We’re going to have to tighten our belts to get through crisis
In late 2019, the Government’s financial position was steadily improving. We had reduced our deficit significantly, increased our GDP growth rate, and made an $80 million payment on Private Placement Notes towards our national debt.
Then, the pandemic hit.
Faced with a once-in-a-lifetime pandemic this government had tough financial decisions to make but ultimately chose to prioritise supporting our people in their time of need. As such, we provided $68 million in unemployment benefits to individuals who lost their jobs and a $12 million grant to the BEDC to assist small businesses who may well have gone under without it. We campaigned to keep Bermudians at heart and that is what we will continue to do.
But those initiatives and other Covid-19 related factors certainly caused an unexpected negative impact on our economy. While we continue to manage our way through the economic crisis it is no secret the challenge has only been made more difficult due to ongoing matters.
As a result of failed leadership, the OBA’s minimum revenue guarantee to Skyport has cost us more than $41 million, their guarantee of the Morgan’s Point project has left taxpayers on the hook for approximately $200 million and we are now left with no choice but to invest $150 million on the Tynes Bay facility as the former government neglected to do so.
We are in a tough situation.
We must also be aware that we face the reality of projected inflation increase within the United States.
As our dollar is pegged to the US dollar and our supply ships come exclusively from the US, an increase of their inflation rates will certainly impact the cost of living in Bermuda.
In response, this government remains focused on the execution of its Economic Recovery Plan designed to keep Bermuda on the right fiscal track as we head towards a balanced budget in three years. The Economic Recovery Plan is guided by seven key themes:
1) Diversifying Bermuda’s economy through the growth of new industries.
2) Making financial markets work better for businesses and consumers.
3) Building critical new infrastructure and enhancing the island’s existing infrastructure.
4) Expanding Bermuda’s resident population to counteract the negative economic impact of changing demographics.
5) Introducing labour market reforms and social development measures that deliver the skills, employment and economic security needed in Bermuda’s future economy.
6) Reforming the delivery of healthcare to ensure equitable access to necessary healthcare services; contain healthcare costs; and engage prevention and health promotion strategies to produce better health outcomes.
7) Developing supportive legal and regulatory frameworks that enable innovation on the island to thrive.
We know things are tough and we share your vision for moving this country beyond the pandemic but to do so we are all going to have to tighten our belts to get our financial house in order. As we prepare for another budget cycle rest assured this government is focused on making the hard decisions today to avoid having to make even harder decisions tomorrow. Together, Bermuda, we will get through this.
Anthony Richardson is the Progressive Labour Party MP for Hamilton South and a former Accountant General for the Bermuda Government