Opposition Budget Reply
PLP promises tax reform in Budget reply
Tax reform aimed at the privileged will be a key priority for the Progressive Labour Party if it wins the next General Election, leader David Burt said yesterday.
Mr Burt vowed to tackle inequality by targeting “vast swaths of domestic wealth and income”, which until now have not been subjected to tax.
Delivering his Reply to the Budget, the Opposition leader pledged that the PLP would launch a Tax Reform Commission, as well as boosting the economy with a job-creating Bermuda Fund and Economic Diversification Unit.
In a major shake-up of the education system, Mr Burt said a PLP government would phase out middle schools and introduce a new curriculum with more focus on science, technology, engineering and maths.
Other ideas in the PLP’s “People’s Budget” included a local lottery dedicated to sports funding, performance-based pay for civil servants, and creation of a technology incubator to make Bermuda an intellectual property hub.
In his Budget Statement last week, finance minister Bob Richards promised to reduce payroll tax for those on low income, and increase it for high earners.
Claiming the One Bermuda Alliance was not going far enough to address inequality, Mr Burt said: “Fortunately, the PLP does have a plan to create more jobs and make Bermuda more attractive for both local and international business.
“We need to reduce the incentive for companies in Bermuda to outsourcing existing jobs while creating a favourable environment for growth in our domestic and international sectors, which will lead to new jobs.
“The PLP’s agenda for growth will reduce the cost of doing business in Bermuda, tackle income inequality, reform our tax system, diversify our economy, create jobs in Bermuda, harness technology, promote entrepreneurship, increase our global competitiveness, make government more efficient and design an immigration system that works for Bermuda.”
Mr Burt described the island’s increasing reliance on payroll tax as “dangerous”.
“We must move quickly to reform our system of taxation before we tax ourselves out of being an attractive jurisdiction,” he added.
“There are vast swaths of domestic wealth and income that have never been subjected to tax, which by its very construct fosters continued economic inequality.
“This is why our taxation system promotes and fuels economic inequality.
“Tax reform and broadening the tax base cannot be effective if they are unwilling to look at taxing the passive income of the privileged persons in society.
“When the PLP is returned to Government, one of our first actions will be to create a Tax Reform Commission.
“Its mission will be to conduct a wholesale review of our system of revenue collection and taxation to make recommendations to parliament on revenue and tax reform and measure to increase tax compliance. It will be our aim to complete the process of review and consultation in the first 18 months of the new Parliament so that reforms can be implemented quickly.”
A new Economic Diversification Unit will create “not only a third pillar of our economy,
but a fourth and fifth”, Mr Burt said.
The Bermuda Fund would be seeded with a small portion of the pension funds that are under the control of the government, he said, so that the island can “tap into the investment expertise on the island, while providing an additional outlet for our large pension funds to invest more of their monies in Bermuda-based equity investments”.
The PLP will also develop a technology incubator at Southside, he added, that will allow “start-ups in the technology field”, as well as a Digital Intellectual Property Register.
New tax relief will be provided for first-time entrepreneurs, he said, greater freedom given to peddlers and vendors, and access to foreign capital expanded for first-time business owners through a relaxation of the 60/40 rule.
Employers will be given less incentive to use foreign labour because they will have to provide occupational pensions for
employees on work permits, he said.
Phasing out middle schools would be part of a plan to “reshape our school system with one better suited to the needs of our youth and the wider community”, Mr Burt said.
Education plans included providing discounted Bermuda College tuition for students in need, while a national skills registry will help people into work.
Other ideas included:
• keeping the Bermuda Washington office open;
• reversing increases in special rates of duty applied to hotels and Belco;
• providing more competition for the island’s domestic banking sector;
• extending maternity leave from eight to 13 paid weeks, and introducing legislation to provide for unemployment insurance;
• providing the private sector incentives to construct residential communities for seniors;
• implementing a sugar tax;
• increasing competition in the local insurance market;
• promoting medical tourism to increase use of healthcare facilities that provide “cutting edge treatments”.• To read the Opposition Reply to the Budget in full, click on the PDF under “Related Media”.