Junior Finance Minister backs some privatisation of government services
Junior Finance Minister David Burt suggested yesterday that Government should consider privatising some of its services in order to inject “much needed innovation” into the economy. He told the Senate that candidates for privatisation could include public transport, postal services, waste collection, waste treatment, and recycling.
But he cautioned: “Just because something has worked in another place in the world, doesn't mean it will work in Bermuda.”
Senator Burt prefaced his remarks by saying he wanted to “take personal leave to discuss some economic matters” he cared deeply about and later reiterated to
The Royal Gazette that he was not articulating Government policy.
He said the services he mentioned did not constitute an exhaustive list and proposed Government “take a broad view and consider everything”.
During his first Budget speech in the Upper Chamber, the Premier's chief of staff referenced how Tony Blair and New Labour introduced a new breed of politics termed the Third Way when they swept to power in the UK in 1997.
“This politics was meant to represent the radical centre, a mix between traditional Labour and Conservative policies to deliver for the citizens of a country,” he said. “One of the items that he pushed through was the partial privatisation of some government services.”
Sen Burt went on: “It will surprise no one when I say that governments are not known to be the most efficient organisations.
“It is my hope that, as the Government looks to open up the budget process and looks to medium-term planning, that we take a serious look at what government services may be able to be provided by the private sector in a more efficient manner.
“It is my belief that, as this Government considers all of the available options, there may be room for some government services to be privatised.
“Government must collaborate with our social partners in the unions and other stakeholders. We can do it in a way that provides secure employment for workers and ensures that their pensions and benefits are secure.”
He claimed the long-term benefit of a policy of deliberate privatisation of government services would be increased efficiency and a reduction in future pressure on public finances.
“The new entities will have a stable income stream that will allow them to expand and reinvest, thereby creating additional employment in our economy” he said. “The efficiencies created will lead to more economic activity and increased growth.”
The former Progressive Labour Party chairman said he did not believe the issue should be approached “haphazardly or insensitively” and warned: “The risk of damage to our economy will be great if we get it wrong.”
But he added: “Considering the risks, and with careful planning, it is my hope that we'll look at these items in the near future as a way of injecting some much needed innovation into our economy.”
In January, Bermuda Democratic Alliance's finance spokesman Michael Fahy suggested some government services should be privatised .
Mr Fahy said last night: “I find it interesting that, a few months later, people within the PLP are starting to say it. We also said that incentives should be given to those businesses in St George's and Somerset and we welcome the Premier's remarks that economic empowerment zones would be set up in St George's and Somerset. We welcome them taking on board these suggestions and are happy to contribute to the debate.”
Party chairman Mr Fahy said of Sen Burt's remarks: “Whilst he says it's a personal view, I think, given his ministerial portfolio, it's very difficult for him to separate, in the eyes of the community, a personal view versus a portfolio view.”
He said if the Junior Finance Minister backed privatisation, it should surely be a topic for discussion “within Government and a wider caucus”.
Mr Fahy suggested the loss-making post office was “ripe for possible privatisation or private investment”.
“At the very least it should be seriously considered,” he said. “Sen Burt is correct. It would be very important if we did go down this road to get it right and not to make an absolute mash up of it. [But] it is a way of increasing entrepreneurship in the Island. We have been saying in the BDA for some time that this particular area needs to be explored.”
Sen Burt responded: “The BDA should know that as a junior minister I cannot dictate and/or state government policy. I don't have a ministerial portfolio.”
He said yesterday's general economic debate gave all senators the chance to speak freely on the economy and put forward ideas. A spokeswoman for Premier and Finance Minister Paula Cox said last night that the focus of the 2011-12 Budget was on fiscal prudence and job preservation, not privatisation.
“There has been no decision taken by Cabinet to privatise services,' she said.
“The Government is keenly aware of the need to operate with greater efficiency and effectiveness.
“However, the aim is to enhance the existing processes, ensure we operate cognisant of the need to be judicious and ensure that the services we do deliver are at optimal efficiency.”