This is the seventh in an eight-part series that takes an incisive look at the Bermuda economy, historically from our humble beginnings to the 21st century and the challenges faced by the Progressive Labour Party government

Command Paper No 7093 came about as a result of a petition delivered to the British Government in 1946 by E.F. Gordon. Of the many complaints contained in the petition, one of them was the method of taxation.

Dr Gordon has since deceased but has been recognised as one of Bermuda’s National Heroes and is undoubtedly the founder of our present-day progressive organisations. Surprisingly, with all of the progress that has been made, including the coming into office of the Progressive Labour Party, there has been no effort to introduce any form of taxation that is equitable.

One of the reasons that taxation is always an unpleasant subject is because those who pay the taxes are remote from the decision-makers who spend the money. To state the principle of equity as a principle is simple. But in its implementation, there are few who support change because we are always afraid that we will come away worse off than we are now.

Everyone should contribute to the public purse according to their ability. Is there anyone who can disagree with that?

Yet we base our taxes on everything but our ability to pay. That is a situation that must change if we are ever going to have an economic system that is exemplary.

Normally, we think of the Government as being the political party in office and the Cabinet appointed by the Premier. However, in Bermuda, the Government employs 5,815 people and a little more than 2,000 are employed by government quangos. All of these people have some degree of influence on the operation of government.

The culture that develops within the government service is significant. There was a point in time when civil servants were paid less than persons in private employment because there was a trade-off in terms of job security. However, the civil servants were English and were able to get perks such as trips home, rent allowance and long holidays.

When they began to accept blacks into the Civil Service, it was only reasonable to equate what was being paid to the English. The outcome of these considerations is that today we have blacks in the Civil Service that have both job security as well as a higher pay than many in the private sector. And blacks, having fought so long to gain entry into the Civil Service, which now being employed by government also carries with it a degree of social status.

When compared with Judaic society, we note several differences. In Judaic society, public service was performed by the priests. The priests earned their income through their entitlement to a portion of the sacrifices that were made. This introduces two ideas that are not present in our system today: there is the idea of sacrifice and the idea of payment being made in the form of a gratuity.

At least one of these concepts remains present in today’s world. The United Nations Commission of Sustainable Development committed the rich nations of the world to grant 0.7 per cent of its gross national income to the poor countries. Only Luxembourg, Denmark, Sweden, Norway, the United Arab Emirates and Britain have reached this target.

Giving up something for the benefit of others ought to be an integral part of the national life of every country, and is recognised today by the United Nations, which calls upon the rich nations of the world to set aside a portion of its GNI for the benefit of those countries that are less fortunate.

That there is nothing in our national budget for aid to others does not commend us.

To summarise the issues raised:

• How can every family be empowered by owning capital?

• How can every family exercise the freedom to use their capital without losing it?

• How can taxation be made equitable?

• How can government expenditure be made relevant and officials responsive?

• Should foreign aid be a feature of government expenditure?

Apart from the generality of the previously mentioned economic issues, Bermuda is facing a recession that is reflecting itself by way of homelessness and squatters.

Under the PLP government, the very problem of inequity, which the PLP was expected to solve, has been made greater.

Under the PLP government, there has been a greater transfer of wealth and income from black to white than ever before.

In addition to the recession and transfer of wealth from black to white, Bermuda has accumulated a debt of $2.4 billion, the volume of which is unprecedented in our history.

Many Bermudians believe that the threat of the European Union to blacklist Bermuda is a crisis that the Government must solve by adhering to the demands out of Brussels.

• Arthur Hodgson is a former Cabinet minister, Rhodes scholar and graduate of Oxford University in England, where he studied philosophy, politics and economics