Bob’s mountain to climb
Bob Richards has a mountain to climb. The question is will he ever reach the top?
Yesterday we reported how Government revenues had fallen almost ten percent in the third quarter of last year.
At the same time Government had increased its current expenditure by 4.3 percent to $267.9 million, although this was the first time in six quarters that spending had actually increased.
Figures from the Department of Statistics also showed in the first six months of the current budget year (April to June and July to September quarters) Government expenditure was $560 million, but only $412 million was collected in taxes, fees and other revenues in the same two quarters.
Today, new Finance Minister (ET) Bob Richards is due to hold a press conference where it is expected that he will outline the state of Bermuda’s public finances. (Check breaking news on www.royalgazette.com for the story.)
Why we are in this state, although important for the history books, is not really the issue at hand right now. The issue at hand is how we are going to get out of this mess?
On the basis that there is a huge black hole in Government’s finances what are the options? Some on www.royalgazette.com have suggested income tax — but that could seriously impede people’s already limited spending power as well as send out the wrong signals to our precious international business partners.
Prices for things like buses and ferries will inevitably have to go up, free things like bus travel for schoolchildren must be under threat, jobs will almost certainly have to go, charities may well see already slimline grants get slimmer still.
It is going to be tough. The pain could be excruciating.
Of course this is conjecture (although you hardly need a crystal ball to see what is coming) but Mr Richards must balance any austerity package with some ideas for growth.
He must fuel an entrepreneurial spirit, he must look at who are the income generators — here and abroad — and foster a climate that keeps and attracts them, even if it means more expatriates.
Will the unions cooperate? They must or it could do more harm than good. (This newspaper has repeatedly called for commonsense to be exercised and for the good of the Island to put ahead of the good of one group.)
Will the public tolerate it? Probably, to a degree, but only if they can see the light at the end of the tunnel.
This morning, as he prepares for his press conference, Mr Richards stands, looking up from the foot of the mountain. It is going to be a long, arduous climb with many obstacles along the way. Let us hope he reaches the top.