Government deficit widens
Government spent nearly $276 million more than it took in revenues in the fiscal year ending March 31, 2011, according to accounts tabled today in the House of Assembly.
Current account expenses, which include non-cash items, were $1.27 billion. Current expenditure was $1.12 billion, or about $60 million more than Government had budgeted.
Revenue totalled $996.7 million, some $60 million short of what Government had projected. This represented an increase of $78.7 million (8.6 percent) from fiscal 2009/10 for which balances were restated due to changes in accounting methods used.
The accumulated deficit stood at $1.29 billion by the end of March.
For the fourth successive year, Auditor General Heather Jacobs Matthews issued a qualified opinion on the audited accounts for the Consolidated Fund, based on her opinion that there were serious deficiencies in internal controls in the management of certain capital development projects. Her report has not yet been tabled.
“The Government recognises that the Auditor General’s recommendations provide the opportunity to refine and enhance Government processes,” said Premier and Finance Minister Paula Cox.
“The Government will work with the Auditor General and take the required steps to ensure that this qualification is removed in the future, in the same manner we did when actions were taken on qualified accounts in 2000 and on other previous occasions”.
The accounts revealed that total employee costs were $599.7 million, or 47.1 percent of total expenses, compared to $577.4 million in the previous year. Included in this amount is $151.6 million of “non-cash retirement benefit expenses”.
Grants and contributions expenses were $277.1 million, while professional services were $119.1 million.
Interest payments on Government’s long term debt was $58.7 million, compared to $35.1 million a year earlier.
“There is no doubt that the global recession is having a negative impact on Government finances worldwide and Bermuda is not unique in facing the economic challenges that are being faced globally,” Ms Cox added.
“I wish to assure the public that the Government is sensitive to the challenges which may arise when deficits reach short term peaks, however the Government is moving ahead with a credible plan for medium-term fiscal consolidation in order to reduce public debt and to keep the country on a sustainable fiscal path.”