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‘We’ll revive this economy, regrow Bermuda without looking at privatisation’ Richards

The One Bermuda Alliance is not philosophically opposed to privatisation of government services but has no plans to do so.

Shadow Finance Minister Bob Richards stated his party’s position at a press conference following the Reply to the Budget in the House of Assembly.

Privatisation as a cost-saving measure was raised as a discussion point at the Chamber of Commerce post-Budget breakfast meeting on Monday.

Premier Paula Cox has said that Government is prepared to discuss “partnering” with the private sector on “issues that are in the national economic interest”.

Transport Minister Derrick Burgess and Economy Minister Patrice Minors have since come out against privatising the buses and the postal services both key services in their portfolios.

“Privatisation is not part of our plan. We plan to revive this economy, to regrow Bermuda without looking at privatisation,” said Mr Richards.

Pressed further on the party’s position, he said: “We’re not philosophically opposed to it but we don’t think that is necessary at this time.

“But we don’t know for sure. It’s certainly not part of our plan.”

Mr Richards took the opportunity to elaborate on criticisms he levelled against Ms Cox’s Budget in his Reply.

“The Premier wants Bermuda to think that there’s a choice between growth and austerity. I hope I was very clear in my speech that that is sheer nonsense,” he said.

“Our plan is to have elements of both. And that’s the only way you can do this.

“And most importantly you have to grow the economy but it is a nonsense to think that you have to increase the size of Government to promote growth in the economy. That is just dead wrong.”

He continued: “You don’t have to privatise parts of the Government if you can get the economy, the private sector, right.

“In the meantime you do have to control Government spending to help get this debt under control. You can have both.”

Asked how he would stem the revenue drainage from loss leaders like the buses, ferries and the postal service, Mr Richards noted that the ferries and buses were originally privately run but were losing money and got nationalised.

“Private enterprise has to make money otherwise it will die. So, the whole idea of privatisation is a very complex issue, not to mention the fact that we have unionised people working with these enterprises.”

Bermuda’s ferries, which will cost $7.6 million to operate for a revenue of $1.3 million, are expected to lose $6.3 million by the time the current fiscal year ends on March 31.

And the Bermuda Post Office which costs taxpayers an estimated $15 million this year to operate and brings in just $5.4 million is among several other Government-run revenue-generating services losing millions of dollars.

Some $11 million of taxpayers’ money is expected to be drained by the bus service which brings in about $7.9 million and costs $18.4 million.

If Government got out of the business of providing these services and handed them to the private sector, the savings to the public purse during the current fiscal year would be close to $27 million.

Add in the costs of providing employee benefits and the savings are even higher.

Moreover, Government coffers would be boosted by additional payroll tax revenue.

Collectively, public buses, ferries and the post office employ about 550 people or just under ten percent of the total number of Government employees.

Airport operations is another big money loser, employing 46 people and costing over $20 million to operate while bringing in just over $11 million.

But the Department of Airport operations manager Aaron Adderley has criticised that analysis saying it does not take into account airport departure tax which helps the airport make a modest profit.

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Published March 03, 2012 at 1:00 am (Updated March 03, 2012 at 6:40 am)

‘We’ll revive this economy, regrow Bermuda without looking at privatisation’ Richards

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