Live: Budget Day
The 2019-20 Budget Statement is under way.
Curtis Dickinson, Minister of Finance, is making his maiden Budget presentation in the House of Assembly.
The Royal Gazette is providing a live stream and text updates on this page, as well as Twitter updates and a stream on our Facebook page.
Full reaction and analysis will feature on our website later today and in the newspaper tomorrow.
The speech is broadcasting live on CITV, via the Government portal www.gov.bm and on the Bermuda Government’s Facebook page.
A copy of the budget statement will be available on the Government portal once Mr Dickinson has finished reading it.
• A bill will be tabled to provide for the long-awaited marina in St George’s.
• Liquor Licensing Authority will be improved and modernised.
• The Ministry of Legal Affairs intends to “move from a standard of limited decriminalisation of cannabis to establishing a robust licensing regime that will create a comprehensive framework embracing the science of cannabis use for medicinal purposes”.
• The Bermuda Tourism Authority will have a reduction in its government grant from $26 million to $22.5 million. Its overall budget will increase from $31 million to $35.9 million due to the introduction of new visitor fees charged to cruise passengers and visitors taking advantage of vacation rental properties.
• Pensions will be increased for seniors by the rate of inflation every year.
• A $500,000 grant to the Gaming Commission will help cover its operations. The Commission will seek external financing with local institution to cover its other operational costs.
• $4.8 million budgeted to support sporting bodies, youth organisations, apprenticeships, scholarships, arts and community and cultural events.
• $400,000 increase in the grant to the national stadium trustees due to increased running costs.
• $32.59 million is budgeted for capital development, $3.18 million in capital acquestions and $73.45 million in operations. This will include repairing bridges, Tynes Bay maintenance, refurbishing King’s Wharf and other ferry docks, upgrading water infrastructure and extensively resurfacing all main roads.
• $129,500 will support the implementation of the City and Guilds programme at senior school level. Maths programme will be progressed further; a virtual job shadowing programme will be launched.
• $539,000 will be set aside to incrase the bandwidth for primary and middle schools.
• $473,000 will be spent implementing the standards-based grading system.
• $770,000 will be spent at primary school level on: STEAM development, training for teachers, social studies development, literacy programme development.
• $327,000 will support preschool projects: new Autism Spectrum Disorder programme, foreign languages, programmes to educate parents and an early childhood quality assurance officer.
• $2.8 million will be allocated to Plan 2022 and the introduction of a merit-based “College Promise” programme for public school graduates to attend Bermuda College.
• Capital expenditure budget is set at $64.7 million, an increase of $2.5 million on last year. Cash will be spent on upgrades to the Mid-Atlantic Wellness Institute, schools’ maintenance and road works. $20.6 million will be provided for IT developments across Government, new public buses and other vehicles top support public service delivery.
• The Sinking Fund has a balance of $214 million. During the new fiscal year, $180 million of it will be used to repay two tranches of maturing private placement notes.
• Debt services are projected at $116.5 million, which represents interest expenses on debt only.
• Company discontinuance fees will be increased from $425.
• A new tax structure will be introduced for cruise ships and cruise ship passengers: a passenger departure tax, a cruise passenger visitor fee and a large ship infrastructure tax. The cabin passenger tax will be repealed.
• Stamp duty will be increased on all residential and commercial leases.
• Land tax increases will yield $85.4 million. Senior exemptions will remain for all properties with an ARV of $45,000 or less. The rate for ARV Bands 1 and 2 will be zero, the rate for Bands 5, 6 and 7 will all increase.
• Foreign currency purchase tax will be incrased from 1 per cent to 1.25 per cent, to yield $4.1 million.
• Financial service tax increases will yield an extra $3.4 million.
• Zero rate of customs duty to be continued on capital goods imported for hotel refurbishments and renovations.
• Duty on cigarettes, tobacco, beer, wines and spirits will be raised to achieve an extra $1.5 to $2 million.
• Sugar tax will be extended to more items to yield an extra $4 to $5 million of customs duty.
• Employer payroll tax will be removed for three years for businesses that hire local musicians and entertainers.
• Targeted payroll tax relief will be provided for specific businesses in the form of a concessionary employer payroll tax rate of 7 per cent for fashion, shoes, jewellery and perfume retailers whose payroll is above $500,000.
• Government will promote relief for exempted companies as part of its Economic Substance Incentives Programme. It will provide a two-year employer payroll tax conccession for additional jobs created in Bermuda.
• The Tax Reform Commission proposed payroll tax recommendations, but “due to uncertainties it is proposed to leave most rates unchanged”.
• Government will draw from the Sinking Fund to repay private placement notes.
• “In keeping with our pledge from last year, we expect that this year we will start reducing our debt”
• Government does not anticipate any long-term borrowing in this fiscal year.
• Current account balance, after interest, is budgeted to come in at a surplus of $72.1 million.
• For the 2019-20 Budget, there will be a 0.4 per cent decrease in total expentiture of $4.3 million.
• Gross public debt will stand at $2.68 billion and net debt will stand at $2.465 billion on March 31.
• Projected operating expenses for 2018-19 are $932 million, $2.8 million higher than budgeted.
• Government is forecast to earn $1.079 billion in revenue in 2018-19. This is $11.9 million less than the original estimates.
• Government will publish guidelines for the granting of exemptions from the 60:40 rule.
• The Bermuda First think tank will identify and eliminate antiquated regulations that make Bermuda’s economy uncompetitive and serve as a barrier for entrepreneurs.
• Mr Dickinson refers to the “modernisation of the 60:40 rule” and relaxation of heigh and ownership restrictions for development in the Northeast Hamilton Empowerment Zone, and changes to allow international law firms to enter the Bermuda market.
• A public service reform initiative will transform Bermuda’s public services. Top level of public service will be reorganised to create a “dedicated implementation team”.
• Government will suspend its mandatory annual contribution to the Sinking Fund.
• Mr Dickinson begins his 57-page speech by summarising Bermuda’s economic challenges, including US tax reform, Brexit and the ageing population.
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