Budget response
When Premier Dr. Ewart Brown repeats his well worn claims that the media and the United Bermuda Party form a "combined Opposition", the fact that this newspaper agrees with the UBP in its criticism of Government's 2009 Budget will no doubt be the first exhibit in his case.
So be it. It is undeniable that this newspaper agrees with much of what was in Shadow Finance Minister E.T. (Bob) Richards Reply to the Budget, not because this newspaper marches in lockstep with the UBP, but because the arguments in that speech are well founded and accurate.
The 2009 Budget does indeed exhibit the worst of Government habits – spin, a wilful decision to ignore the facts and a stunningly optimistic view of the future – which have landed Bermuda in its current mess.
And yet, rather than accept the facts, Government seems to be determined to continue with the same policies that led it to break Bermuda-self imposed limit on borrowing, to raid the sinking fund to pay interest on debt and to continue to spend and borrow and spend and borrow.
As Mr. Richards said, all of this is predicated on the assumption that Bermuda's economy will be recovering by 2010, which, incidentally, is just ten months away, not 18 months as people seem to keep assuming.
Bermuda's economy has proven to be remarkably resilient, and the Island may well recover by then, but it is an assumption, not a certainty, and most forecasters believe that western economies in general will take longer than that to recover.
And as Mr. Richards pointed out and Finance Minister Paula Cox glided over, the worst may well be yet to come as construction projects finish with little future work in sight.
Mr. Richards rightly said that this is where Government can step in with infrastructure projects, provided it can deliver them efficiently – not an area where this Government has a great record. To avoid that problem, he proposed a Commissioner of Contracts, who will ensure that tenders, bidding and contract awards are managed sensibly and according to agreed standards. This is a sensible idea that Government should, but probably won't, take up.
Another criticism where Mr. Richards was mostly right concerns consultants. Mr. Richards said the costs of "professional services" increased by 22 percent this year alone and placed the blame entirely on consultants. This is not entirely correct; professional services covers more than consultants.
But the fact this segment of Government has gone up by 22 percent at a time of theoretical belt tightening is remarkable, and Government's increased use of consultants is largely to blame.
Dr. Brown, in responding to the Budget Reply, actually defended this. He noted, rightly, that an Island the size of Bermuda could not produce experts in every field, using brain surgeons as an example.
But Bermuda hires consultants where they are not especially expert, or, where foreign consultants are brought in, where there is local knowledge. Lawyer Julian Hall is paid $200,000 a year to advise the Ministry of Works and Engineering on capital projects, despite the fact that his most recent expertise in the field stemmed from representing Pro-Active Management Systems and the Bermuda Industrial Union in an arbitration over the Berkeley project. In that arbitration, in which Mr. Hall acted against the Ministry he now works for, Pro-Active was found to owe Government $15 million, a sum which the Ministry has still not tried to collect.
Meanwhile, Mr. Richards says Ambling International, an Atlanta company, is being paid $115,000 a month or $1.38 million a year to advise three Ministries on a range of issues including the "business process" at the Department of Planning, the Southlands-Morgan's Point land swap, the environmental clean-up at Morgan's Point and the preparation of the Park Hyatt Hotel site in St. George's along with general "hotel development advice". Perhaps they are brain surgeons to have such a wide range of expertise, or perhaps this is an expense, like many in this Budget, that Bermuda does not need right now.