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The PLP’s bitter harvest

By ET (Bob) Richards, Shadow Finance Minister

The Budget Debate in the House of Assembly is over, but the debate on Bermuda’s economic decline goes on on street corners, in homes; anywhere people come together. For today, Bermuda is in the grip of a crisis of confidence and the worry is widespread.

Confidence is that intangible, yet essential ingredient that makes a community, a society and an economy move forward. It is based on a level of trust and understanding that all of the important players will do the right thing to move the community, society and economy forward.

The current Government cannot renew Bermuda’s confidence. Its record is one of decline, job loss and debt. We need a fresh start, a new beginning and a new team to renew Bermuda’s confidence in itself and our future.

Government’s plan in this year’s Budget is not the right one for Bermuda. It does not address the need to grow jobs. It increases government spending. And it adds another $200 million to its debt.

When you boil away the verbiage, the latest budget amounts to a non-plan ‘steady as she goes’. The problem is that ‘as she goes’ is taking Bermuda nowhere but down.

People want change. The Government’s non-plan is to do essentially the same thing while expecting a different result.

The Premier claims her Budget is pro-growth, but the facts show the Government’s policies have been anti-growth; facts like year-to-year declines in retail sales, government revenues and the number of Bermudians jobs.

Their policies are leaving us with a mountain of debt, out-of-work workers and diminishing public services. In answer to the situation, their response, as put forward in this Budget, is to make decisions that add to the debt and stick with policies that keep Bermudians unemployed.

This is the bitter harvest this Government has planted, nurtured and grown.

This year’s Budget is an extravagant attempt to make a silk purse out of a sow’s ear. Revenue estimates continue to be unrealistic. We are very sceptical about their plans to cut spending given the track record of ministers simply ignoring the Premier’s orders to cut back their budgets. And we are amazed by the smokescreen the Government created to hide the cost of interest on its debt, declaring it to be $35 million instead of $85 million. This is consistent with the ‘We had to deceive you’ philosophy of this Government.

Taking the foregoing into account, we estimate the Budget’s current account deficit will be around $255 million, as opposed to the $95 million estimated by Government. The $255 million deficit plus planned capital spending means a total deficit of about $331 million, which will have to be financed with more debt.

And it is in this, Bermuda’s billion-dollar-plus debt, that people can see how tight the corner is that Bermuda has been backed into by this Government. The cost of debt is crippling its ability to govern for the people. This coming year’s debt service (interest plus Sinking Fund allocations) will be about $115 million, or $319,000 per day. The fact that we have to borrow (or raid work pension plans) to make these payments is surely walking us down a dead end road a clear case of robbing Peter to pay Paul.

How do we turn this around? We have to have a plan an opportunity plan that represents a decisive change in direction for Bermuda. We have to promote a policy that stimulates economic growth. We have to have a policy that applies a remedy to the root causes of Bermuda’s economic decline. We have to have a policy that arrests the swelling in the size of government. These are the elements of the OBA plan to renew confidence among Bermuda’s people, in government and in business.

The global recession has indeed had a negative effect on our tourism industry, but the economic study by the Albirght-Stonebridge Group of our trade with the United States clearly shows that our business with the US remained intact throughout the recession, even demonstrating robust growth during that three-year period. The exodus of international business workers has to be the result of local factors. Bermuda-based job creators have told us the culprits are Government’s term limit policy and Immigration hassles

The OBA would suspend the term limit policy for two years pending the formulation of a less destructive policy. We would streamline Immigration and retrain staff in strategic areas to make our customers feel welcome. We need more foreign exchange-earning people in Bermuda.

The Government would have Bermudians believe we can have foreign exchange without foreigners. But the facts in international business, as in tourism, are that foreigners’ money comes “bundled” with them. These people are our customers, let’s treat them as such. In doing so, our customers will spend money in our country and create jobs for Bermudians.

Pro-growth policies must include removing the policies that have driven our customers away and they must promote policies that support a robust campaign to promote Bermuda’s international business services abroad. This combination will restart economic growth, grow Bermudian jobs, grow government revenues and, with strict cost controls in place, enable government to stop the growth in debt and then to reduce it.

Bermuda has lost confidence in the old PLP team which, after 13 years, is out of answers and trapped in its own ideological maze. Bermuda needs a new team that can get this Island working again, for everyone. The OBA team has a combination of youth, experience and diversity and we share a commitment to revitalising the economy in ways that will grow jobs and restore confidence in and across this great Island.

OBA press conference: ET Bob Richards on Government financial results.(Photo by Akil Simmons) February 20, 2012

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Published March 26, 2012 at 2:00 am (Updated March 26, 2012 at 10:00 am)

The PLP’s bitter harvest

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