A panel of economic experts gave us their views on yesterday’s Budget.Nathan Kowalski, CFO Anchor Investment ManagementThere are five themes that one could highlight from the Budget release:1. There was a pervasive call for “unity” and “shared sacrifice”. This is important because it is very unlikely that Bermuda will overcome the escalating costs that are driving decreased global competitiveness without lowering various cost structures from labour to capital.2. The projections look dire, however, they are likely prudent and may be even overly conservative. This is critical as it brings into focus Bermuda’s escalating debt and engages the nation’s goal of “slowly turning the ship”. It also provides some credibility to the budgeting process so, hopefully, any future negative revisions will be eliminated. The first step in solving a problem is recognising that it is a problem and quantifying it.3. A large part of next year’s deficit is uncontrollable at this stage. The new Government has inherited many capital projects and a run-rate cost basis that will take time to adjust. It is heartening to see that the problem is acknowledged but that drastic austerity, which would likely cause undue economic hardship, has not been implemented.4. It is clear that more debt issuance will need to be done. These future issuances, in our opinion, should be focused on locally sourced Bermuda dollar debt issues that are held by domestic companies and residents, not foreign entities. This improves the stability of the debt profile for Bermuda and reduces increasing foreign reliance.5. The Budget also includes steps to make Bermuda more inclusive. We have often noted that population growth directly effects GDP growth. Policies like the removal of term limits and making property more affordable for foreign owners may help stabilise the Island’s population loss and may even help with growth.Cheryl Packwood, Business Bermuda CEOIt is clear that Government understands the challenges they are facing and the key drivers of Bermuda’s economy. They have offered a budget that is realistic, prudent and sensible. It invests in the growth and development of international business which should be beneficial to the jurisdiction over the long-term. Bermuda is well-positioned and with the right support and right focus we can navigate through this difficult economy and return to real prosperity and growth for all Bermudians.Peter Everson, co-chair of the Chamber of Commerce Economics Committee1. This Budget marks a step change from those in recent times. A clearly articulated analysis of the current macroeconomic position and the key drivers to this sad picture set the foundations to a medium term plan to move the Country forward.2. The Chamber is pleased to see that many its objections to previous Budgets have been heard. In particular the growth in the size and cost of the public sector has now been given official recognition as a primary driver in the current account deficits.3. The initial steps in terms of ending job losses and commencing the rebuilding process have been taken in this Budget. In particular, the payroll tax holiday for new Bermudian hires should provide the type of short term stimulus that has hitherto been lacking.4. One facet not enunciated in the speech was that the local economy is struggling to meet its debt servicing costs. This has shown up in the quarterly reports from the BMA which show that ten percent by value of all loans are non-performing. The immediate and longer term lowering of the licence fees payable by foreigners on the purchase of Bermuda real estate will encourage the introduction of foreign capital and will provide much needed relief to Bermudians and the banking sector. More may be needed if this proves insufficient.Malcolm Moseley, LOM CFOThe public sector borrowing requirement for 2013/14 is budgeted to be a staggering $331 million. This is a sad reflection of the historic mismanagement of the public purse over the last five years but I believe this will turn out to be a “tipping point” for Bermuda.I think we are seeing for the first time a realistic report on how bad the public finances have become and it is only at that point you can start to address what needs to be done. Given that the current Government only took over the reins of power in mid-December I would expect an ongoing spending review of the 71 departments it has inherited and that significant savings will be identified to ensure that the expenditure in the Budget is not only achieved but surpassed.The payroll tax holiday for a new Bermudian hire can only help in the quest for creating new jobs for locals while at the same time helping relieve some of the pressure on local businesses feeling the pain of recession.The cut in licence fees for non-Bermudians purchasing property is also a sensible change that will give a much-needed boost to the property sector. It also sends the message “Bermuda is open for business”. A significant but vital challenge for the Government going forward will be to address the growing component of the national expenditure that is non-discretionary.Tom Miller, PwC partnerIt’s a Budget that recognises the seriousness of our fiscal situation, while taking actions to make the Island more competitive and stimulate foreign investment, and still meeting the immediate needs of Bermudians.As presented, the Government’s deficit management plan balances the need to stimulate growth and create jobs while cutting spending and increasing revenue.