‘Promises will have to be broken’ SAGE
The commission set up to examine ways in which Government can slash costs claims that pension and healthcare costs are “unsustainable in their current form”.
The Savings and Government Efficiency Commission also claims there is “a lack of accountability in the management of employees in government service which has created a culture that inhibits innovation, creativity and leadership”.
And it recommends that Government introduces an immediate hiring freeze — despite the fact that there are 548 vacant posts within the Civil Service.
The commission calculates that such a move could save Government $40 million.
The commission was set up in April and given six months to explore ways in which the new Government could reduce inefficiency and cut down on expenditure.
Releasing its interim report at a press conference yesterday, SAGE chairman Brian Duperreault said: “Early on in our process, we began to get a good sense of what’s working and what isn’t working in our Government.
“As we became more deeply involved in information gathering and fact-finding, we’ve been able to analyse and collect data that validated those early indications.”
SAGE said that efficiency improvements could be made through “improved central management of key strategic functions, information systems and human resources”.
“Core functions such as real estate could be centralised, the multiple human resource management and information systems that stem from the Civil Service and the Public Service could be integrated,” Mr Duperreault said.
Among the commission’s six recommendations, Mr Duperreault said that a plan was needed to collect all outstanding Government debt — believed to run into hundreds of millions of dollars.
And he warned that “promises will have to be broken” if younger people are to have any hope of receiving a pension when they eventually retire. The total unfunded liability for three pension funds currently stands at $2.9 billion.
“In the case of pensions, promises will have to be broken if the young people coming up behind us are going to have any hope of receiving a pension when they retire,” Mr Duperreault said.
“Currently, anyone aged 37 and younger won’t get a pension when he or she retires at age 65.
“Our healthcare system is simply unsustainable. Government can’t afford to continue to subsidise it, so we’re looking at costs tripling in the next eight years — and those costs are going to fall on the shoulders of every person in Bermuda. The Bermuda Health Council estimates $26,000 in total healthcare costs per person by 2021.”
Mr Duperreault said that the commission’s work was hampered by the fact that it was unable to obtain basic information on staffing levels within the public sector or the value of Government’s assets.
“Until a cross-Ministry committee prepares a comprehensive asset management plan for all Government assets to ensure that existing Government-owned or leased assets are effectively and fully utilised, there should be no new spending for capital or development projects, and no new leases for new or replacement accommodation or renewal of leases,” he said.
He also recommended that another commission be set up to examine job and revenue creation, arguing that “we can’t cut our way to recovery — we have to find ways to grow our economy”.
“There is still a lot of work to do before we submit our final report in October,” Mr Duperreault said.
Several more interviews to conduct, comparative analyses to complete and additional consultation to invite. We will also continue to educate the public about the challenges and opportunities facing us.
“Our final report will offer a blueprint for the government the Island needs and can afford, and recommendations for how to achieve that goal. ”
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