Budget: Brace yourselves for cuts

  • Finance Minister Bob Richards. (Photo by David Skinner)

    Finance Minister Bob Richards. (Photo by David Skinner)

  • Finance Minister Bob Richards (Photo by Akil Simmons)

    Finance Minister Bob Richards (Photo by Akil Simmons)

  • (Photo by David Skinner) ¬ Borrowing time: Minister of Finance Bob Richards yesterday said Government is seeking to borrow up to $800 million to cover budget deficits over the next three years. Government wants to take advantage of favourable market conditions now to lock in potential borrow cost savings of between $20 million and $40 million. ¬

    (Photo by David Skinner) ¬ Borrowing time: Minister of Finance Bob Richards yesterday said Government is seeking to borrow up to $800 million to cover budget deficits over the next three years. Government wants to take advantage of favourable market conditions now to lock in potential borrow cost savings of between $20 million and $40 million. ¬


An austere 2015-16 Budget, heavy on savings measures, can be expected this morning from Finance Minister Bob Richards.

Mr Richards told The Royal Gazette that his Budget speech would include material from the Spending and Government Savings (SAGE) Commission, although he declined to specify.

Union leaders have conceded spending will need to be cut in the Budget, but have made it clear that they hope cuts will be balanced with ideas to increase revenue.

A rise in “sin” taxes is one possibility. Describing himself as a pragmatist, Anthony Santucci of the Centre for Alcohol Abuse and Drug Prevention said he hoped to see “a 10 per cent tax on the sale of alcohol, which would be used to fund both the roadside sobriety testing and the support agencies such as PRIDE and Focus”.

Bermuda Industrial Union president Chris Furbert said that Government could claw back some cash by abolishing tax concessions in the construction, retail and hotel sector.

But business heads have sounded the alarm over rolling back some concessions. According to the Chamber of Commerce, jobs will be the casualty if payroll tax breaks are taken away for retailers and restaurateurs.

The Bermuda Hotel Association took a similar line on preserving concessions for an industry that was once a pillar of the Island’s economy.

For the civil service, the Bermuda Trade Union Congress has proposed a raft of initiatives, including voluntary early retirement incentive plan, restrictions on overtime, hiring freezes and removal of funds for vacant posts.

Unions agree that cutbacks in the civil service should be left to natural attrition.

Asked for his hopes for today’s Budget, David Burt, Shadow Minister for Finance, said his priorities remained much the same as those put forward by the Opposition a year ago.

The Progressive Labour Party has repeatedly called for economic diversification, and roundly opposes outsourcing and aggressive cuts.

Mr Burt said that pension funds invested overseas could be used to fund the start-up of new businesses, as well as “investing in companies that can bring jobs to our shores in new industries — tech and healthcare, to name a few”.

Whatever cuts are declared today, the Bermuda Tourism Authority has vowed that 2015 is the make-or-break year, pointing out that tourism’s budget is comparatively low.

Many who spoke with The Royal Gazette agreed that the Finance Minister’s position was an unenviable one.

Seniors advocates hold out little hope for a pensions raise, while Becky Ausenda, executive director of the Bermuda Education Network has implored Government to make literacy a priority.

The possibly merging of some schools is much anticipated, with the Bermuda Union of Teachers signalling its support for the move, given the drop in the Island’s population. In any event, all eyes will be on Mr Richards when he arrives at the House of Assembly at 9.30am with the Budget in his briefcase. The Progressive Labour Party’s response is set for February 27.

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Published Feb 20, 2015 at 8:00 am (Updated Feb 20, 2015 at 11:42 am)

Budget: Brace yourselves for cuts

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