazards of climate change.
“We paint a stark picture of Bermuda’s fiscal challenges, but one that is shared and recognized by the Government itself. In mid-November, the Minister of Finance characterised the deficit as “not only unsustainable but economically and financially imprudent.” He underscored the risks, and that dealing with the deficit “will require some sacrifice from all sectors of [the Bermudian] community.”
“In the next two years, even under the more optimistic scenarios described above, Bermuda’s fiscal path will be very narrow, with its financial scope limited both by the size of the debt maturing in 2023-24 and the speed with which its financial cushion in the Sinking Fund will be drawn down by fiscal deficits, with nothing left for contingencies.”
The full Fiscal Responsibility Panel Annual Assessment follows below [PDF here]:
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The PLP own this, all of it. Failures. 20 years of incompetence and failure.
Would appear that we are 20 years too late to use the term “fiscal responsibility”.
Why is the government always looking at ways to tax more! Why not look at where they waste and how we can save so that we can do more with less.
For example: STOP WASTING MONEY ON ALL THESE USELESS COMMISSIONS, STUDIES AND REPORTS! Especially, since you rarely act on any of them.
Your telling me that as THE GOVERNEMENT you couldn’t all come together, and come up with these ideas? You are not capable of coming up with anything more creative than this?
LEAD, FOLLOW or GET OUT OF THE WAY! STOP MAKING UP ALL PAY FOR YOUR SCREW UPS!
Its a bleak picture of decades of PLP over-spending.
Covet International Business, its all we’ve got.
Cut the bloated civil service by not replacing those who retire.
Just what we don’t need . Already one of the most expensive places on earth due to taxes and they want to impose more and raise existing ones .
For a fiscal responsibility panel they sound pretty inept.
Where’s the recommendations to grow the economy and drastically trim government expenses ?
“For a fiscal responsibility panel they sound pretty inept.”
No, they simply have a perspective which informs their opinions. Look at who appointed them.
Did you really think a PLP government would appoint a bunch of Hawks to a fiscal responsibility panel?
It is beginning to look like experts and commissions should give us what we want to hear. This one is preparing for the future but it simply won’t happen. So why bother having them. There are lots of areas where there could be savings but it ain’t gonna happen. They will leave it to the next generation.
I would call this fiscal irresponsibility. You cannot grow an economy by taxing it out of existence.
What happened to cannabis legalization? That would actually provide a new source of revenue.
We cannot afford the PLP and all their spending on themselves.
Definition of fiscal responsibility: For government institutions fiscal responsibility describes the ability to balance between government spending and tax.
“The Government will need to impose a tight budgetary regime in 2021-22; an across the board cut in most major spending Departments and agencies is both justified and necessary,” the document said.
Once that exercise has been mapped, they will know better what level of new tax, if any, will be needed. Transparency of that stage would also be necessary.
The fact that the PLP government has no plan for recovery means we are in a economic death spiral. If the government is waiting for tourism to recover, we are doomed. Tourism will not be back in 2021 in any meaningful way so how long does the government plan to pay people for doing nothing? Running busses with 17 people is not sustainable. Paying immigration officers when no one is coming to Bermuda is not sustainable. The same follows with stimulus checks to hotel, bar and restaurant workers. Not sustainable. Instead of the endless, insufferably boring news conferences on COVID, the government should be helping us figure out ways to minimize spending and how to redeploy workers to perform needed functions. If this does not start soon, we will find the overseas lenders will find us high risk and turn the money tap off. We are in debt for the next 50 years and adding to the mountain.
The kicker is the PLP think they have the answers because the have a major advantage in the House. Truth is – this was an election based in COVID success, not the economy.
Tangible, Achievable Cuts:
Stop Acting pay immediately except in vacant posts
Cut ALL budgets by 30% including QUANGOS
Stop ALL travel
Park ALL government cars for 6 months
Cut ALL salaries/wages by 5% for 6 months.