The OBA’s economic plans

  • Andrew Simons, One Bermuda Alliance candidate.

    Andrew Simons, One Bermuda Alliance candidate.

As the One Bermuda Alliance candidate for Pembroke Central, I have spent the past three months listening to people’s concerns and answering their questions. Walton Brown wrote an article last week asking for more details on “what the OBA would do if elected”. I will highlight four of the 30 initiatives presented in our formal Reply to the Budget that was published in full by all the major news outlets in March. In turn, I will address Mr Brown’s suggestions that the OBA “focuses on a balance sheet more than human misery” and the PLP’s record demonstrates a commitment to caring for the most vulnerable.

The One Bermuda Alliance will use its talent and experience to stabilise the island’s fractured economy while working towards a society of social and economic equity. Sound policies, which have been thought through first, will encourage growth. We talk about the country’s balance sheet because only strong government finances create the necessary environment to deliver jobs; don’t forget that almost 3,000 people can’t find work on our Island. Good government requires competence and compassion.

The OBA will stimulate hiring and encourage businesses to grow by granting any employer a two-year payroll tax exemption for new Bermudian hiring and by cutting employee payroll taxes for workers earning less than $50,000 a year.

The OBA will increase the Island’s intellectual capital by establishing an international Risk Institute that leverages the existence of Bermuda-based management executives and connects with an established risk management university.

The OBA will make sure Bermuda is competitive by supporting investment industry players who bring new investment firms here, not for tax reasons, but for regulatory reasons.

The OBA will allow the approval of immigration permits at the company incorporation stage so businesses can get off the ground sooner.

However, progress is not assured by a mere list. To move forward, ministers must make sensible decisions in a transparent way about promised initiatives and unknown challenges. There is so much that we don’t know. The Auditor General expressed “grave concern” in her most recent report, published in December 2010, about “the deplorable and unacceptable state of accounting and reporting of the Government’s pension funds.” The Contributory Pension Fund, to which every worker and employer contributes, has not issued audited financial statements since 2005. The OBA offers good judgment and management skill in times of uncertainty.

Times are tough and people feel it keenly. Folks will continue to disagree about the extent to which the PLP Government is responsible for Bermuda’s downturn as external and internal factors do affect the island. However, let us focus on spending priorities, a factor that the government should control.

A windfall of revenue from the international business sector early in the decade gave the PLP Government an opportunity to address social inequality from a place of strength. Despite good intentions, the opportunity was squandered. Two random and unprecedented events, the 9/11 attacks and Hurricane Katrina, radically changed perceptions of risk and prices paid for insurance. A boom of exempted insurance company formation stimulated economic activity in all areas of the Island’s economy and provided unexpected revenue for the Government. Government revenue exceeded initial estimates by $62 million at the end of the first full financial year following 9/11 (FY 2003), and $48 million following Hurricane Katrina (FY 2007). Over the decade, this windfall totaled hundreds of millions of dollars.

Even with this windfall, we saw only a limited expansion of social programmes focused on the most vulnerable. Despite the political ads, DayCare, FutureCare, the Economic Empowerment Zones, and job training add up to no more than $14 million of spending each year. Furthermore, in the midst of the downturn, we have seen tough limits placed on access to DayCare and harsh cuts to the very charities that are integral to our social safety net. Teen Services closed its continuation school for pregnant teens after losing $180,000 of government funding. The Sunshine League closed its residential foster care programme for want of the $100,000 in funding cut by the government.

Mr Brown asks whether the OBA would have built the Berkeley project. The answer is yes, but the OBA would never have allowed the cost to spiral upwards from $68 million to $130 million. Why? The PLP Minister (himself a Berkeleyite) refused to take the advice of his senior civil servants, and insisted on using an untried small contractor, dooming the project from the start. OBA ministers would respect the judgment of civil servants.

As a fellow Berkeleyite, Mr Brown must share my dismay in the $50 million not directed to the most vulnerable in our community. And the Berkeley project is not a one-off. More recently, the Auditor General criticised Government’s management of the TCD headquarters project, citing “a lack of accountability and a general disregard for established policies and procedures in the use of public funds.” The original budget for this project was $5 million; the final cost was $15 million.

People now see, hear, and feel a Government reacting to events as they appear in the news. The solutions it offers are Band-Aids: poorly thought out and poorly funded temporary measures that will not stave off the crisis we face.

The One Bermuda Alliance can face down the challenges. We can manage taxpayers’ money well; rebuild our infrastructure; lift up the most vulnerable and collaborate with the civil service and partners outside of government to support the good work they do. We will finish the work we start, getting even the finest details right.

Andrew Simons is the One Bermuda Alliance Candidate for Pembroke Central

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