This is a statement delivered by the Premier, Ewart Brown, in the House of Assembly this morning on low income thresholds.

A STUDY OF BERMUDA HOUSEHOLDS IN NEED

Mr. Speaker, I am pleased to present to this Honourable House, the findings of a study on Low Income Thresholds for Bermuda Households in Need.

Mr. Speaker, the House will recall that in the 2006 Throne Speech, the Government of Bermuda made a commitment to “create programmes to empower the disadvantaged to give them a chance for a fair fight for their futures”. In support of this the Government first determined to establish an official poverty line or low income threshold for Bermuda.

Mr. Speaker, today the Government delivers on its promise and presents a report entitled “Low Income Thresholds - a Study of Bermuda Households in Need”. This has been a long awaited study, but I must remind the Honourable members of this House that such a study so important to the livelihood of the people of Bermuda must be thorough, wide-ranging and relevant.

Mr. Speaker, in the absence of a universally agreed definition of poverty, the Department of Statistics spent just under two years diligently researching poverty and low income models from different countries; meeting with, and obtaining feedback from local key stakeholders; and consulting with international academia and organizations.

Mr. Speaker, the United Nations defines poverty as: ‘the money needed to purchase those goods and services deemed necessary for living a life free of basic deprivation’. However, deprivation to this extent may not be the experience of a Bermuda household. In its investigative research, the Department of Statistics revealed that poverty is a very complex concept to define and measure particularly in affluent and wealthy countries such as Bermuda.

Mr. Speaker, it is difficult to distinguish between those in need and those who are less well-off, especially when the social, economic and financial conditions and choices differ for families. For this reason, many wealthy industrialized countries use ‘low income measures’ to identify families in need that face serious challenges to earn an adequate level of income no matter how much they work.

Mr. Speaker, it is against this backdrop that ‘Low Income Thresholds’ or LIT measures were developed as indicators to identify and assist Bermuda households that are economically disadvantaged or simply less well off.

The LIT study revealed that in 2007 there were 3,100 households in Bermuda currently living below established low income thresholds which range from $27,000 per year for a single adult household to $76,000 a year for a family of two parents and two children younger than 16 years old. LIT measures were calculated for five different household types, namely: single-adult, two adults, single parent with one child, two parents with one child and two parents with two children.

Mr. Speaker, a family with their total household income falling below the respective LIT level would be considered in need if they can show evidence of good fiscal choices in household spending on goods and services. The study found that the highest incidence of low income households occurred for single and two parent households with young children, and, elderly adult households.

Mr. Speaker, the LIT measure is derived from a nutritious low-cost food basket as approved by the Government Nutritionist combined with essential services that families need such as education, health and transportation. The LIT measure shows that in 2007, the minimum expenditure a single parent household with one child needed to ensure a nutritional diet of food was $4,271 per year or $11.70 per day; housing cost averaged roughly $61 per day or $1,893 per month, the cost of fuel and power totaled close to $9 per day while health care costs averaged $7.20 per day.

Mr. Speaker, no longer will we need to debate about the poor in Bermuda without the facts to back what we say. We now have the empirical data that tells us exactly how much income is needed to live at a standard of living that does not put families at an economic disadvantage. Income levels have been calculated for five different household types and will be used in collaboration with Government’s existing financial assistance program to assess families in need.

Mr. Speaker, may I remind the members of this House that in the interest of transparency and accessibility, this Government put in place the 2004 Financial Assistance Regulations which sets out guidelines to ensure that families in need are sufficiently assisted. This has always been the position of the Government. Moving forward, these LIT measures will be used by the Department of Financial Assistance as a tool to make annual adjustments to the Regulations which govern the amount of fees paid to families.

Mr. Speaker, let me add that the social programs the Government has already committed to is a direct reflection of the forward thinking Government that we are. The Ministry of Culture & Social Rehabilitation has already used the results of this LIT study as a reference to develop a suitable financial threshold as criteria for families who will apply for free child care assistance. Other programs such as free public transportation, an affordable health care system and subsidies for the elderly will certainly help to alleviate the financial burden that some households face.

Mr. Speaker, in support of the Government’s Sustainable Development Strategy and Action Plan, we intend to build on these benchmark income thresholds, by tracking over time, the long-term impact of Government spending on the economic and financial positions of families in need.

Mr. Speaker, this Government has always supported the plight of families in need through the financial assistance program. Therefore we encourage families who are struggling to make ends meet, to contact the Department of Financial Assistance and obtain the help that is readily available.

Mr. Speaker, contrary to what we hear, we are a Government that cares! As promised in the 2007 Throne Speech, we do intend to see a ‘more prosperous Bermuda, one that includes all of the people of Bermuda and touches every aspect of their lives.” This study is just one step closer towards that end.