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Government savings ahead ... but at what cost?

Economist Craig Simmons is calling on the Bermuda Government to appreciate the pain ahead for people as it prepares for a likely tough year of union negotiations.

Mr Simmons warned the Government could not make necessary debt reductions without restructuring the Civil Service — a move threatening devastating job losses that would spark fierce protests from unions “who have reason to fight harder than the government negotiators”.

In a wide-ranging economic assessment for The Royal Gazette to mark the end of 2015, the Bermuda College lecturer also reflected that, while the Island was now out of recession, working-class people remained in a period of struggle, adding: “It is difficult to see how life for the average person could have improved over last year.”

On the Government's commitment to cutting debt, Mr Simmons said: “The necessary reduction in spending cannot happen without a restructuring of the Civil Service.

“The number of ministries and departments will have to be reduced, consolidated or eliminated altogether and the provision of government services rebalanced — some will need scaling back while others will need expansion.

“These are the hard economic facts. But humans, just like you, will be negatively impacted by these changes. The Government doesn't appear to appreciate fully the fact that for many, the pain, suffering and uncertainty that accompany job loss is devastating — equal to that of a divorce.

“Restructuring cannot happen without buy-in from the various unions.

“As it stands now, the unions have reason to fight harder than the government negotiators, who have considerably less, if anything, to lose.

“Difficult conversations must be had and compromises made on both sides.”

Bermuda's gross domestic product has grown for three successive quarters and monthly retail sales have also increased, while the Government has also pointed to potential job growth and booms in construction and tourism ahead of the 2017 America's Cup.

However, Mr Simmons said the GDP rise was thanks to rising salaries in international business, adding: “Working-class people have struggled to stay employed.

“Until there is evidence of job creation, the sceptics are right to question or even deny the existence of a recovery.”

He also said he feared the Government had found a new way to “hide debt” by keeping the airport redevelopment plan off the balance sheet.

Tough times ahead: Craig Simmons says the Bermuda Government cannot make necessary debt reductions without restructuring the Civil Service - a move threatening jobs (File photograph by Akil Simmons)

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Published December 31, 2015 at 8:00 am (Updated December 31, 2015 at 8:29 am)

Government savings ahead ... but at what cost?

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