Short of job, short of luck, and leaving
The airport scene described at the Azorean repatriation flight on Tuesday was pretty upsetting, garnering more than 400 comments. It was obvious that numerous individuals were leaving short of cash, short of wages and contract provisions, short of emotions, short-changed all around.
Financially short-changed work permit holders; cut off at the knees knowing very well they would have no recourse whatsoever. Nothing humane or to be proud of there, certainly, not reflective of the wonderful, caring attitude that all Bermuda islanders espouse to.
What ever happened to human decency, having a moral code and doing the right thing? Not what benefits the employer the most. Not what may benefit those residents now assumed to be taking those jobs.
Not much of that around these days it seems.
Granted, some owners are probably just as financially and emotionally bereft as their former employees, given the consequences of the Covid pandemic have hit most global economies hard with Bermuda no exception. Business owners who have struggled to survive in this economy, and have just wound up absorbing financial losses, must simply have no emotional reserves left to continue enduring the economic pain.
And yes, there are many good empathetic employers.
Kudos and generous thanks to those extremely generous, conscientious employers who have done the right thing: provided redundancy benefits, paid employee health insurance as well as assisting in every way they could to make temporary or permanent unemployment financially tolerable. They all deserve gold stars. We cannot name them, but they and their sidelined employees know who they are.
Sometimes kindness is just not enough. The more than 400 comments on this topic covered the entire spectrum of caring and indifference. Employment contracts can appear protective by definition, but in these situations, even though they may be enforceable, require money, action and time.
Human nature being what it is, even when personally empathetic, it becomes difficult to effect change for others even in the best of times. In more adverse times, the choices comes down first to individual and family survival.
The basic facts are that work permit holders are temporary at best of times.
That's the way it is. The empathetically sad fact is that this measure had to be enacted by government for the good of the economy at all.
But let's think about the impact of the loss of wages, payroll taxes, health insurance, social insurance contribution on individual employees.
When it comes down to the almighty dollar, it does not matter the impact on who, what employees or when any other type of agreement is in place, there are always some individuals (employers and others) who will use the circumstances to justify their own financial advantage.
Readers, these jobs are now considered open for Bermuda islanders. Can the same benefit losses happen to individuals residing and working here who apply for these positions?
If so, as I have mentioned before, Bermuda islanders need to be aware and extremely vigilant to track every single deduction from every single paycheque.
What are other ramifications of the loss of work permit holder's wages flowing through the local economy?
Government needs payroll tax, social and health insurance contributions to keep revenue flowing, otherwise financial assistance outgoings increases, while other substantive infrastructure costs are curtailed.
Losing any worker from employment decreases government tax coffer inflow, even if all employment taxes are paid in a timely manner.
About a year ago, Moneywise last reported on the numbers for unpaid payroll tax, health insurance, social insurance, and those to the Bermuda national pension. The results for 2011-2017, from the Office of the Auditor-General audited financial statements, list these payroll tax arrears alone at approximately $56 million. Anecdotal commentary indicates that actual numbers are higher in this fiscal year.
The financial statements of the Bermuda Government Consolidated Fund for March 31, 2018, and March 31, 2019, do not break out these items. Moneywise has been unable to retrieve this more current detail at press time to provide an update.
Thus, where are we with all that?
Have payroll tax and benefits collections gotten any better?
Will payroll tax proceeds increase or decrease this fiscal year?
The 2019 Consolidated Report lists payroll tax as the Government's biggest revenue generator at more than $467 million, assuming that under the accrual method of accounting some allowance was made for uncollectible receivables.
Certainly, as a budget line item, taxpayers need to review this information given that the Minister of Finance, with Government approval, is now planning to borrow between $1 billion and $1.25 billion to take the community through the next three years, paraphrasing: Curtis Dickinson, the finance minister, tabled an amendment to the Government Loans Act 1978 to raise the statutory borrowing limit by $600 million to $3.5 billion in the House of Assembly July 17, 2020. Government also planned a bond issuance on the international capital markets that, depending on market conditions, could range between $1 billion and $1.25 billion.
Mr Dickinson said: “The proposed amendment will provide for the authority of the Government to borrow up to the newly established limit as we navigate our way through the Covid-19 pandemic and beyond. The proposed statutory debt ceiling of $3.5 billion is set at a level to enable funding of the Government and its economic recovery over the next two to three years.”
This move means Government will have raised the debt ceiling by $1 billion in the space of a year.
Mr Dickinson said the proceeds from the bond sale were intended to finance the anticipated deficits for fiscal years 2020-21, 2021-22 and 2022-23, refinance the credit facility associated with the Caroline Bay project and other credit facilities for general liquidity needs, as well as Covid-19 emergency measures and, depending on market conditions, to “liability manage tranches of existing indebtedness”.
• Government audited consolidated fund financial statements https://tinyurl.com/y3cpsjts
• Frustration and despair at delinquent employers, October 5, 2019, Moneywise https://tinyurl.com/y2yf2vq3
• Martha Harris Myron CPA JSM: Masters of Law — international tax and financial services, dual Bermudian/US citizen. All proceeds from these columns are donated to The Bermuda Salvation Army. E-mail: firstname.lastname@example.org