Premier On Government’s Fiscal Performance
Premier and Minister of Finance David Burt provided an update on the Government’s fiscal performance in the House of Assembly today [Sept 27].
The Premier’s full statement follows below:
Mr. Speaker, following my statement last week where I announced a $25 million investment package focused primarily on social and community programmes, I rise today to provide this Honourable House an update on the Government’s fiscal performance.
Mr. Speaker, we will debate that investment package later today; however, it is important that this Honourable House and the people of Bermuda understand the context by which that investment can be funded. This Government has, since it was elected in 2017, been focused on fiscal responsibility, which has led Bermuda to a balanced budget, despite the hand we were dealt with bad deals inherited by the former Government which cost Bermuda’s taxpayers $250 million. Notwithstanding, we steered our island through a once-in-a-century pandemic and have successfully implemented Bermuda’s Economic Recovery Plan, which has seen economic growth accelerate, combined with low unemployment rates not seen in Bermuda since the 1980s.
This strong economic and employment growth, combined with payroll tax reform that reduced payroll taxes on workers to the lowest level in history—while providing a tax cut to 86% of workers and every local business—has benefited the public purse.
Mr. Speaker, before I give an update on the current fiscal year 2024/25, I wish to share the updated fiscal results from last fiscal year 2023/24.
Mr. Speaker, based on the work to date on the 2023/24 Consolidated Fund Financial Statements as the Ministry of Finance prepares to submit these statements for the annual audit, I can share the following good news of the Government’s improving fiscal picture.
- Government revenues are now projected to be $1.19 billion, $31.4 million [2.7%] above the original estimate of $1.15 billion. This increase in revenue is due to better-than-expected payroll tax receipts.
- Current Account Expenditures are now projected to be $980 million, $7.3 million [0.8%] above the original estimate of $972.6 million. This was achieved despite unbudgeted items such as $16.3 million to support the hospital and negotiated pay awards for public officers & teachers.
- Capital account expenditures are projected to be $98.2 million, $2.2 million above the original estimate of $96 million. These expenditures include a $2.9 million deposit for the purchase of two new ferries, $6.1 million for new electric buses, $8.3 million for stabilization works at Tynes Bay Waste Facility, $4.8 million for a new Asphalt Plant, and $4.3 million in grant funding to the Bermuda Housing Corporation to provide more affordable housing.
- Interest and Guarantee Management costs are projected to be $130.6 million, a minor increase above the original estimate of $130.4 million. Guarantee management fees totaled $1.3 million in 2023/24. The decrease in interest costs is directly related to the repayment of $50 million of Government debt in December 2023.
Mr. Speaker, because of this Government’s prudent management and economic stewardship, the 2023/24 budget deficit is now projected to be $21.8 million, $21.7 million or 50% less than the original estimate of $43.5 million. The figures that I just mentioned highlight the result of the successful execution of Bermuda’s Economy Recovery Plan, which has seen Government revenues increase, economic growth that has exceeded expectations, and continued strong growth in international business.
Mr. Speaker, I will now speak to the current fiscal year 2024/25. Last Friday, I tabled a supplementary estimate in this Honourable House. The key areas of the supplementary estimate focused on social investment—include investment in public safety, enhancing support for mental health and community services, additional resources for educators and social workers, and investing in additional care options for our seniors. This investment package totals $25 million for the 2024/25 budget year.
Mr. Speaker, based on the performance over the first five months of the Fiscal Year, I will now share the updated projections for the Consolidated Fund:
- Government revenues are now projected to be $1.26 billion, $30 million [2.3%] above the original estimate of $1.23 billion. The projected revenue figure represents continued economic recovery, evidenced by increases in Payroll Tax and tourism-related revenues, and takes into account a $10 million reduction in expected customs duty due to the 60% cut in energy taxes to reduce the impact of energy price hikes.
- Current Account Expenditures are now projected to be $1 billion, $17.6 million [1.8%] above the original estimate of $992 million. This increase is solely due to the additional investments contained in the supplemental investment package announced last week.
- Capital account expenditures are now projected to be $119.8 million, $7.3 million above the original estimate of $112.3 million. The additional expenditures include investments in infrastructure, public safety, community spaces, and phase one of a seniors’ day-care facility—which are part of the supplementary investment package.
- Interest and Guarantee Management costs are projected to remain on budget at $127.8 million.
Mr. Speaker, in February in this Honourable House, this Government tabled a budget that was projected to deliver Bermuda’s first balanced budget in 21 years. Today, I am humbled to announce that despite a $10 million reduction in energy taxes to assist Bermudians, combined with a $25 million additional investment package focused on social investments—this Government is not just on track to deliver a balanced budget this year. The most recent estimates from the Ministry of Finance indicate that the budget surplus is now projected to increase to $4 million!
Mr. Speaker, please let me recap. This PLP Government cut payroll taxes for 86% of Bermuda’s workers and every local business—a move opposed by the One Bermuda Alliance. This PLP Government cut energy taxes by 60% after the former OBA Government doubled energy taxes on hardworking Bermudians. This PLP Government has advanced the largest single increase in social investment in 20 years while the OBA speaks about reducing government spending, which will negatively impact young people, hurt working-class families, and reduce support for the vulnerable and our seniors. And, Mr. Speaker, despite the naysayers, both inside and outside of this Honourable House, this PLP Government will deliver Bermuda’s first Budget surplus in 21 years!
Mr. Speaker, the financial record is clear for all Bermudians to see. There is only one party in this Honourable House that has delivered tax fairness for workers; there is only one party that has reduced taxes on essential goods and energy; and there is only one party that is rebuilding Bermuda with Bermudians at heart—and I may add, Mr. Speaker—with a Budget Surplus. And that party is this Bermuda Progressive Labour Party Government!
Thank you, Mr. Speaker.
