We’re in some trouble now
“Cheer up, the worst is yet to come” Philander Chase Johnson (Yes, a real person, an American journalist and humourist, now deceased).
There's no need for me to pile on, Mr. Editor, but let's just say that I am not at a loss for words over the recent news about the Bermuda economy. The chickens, people, are coming home to roost. Saturday's headline said it all: “Island's economic output plunges.” Bermuda's Gross Domestic Product (GDP) for 2009 had slumped by 5.8 percent, or 8.1 percent in real terms when inflation is taken into account. I appreciate that these sorts of fancy stats may not mean much to the average person until it actually affects them. But it will, if it hasn't already. The signs are all around us: increasing redundancies, fewer jobs, shorter work weeks, wage cutbacks, reduced work permits, falling rents and empty premises, mortgage payment challenges, maxed out credit cards, fewer and fewer retail sales and purchases (here and abroad), and let's not talk about our visitors. I am tempted to say, Merry Christmas Bermuda. But I won't.
We are in some trouble. Don't let the Government kid you, and do not be fooled into thinking that all our troubles are a result of a global economic downturn no one could have predicted. Premier and Finance Minister Paula Cox tried that one on back in February in her Budget Statement for the year. I remember too the opening line: “As we move from the economic crisis of 2009 to the recovery in 2010 we stand on the cusp of a new beginning.”
Recovery!? Sorry, but I don't think so.
There was also this now rather infamous prediction: “The economic outlook for Bermuda is more positive than it was at this time last year. While the economy is likely to have contracted by as much as 2.5 percent in 2009, there is anticipation of a return to positive growth in 2010, perhaps in the range of one percent.”
Anticipation!? Sorry, but anticipation does not pay the bills.
The PLP Government got it wrong. Plain and simple. They failed to plan for the worst and instead hiked taxes and continued spending like there was no tomorrow. Tomorrow is here and the only thing that has grown is Government, Government expenditure and the debt. The original estimates were that it looked like Government planned on spending $100 million a month while taking in only $88 million a month, a monthly deficit of $12 million or $144 million for the year. We don't know for sure but there is widespread speculation that with a shrinking taxpayer base, Government revenue is slipping even further. I know, I know, the Premier did promise in the Throne Speech to start exercising some restraint to effect a savings of at least $150 million.
It is tempting to say: too little too late. But $150 million isn't a little. What we are probably going to need is more, much more; that is greater savings coupled with a profound change in the culture of expenditure and entitlement that has marked the tenure of the Progressive Labour Party Government, particularly in recent years, when we have seen Government debt mushroom from $130 million to over $1 billion. Even PLP MP, now Minister Terry Lister felt compelled at one stage to call this phenomenal and excessive growth frightening.
You might say it is time for some tangible, demonstrable evidence that they get it. I mean it was only as recently as the Throne Speech last month when the Governor, speaking words penned by the Government, told us we were now in a “post-recessionary climate”. I think, Mr. Editor, that on that score, some post-Throne Speech correction is required.
I look back now and I have to wonder exactly what it was that we were doing last Friday on the Hill. It was another short day, very short: two straightforward pieces of legislation that had the support of all sides. There was hardly a mention of the news that our GDP had plunged. It had been revealed off the Hill outside the House in a release published by the Department of Statistics, and I very much doubt that the news came as any surprise to the Premier and her Government.
What we got inside the House instead was a plethora of Ministerial Statements about this, that and the other, but not about the economy, all of which took about an hour and a half to read by the several Ministers who spoke. I kid you not. Here's a short list of what was read to us:
► A brief on World AIDS Day 2010.
4 Improvements in the Health Care System: Minister Zane DeSilva's attempt to counter criticism the week before from Opposition MPs Grant Gibbons and Louise Jackson.
4 The PPP contract which had been signed by the Bermuda Hospitals Board, the details of which Minister DeSilva wouldn't give until “the new year, once the relevant bodies have been briefed.” Sorry, but the public isn't a relevant body, I suppose.
4 Minister Patrice Minors' appeal on a Technology Leadership Forum Internship Programme.
► Education Minister Dame Jennifer Smith on the CedarBridge Academy prize-giving and a Dellwood Middle School camping retreat.
► Attorney General Michael Scott on the Parole Board's 2009 Annual Report.
► New Minister Michael Weeks on the 6th annual Bermudian Students Dinner in London (and, yes, no mention of cost or any cutbacks there) as well as on a ten-day International Parliamentary Governance Seminar he got to attend in November.
► Another update on progress at the new Magistrates' Court/Hamilton Police Station by Minister Derrick Burgess who wanted to once again convince us that the $13 million increase in total cost was the result of “unanticipated costs” and not poor management.
4 Minister Neletha Butterfield on the public's use of the internet and accessing information on Government services through its website.
I trust I left no one out. If I did, it was unintentional. The Opposition can only listen and that isn't always easy to do over 90 minutes. We joke from time to time that in debate it is death by a thousand words instead of by a thousand cuts. Ministerial Statements are really meant to be on matters of importance in which Government sets out its position and policies on major issues of the day and for that reason they get read into the record, i.e. the House Minutes. At least, we have changed the rules so we can ask questions at the end on any matters arising. That helps, if you can get answers.
But there was nothing that morning on the economy and the state of Government's finances. That's a kind of statement too, Mr Editor.
You got a statement? Write jbarritt[AT]ibl.bm