Axing a large number of public-sector jobs is not the answer to Bermuda’s fiscal woes and doing it could simply inflict more damage on the struggling economy, Premier Paula Cox told a business audience yesterday.Speaking to around 280 people at a post-Budget breakfast hosted by the Bermuda Chamber of Commerce at the Fairmont Hamilton Princess, Ms Cox said slashing Civil Service jobs would have increased the public debt in the coming year because of redundancy costs.Ms Cox also said that she would not consider balancing the current account budget as a success for a Finance Minister as it could easily be achieved if the Government deciding to do nothing.Overall, Ms Cox got a warm and respectful reception from the many employers in the room who had seen their employment cuts slashed by Friday’s Budget, thanks to the rolling back of the payroll tax rate to 14 percent, reversing the two percentage point increase to 16 percent last year.Ms Cox said: “Some people may believe that Government should fire large numbers of employees. The UK mistakenly thought that was the answer to their challenges. But the private sector has no intention of absorbing them.”This scenario could end up with a government spending more money on redundancies and support than anticipated, she added.Later, in answer to a question on why Government had not made further cuts at a time when businesses and individuals were suffering, Ms Cox said: “Further cuts could mean two things: cutting jobs or further cuts to grants. Cutting jobs would mean that more people were unemployed. This would certainly put more pressure on the private sector, which is already rationalising the jobs it has and it would also mean further redundancies.“To make people redundant would increase Government debt this year, because of redundancy costs. Savings wouldn’t be realised for another year. It could also mean an increase in spending on financial assistance.“Cutting grants would have meant that the vulnerable would have been further disadvantaged. At a time when people are losing jobs, the Government can’t abandon its responsibility to provide assistance, either directly in the form of financial assistance, or indirectly by assisting helping agencies.”Asked by John Lang, of Jardine Matheson Group, when the current account budget would balance, Ms Cox said: “The current account could easily be balanced tomorrow if we decided to do nothing and just stand fixed without any progression.“I think it’s easy to make it balance, but I’m not sure that is responsible. I don’t consider it a success of being a Finance Minister to have a balanced budget.”Ms Cox said Bermuda was still reeling from the effects of “the most severe recession we have expereinced in modern times”. About five percent of the workforce had lost their jobs, she added.According to the National Economic Report 2010, 1,425 jobs were lost in 2010, based on preliminary results from the 2010 Employment Survey. This left the Island’s jobs total at 38,095 in 2010 down by 2,118, or 5.6 percent, from the peak employment number of 40,213 in 2008. According to the report, non-Bermudians accounted for 60 percent of the jobs lost last year.“It’s crucial that policy adjustments are made to avoid weak job growth and persistent unemployment for some time to come,” she said. “Increasing employment is the only sustainable solution to reduce inequality and poverty.”The Government’s aim was to stimulate job retention and creation, she said. The payroll tax rollback constituted part of this effort. Payroll tax relief would continue for apprecticeships in approved training schemes, she added.One of the listed questions from Chamber members submitted to the Premier and Finance Minister concerned the statutory debt ceiling the legal limit on what the Government can borrow and when it would be raised again, following its 25 percent rise to $1.25 billion in 2010.Ms Cox said it wasn’t necessary to further raise the ceiling, because the projected public debt at March 31, 2010, was $1.175 billion, $75 million below the current limit. Under current definitions, the Budget for 2011/12 would breach the debt ceiling. However, this will be avoided by changes in the way that the ceiling is recognised under the law.“Currently, Government guarantees are charged against ther debt ceiling, despite the fact that they are contingent liabilities to the Government,” Ms Cox said.“That treatment is contrary to how they are accounted for in the financial statements of the Consolidated Fund. Accordingly, to include debt guarantees against the debt ceiling is illogical. Legislation to correct this anomaly was tabled on Friday.”Such guarantees include that on the $200 million Butterfield Bank preference share issue.Ms Cox answered another question about the possibility of privatising some public services. This was being examined as part of a review of the Civil Service, she said.“The Civil Service review gives us an opportunity to look at how we’re doing things in Government and what we can do to make it better, to have enhanced efficiency,” Premier Cox said. A review had first been launched under the Premiership of Dame Jennifer Smith, she added, but had been stalled by other initiatives.“We thought that after a change of administration, this was a good opportunity to reset the dial,” she said. “It’s an opportunity to look at things differently and whether we should be doing some of the things we are doing.”The review would also help to emphasise accountability, transparency and proper appraisal management within the Civil Service, she added.She added that Government had increased revenue in spite of the recession, from $917.3 million in 2009/10 to $977.2 million in 2010/11.“In spite of the recession there were increases in passenger tax of $3.2 million, foreign currency tax of $12.2 million, hotel occupancy tax of $2.2 million, Immigration receipts of $6.1 million, international company fees of $8.4 million, telecommunications receipts of $0.8 million, aircraft registry receipts of $4 million and payroll tax of $51 million,” she said.“While payroll tax will certainly be reduced, the estimated revenue of $940 million for 2011/12 is certainly a conservative figure that can be achieved.”