Sinking fund change passed

  • Budget surplus predicted: Anthony Richardson (File photograph by Akil Simmons)

    Budget surplus predicted: Anthony Richardson (File photograph by Akil Simmons)

Legislation to suspend mandatory payments into the Sinking Fund was passed by senators last week without major opposition.

The Government Loans Amendment Act 2019, along with the Electricity Amendment Act 2019 and the Bermuda Economic Development Corporation Amendment Act 2019, were approved by the Upper House on Wednesday.

Anthony Richardson, a government senator, said the government loans legislation would prevent the Government from amassing debt to pay debt.

He explained that the interest expense associated with borrowing to fund the mandatory sinking fund contributions would be greater than the investment return generated on those funds.

He added that the Government had predicted a budget surplus this year and next.

Nick Kempe, the One Bermuda Alliance Senate leader, said he understood the logic of the move, but that he doubted the Government’s ability to run at a surplus.

Mr Kempe added: “It’s all good and well to say you don’t want to borrow to save, but it’s Government’s own actions that are forcing us into this position.”

Mr Richardson said the BEDC Amendment Act would extend the powers of the corporation and expand its “toolbox” to aid entrepreneurs.

The legislation was designed to give the BEDC the power to form subsidiary companies with entrepreneurs and businesses and give the quango the ability to enter into formal corporate arrangements, in association with other people, for the purpose of helping them in the development of a new business.

Under the legislation, the BEDC will be able to buy shares in, or incorporate, a local company and be admitted as a member of, or form, a local limited liability company.

Mr Richardson said the BEDC had the staff and budget to use its new powers.

The senator also presented the Electricity Amendment Act, which he said would require the Regulatory Authority to consult and receive approval from the minister responsible for energy if it intended to allow the transfer or assignment of a bulk generation or transmission, distribution and retail licence.

Mr Richardson said the amendment would not affect the independence of the Regulatory Authority, despite scepticism from the Opposition.

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Published Jul 8, 2019 at 8:00 am (Updated Jul 8, 2019 at 7:43 am)

Sinking fund change passed

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