Fahy: savings plan lacks tangible long-term solutions
The Affordable Bermuda Agenda “falls woefully short on tangible long-term solutions” to lower the cost of living on the island, the Shadow Minister of Home Affairs said this morning.
Michael Fahy also claimed that the savings blueprint unveiled by the Government was “glossy” and lacked detail.
Alexa Lightbourne, the Minister of Home Affairs, said yesterday that one element of the plan — the Essential Goods Initiative — will see wholesalers and retailers team up with the Government to guarantee consumers savings on everyday items to address the cost of living.
The scheme will be launched on November 1 and is to result in a reduction in the prices on everyday items such as baby formula, rice, toiletries, dairy products and cleaning supplies.
Under the partnership, wholesalers have committed to apply a 10 per cent reduction in the cost of designated brand products supplied to retailers.
The agenda said that retailers had agreed to apply a further 10 per cent reduction at the shelf.
It said consumers would be guaranteed savings on participating brands for a nine-month period.
Seth Stutzman, president of The MarketPlace, told The Royal Gazette of the supermarket chain’s part in tackling the island’s cost of living.
“Our teams have been actively engaged in discussions with the Government on the cost-of-living initiative since meeting with the new Minister of Home Affairs, Alexa Lightbourne, back in April. We appreciate the time taken to listen to industry and the public and to better understand the challenges we all face.
“The vast majority of products on Bermuda’s grocery store shelves come through local wholesalers, so their participation in this programme is key. We’re grateful to the Government and to the wholesalers for working together to make this possible.
“Operating from a remote island has its challenges, and many of the cost pressures we face come from outside Bermuda, but we manage them as responsibly as we can.”
Mr Stutzman added: “We also hope the Government continues to look at broader reforms, such as modernising import regulations, reviewing embargoes and improving processes at the Department of Environment and Natural Resources, customs and the docks, which would all help lower costs and strengthen the local supply chain.
“Finally, we thank the Government for their kind tributes to our late colleague, Vernon Hassell, who led The MarketPlace’s cost-of-living initiatives earlier this summer. His dedication, leadership and spirit continue to inspire all of us.”
However, Mr Fahy said the reductions amounted to the “one apparent major initiative” announced by Ms Lightbourne.
He added: “Now, no one will kick a gift horse in the mouth. But it is worth reminding the people of Bermuda that the OBA negotiated a 10 per cent reduction of all groceries on Wednesdays for far more than nine months.
“The devil in this will be in the detail. It always is. Remember, the PLP was elected in February and the discount initiative will start November 1.
“So, it took nine months to come up with something so obvious. Not much progress really.”
In December 2013, the One Bermuda Alliance government in tandem with retailers introduced a 10 per cent reduction scheme for one year as residents struggled with the effects of a global recession.
Major players The MarketPlace, Supermart and Lindo’s took part in the scheme — but a year later the grocers said it was not sustainable.
Mr Fahy, who served as Minister of Home Affairs at the time, told the Senate a year later that the grocers suffered financially because of the weekly discount, and could not continue the programme.
He said today that the OBA could do better than the Government’s savings scheme, such as its proposal for targeted electricity reductions for low-income earners.
Mr Fahy added: “We proposed changing planning laws to allow for different building materials to lower the costs of construction.
“We proposed subsidised shipping costs. We suggested ways to increase our population to help spread the cost loads.”
He said the OBA was “flattered” that the Progressive Labour Party government took a lead from the Opposition’s book in negotiating with grocers and wholesalers.
“Overall, lots of rhetoric for the Government, and slack on detail. I don't think the many consultants in the ministry earned their keep on this one,” Mr Fahy said.
The Government said that the scheme came after a meeting in August with retailers and wholesalers to develop and advance practical solutions to mitigate the cost of living.
It followed research and analysis conducted by the ministry on recommendations shared at the Cost of Living Summit held in June.
It was also crafted with input from 2,200 residents and 270 business sharing experiences in a cost-of-living survey.
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