Business leaders want more shared sacrifice
Government will save an estimated $25 million this year by freezing most vacant Government jobs, Finance Minister Bob Richards yesterday told a post-Budget Chamber of Commerce meeting.
And he said that Government planned to introduce measures to make the Civil Service more accountable — including an oversight body to help control “hiring and firing”.
Chamber of Commerce members said that the size of the Civil Service was still a problem — and that the private sector had carried most of the economic pain of the recession.
Mr Richards said: “The objective of trying to have an ultimate board or person or set of persons responsible in particular for hiring and firing is something we are working on.”
Fellow panellist Nathan Kowalski, chief financial officer of Bermuda-based investment firm Anchor Investment Management and a columnist for The Royal Gazette, pointed out that five private sector workers were needed to support each Civil Service job.
He added: “It’s quite simple — the Civil Service is too big ... it’s not sustainable, no matter how much revenue you raise, it’s not solving the problem of accountability.”
And he added the “sheer size” of the Civil Service against a backdrop of a 20 per cent decline in the economy “makes no sense whatsoever”.
Panellist Kim White, of law firm Cox Hallett Wilkinson and a member of the SAGE Commission that drew up plans for public sector reform, said that the restaurant trade and retail, in which he is involved as chairman of AS Cooper, had warned that Budget tax increases could cost jobs.
Mr White added that dealing with the Island’s massive $2 billion-plus debt should be shared more by the public sector.
He said: “The pain has fallen mostly on the private sector ... we should not be continually asked to pay to feed the beast.”
Mr Kowalski suggested that the “top half” of the Civil Service, the highest earners, could be targeted for pay cuts, while lower paid workers could be spared cuts.
He said: “I think we need to again show this shared sacrifice in some way.”
Mr Kowalski added that unemployed public sector workers would be a drain on Financial Assistance — which would eat into the public purse. But he added: “We do need to get really aggressive and somewhat creative about the salaries and perks.”
Mr Richards said that many top Civil Servants carried a lot of responsibility and could command much higher salaries in the private sector.
And he added that — unlike the US — there was no option in Bermuda to move city or state for a new job if public sector workers were made redundant.
Mr Richards said: “While in theory we could engage in a slash and burn type of strategy, I don’t believe that’s appropriate for Bermuda. It’s not appropriate and it’s not practical either.”
But he ruled out a commission similar to SAGE to look at ways of boosting revenue. “We are certainly looking at various options,” he said.
Areas at present run by Government — like the registry of aircraft — could be hived off to non-Governmental organisations, he added, although international standards meant that sort of activity could not be privatised.
Around 350 people attended the breakfast meeting at Pier 6 in Hamilton, sponsored by financial services firm PwC and moderated by PwC chief Arthur Wightman.
Chamber of Commerce executive director Kendaree Burgess said after the meeting: “The general feeling expressed by many members is that the private sector has been contributing its share of the shared sacrifice and would now like to see the public sector contribution increased.
“As a caveat, no one is looking for the Minister to ‘kick people to the curb’ as he put it, but the private sector are looking for a meaningful contribution.
“Our panellist Nathan Kowalski summed it up when he said that five private sector employees supported each Civil Servant.”
Mr Richards said after the meeting that the Budget had not been an “austerity” one — and that a severe financial blueprint for the year would probably have included layoffs in Government.
He added: “We haven’t raised taxes very much — it’s a half a per cent. It’s not an austerity Budget — we’ve included all these prospects for growth.”
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