Tight rein on costs could be hard to keep up, economist says
Proposed spending cuts included in the 2021/22 Budget statement could be tough to maintain, an economist warned yesterday.
Peter Everson, a businessman and former president of the Chamber of Commerce, said: “The hard part, as always, is will the Government be able to keep expenses in line with their budget.
“I don’t see that as being an easy task this year.”
Mr Everson added he had still to review the whole Budget, but one area that jumped out at him was a $5 million – 3 per cent – cut in the allocation to the Ministry of Health.
He said a reduction in Government healthcare spending – combined with the island’s ageing population and the increasing medical costs – could result in higher medical expenses for the public.
Mr Everson added: “If the Government is planning to spend less, it means private health is going to spend more and that’s going to push up the cost of living.”
But he said that he was optimistic about the hotel sector and tourism bouncing back in 2021, which generate needed revenue for the Government.
Mr Everson added: “In the US now, the vaccination process has gained speed and in the population around our gateway cities, I think there is pent up demand among wealthy people over the age of 60.
“If you were someone from Boston, it would look pretty good to come to Bermuda for a couple of weeks.”
Mr Everson said that the opening of the St Regis Hotel in May could make a bigger difference many people expected, with the resort’s management chain likely to launch a strong marketing push.
He said: “We saw that in 2018 with the rebranding of Rosewood Bermuda. That made a huge difference.
“I think that’s going to be bigger than people expect for 2021.”
He was speaking after Curtis Dickinson, the finance minister, delivered the 2021/22 Budget statement yesterday.
John Huff, the president and CEO of the Association of Bermuda Insurers and Reinsurers, backed Mr Dickinson’s financial blueprint.
He said: “We support Mr Dickinson’s commitment to fiscal discipline and responsibility and pledges to work with him and the Government on the ‘ambitious but achievable plan for economic recovery.’
“Bermuda’s debt is a call to action with a sense of urgency to broaden the base of workers and companies in Bermuda to build a better economy for all.”
Mr Huff highlighted Government’s promise to build on its commitment to environmental stability to make Bermuda a global leader in climate risk management.
He said the island’s insurers and reinsurers looked forward to working with the Government, the Bermuda Monetary Authority and other bodies to explore opportunities in global climate risk finance and related business.
Mr Huff added: “Climate driven economic opportunities are strategically aligned with Bermuda’s rich past and could be a real driver of a future, adjacent pillar of economic activity in Bermuda’s future.
“There’s never been a better time to lean in on the increasing emphasis of addressing climate change.”