Parts of the Civil Service could be privatised to cut Government costs, the Bermuda Democratic Alliance said yesterday as it outlined its economic strategy for the Country.

At a press conference, the BDA's Shawn Crockwell said the Island's economy was in a "precarious state" with Government spending more than it raised in revenue.

He said Government had an $850 million debt the equivalent of $25,000 per taxpayer and that capital projects such as the new Dockyard pier and Police/court building were coming in "way over budget".

But the MP said the party had a plan to address the problems in the short and long-term, which included examining potential privatisation of some roles or tasks performed by the Civil Service and reviewing payroll tax to stabilise or reduce the cost of living for lower income earners and small businesses.

Mr. Crockwell said: "We are dependent, more than ever, on international business at a time when many of our flagship exempt companies are showing a lack of confidence in our economy, some of them choosing to relocate. Two-thirds of Bermuda's business leaders expect things to get worse.

"We have a plan to steady the ship to repair Bermuda's economy and to ensure we can once again flourish on a global scale. Our plan will assist Bermuda to not only recover from this current economic downturn, but emerge as the international economic centre it once was."

He said the BDA had identified some key contributing factors to Bermuda's deteriorating economic situation including poor fiscal planning and lack of transparency in Government spending. And he said that Government spending in excess of revenues has resulted in increased Government borrowing, compounding the Country's debt burden to unprecedented levels and a tax system which was overly burdensome on the lower and middle classes.

The BDA believes Government must make a commitment to achieve a budget surplus over an economic cycle, and work to ensure that spending is less than revenues; that Government must be transparent and prudent in its spending; that it must facilitate an environment that encourages economic activity, and that Government must diversify its sources of tax revenue.

In the short-term, the BDA would:

– define a five-year rolling surplus target as part of an overall financial strategic plan;

– increase transparency of Government expenses through more detailed and timely public reporting; expand the influence and powers of the Public Accounts Committee;

– increase the transparency and effectiveness of the Government tendering system, increase access to Government projects for small businesses and ensure that all departments, Ministries and quangos use the same procurement system and operate under the same spending procedures;

– undertake a competitive analysis of other similar jurisdictions and review the work permit process, seeking ways to improve results for Bermuda, Bermudians and Bermuda-based companies;

– consider reverting to a duty system that does not penalise retailers to pay duty until the goods are sold;

– review payroll tax to stabilise or reduce the cost of living for lower income earners and small businesses.

According to the BDA long-term solutions include:

– ongoing effective analysis of the budget and impact on Bermuda's future financial position;

– exploring potential privatisation of some roles/tasks performed by the Civil Service;

– promoting new industries in an effort to diversify the economy, employment, and Government revenue streams; exploring alternate sources of Government revenue and foreign cash inflows;

– a move that would see debt issued for future funding offered to the Bermuda market in Bermuda dollars before being offered to foreign markets in foreign currencies;

– supporting the development of Hamilton as a dynamic residential and cultural hub enabling continued growth whilst limiting environmental impact on the rest of the Island and consideration of a provision of incentives for companies who have workers living in Hamilton.

BDA leader Craig Cannonier said: "Bermuda is at an economic turning point, but we have a plan to get the economy back on track."