The public coffers have once more been filled with tens of millions of dollars more than expected — thanks to the Island’s booming economy.

For the fifth Budget in succession, the Finance Minister reported that Government was raking in far more revenue than projected.

Paula Cox told the House of Assembly that the revised estimate of total revenue for the financial year 2006/07 was $856 million — $21 million above the original estimate.

Over the past five years the Government has underestimated its revenues by a combined total of around $230 million.

And Ms Cox declared that in 2007/08, the Government plans to collect $917 billion — seven percent more revenue than this year.

However, the Minister also reported that most of this year’s excess income has already been spent, as Government expenditure is running at $16 million more than planned — with much of the extra revenue being used to slash borrowing requirements.

Customs duty provided around $10 million of the unanticipated funds, while the remainder was sourced equally from payroll tax and land licence fees. Ms Cox gave an overview of a booming economy with job numbers, visitor arrivals and Gross Domestic Product (GDP) all rising over the past year, while inflation remained steady at just over three percent.

She added that since the Progressive Labour Party came to power in 1998, the Island’s GDP had risen from around $3 billion to in excess of $5 billion.

The unplanned revenue has allowed the Government to cut the amount it needs to borrow — reducing both the public debt and debt service costs.

“In 2006/07, Government’s macro-economic policy was sound,” Ms Cox said. “It stimulated further economic growth and the resulting fiscal outcome was favourable.

“The enhanced revenue outcome was used to fund a larger portion of the planned capital expenditure programme.

“The ultimate effect of the improved revenue performance was a reduction in planned borrowing by $29 million.

“Instead of borrowing $85 million, as originally forecast, the capital borrowing requirement was reduced to $56 million.”

She added: “The additional revenue in 2006/07 was invested in needed infrastructure that will pay social dividends to the people of Bermuda for many years to come.”

Ms Cox said the statutory ceiling on public debt, which was raised two years ago to $375 million, would remain unchanged, even though the debt policy limit of ten percent of GDP would allow for around $500 million to be borrowed. By the end of March, Ms Cox said the actual net public debt outstanding would stand at around $206 million — $150 million of which had been inherited from the last United Bermuda Party administration.

Ms Cox predicted that inflation could decrease, along with interest rates, in a global climate of modest economic expansion. However she added that this depended largely on oil prices.

“The projection (oil price per barrel) for 2007 is $60,” Ms Cox said. “As a result, consumer prices may rise by 2.0 percent, considerably less than the 3.3 percent recorded in 2006.”

She added: “The Ministry of Finance anticipates GDP growth in the range of 3.0-3.25 percent with inflation tracking around a core rate of three percent if oil prices perform as anticipated.”