MPs clashed last night in the House of Assembly, as legislators grappled with the sweeping recommendations of the Spending and Government Expenditure (SAGE) Commission.

Their debate skirted specifics, but underscored a deep partisan divide over cutting spending versus growing revenue — as well as the implications of privatising Government services.

If Bermuda didn’t cut its annual spending of $1.1 billion, debt would tower to $3 billion in four years, according to Finance Minister Bob Richards — while Shadow Minister David Burt charged that following all the SAGE report’s recommendation constituted “a road to economic ruin” that would weaken workers’ rights.

Launching the debate, Mr Richards told MPs that the Progressive Labour Party’s approach to the Island’s economic woes, of eschewing cuts and “concentrating solely on growing revenues” was “just not realistic — it’s a fantasy”.

The One Bermuda Alliance MP said the situation demanded a basic change in the way that Government and its employees conduct their business.

Tackling the contentious issue of privatising and outsourcing, Mr Richards charged there had been “knee-jerk, hysterical rhetoric” on the matter, aimed at “inflaming peoples’ passions” and added that he had no intention of reviewing any of the SAGE report’s hundreds of recommendations during last night’s session.

But he said the “furore” over its recommended privatisation was misplaced, and the competitive impetus of the private sector could make services stronger.

“It’s the do-or-die element that makes private organisations and their managements constantly search for ways to improve,” he said, telling the House that Bermuda’s civil service culture has “outlasted countless Ministers”.

Mr Richards also said Government would consult widely before creating an implementation plan, before throwing the report open for debate by MPs.

Shadow Finance Minister David Burt rose to chastise the Minister for failing to address any of the report’s specifics.

“I have absolutely nothing to respond to — the Minister has basically equivocated,” Mr Burt shot back. “They had their time to lay out what their plan was, and they have chosen not to do it, and give us an economics lesson.”

SAGE cannot address Bermuda’s real problems of economic growth, Mr Burt told the House, because Government’s size, scope and structure didn’t cause the Island’s current financial woes.

“Our budget troubles are the result of economic troubles, and not the other way round.”

Saying that Bermuda “cannot cut its way out of this problem”, the PLP MP said cuts would only damage the economy further.

Attacking privatisation, Mr Burt likened it to the closure of the Lamb Foggo Urgent Care Centre as a move to “bust unions”, “promote a privatisation agenda” and roll back workers’ rights.

Mr Burt quoted a March 3, 2012 quote made by Mr Richards to The Royal Gazette, in which the then-Opposition MP told this newspaper: “Privatisation is not part of our plan. We plan to revive this economy, to regrow Bermuda without looking at privatisation.”

“What a difference a year makes,” the Shadow Minister said.

He derided the Minister’s reference to “neutralisation” over privatisation, saying he only supported neutralisation “in its traditional context of employees having majority control”.

Tourism Minister Shawn Crockwell rose to attack Mr Burt’s assertion that applying SAGE would ruin Bermuda’s economy — charging the PLP with creating the economic blight.

The Commission was an independent body charged with providing an unbiased report, Mr Crockwell said, adding that there was no mandate saying everything had to be agreed with.

Turning to the report’s executive summary, Mr Crockwell said: “The reason why we’re here in this economic quagmire is we had an issue of annual expenditure exceeding revenues, starting in 2004.”

Agreeing Bermuda couldn’t cut its way out, he said Bermuda couldn’t “grow its way out either” — necessitating a combined approach, including tourism initiatives like well-regulated gaming, and increasing the Island’s population.

Mr Crockwell said SAGE’s recommendation that Cabinet be chopped from 13 to eight represented his own philosophical difference with the Commission.

Bermuda’s problems require “all hands on deck”, Mr Crockwell said, saying further cuts to their numbers would only increase the workload on other ministers.

Shadow Education Minister Walton Brown reiterated his opposition to SAGE, commending the report but saying generating additional revenue had to be included.

Mr Brown also characterised privatisation as an outright attack on trade unions, aimed at minimising benefits secured over decades of collective bargaining.

Saying members of the privatised Tourism Board would earn $20,000 a year, Mr Brown told the House: “That doesn’t sound like a cost saving to me.”

If services were privatised, and Government was confident that they could be run profitably, then “let Government be the shareholder”, he suggested.

Mr Brown also noted that SAGE hadn’t questioned the existence of the Senate — asking MPs to consider the question: “Is there a useful function of the Upper House in our bicameral legislature?”