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Chamber president upbeat on speech

Speech addresses the people’s needs: John Wight

A top business leader backed the Government’s Throne Speech bid to help people who struggled with Bermuda’s high cost of living.

John Wight, the Bermuda Chamber of Commerce president, said the speech was right to focus on people caught in the gap between income and expenses. He added that reductions in taxes, energy costs, healthcare and mortgages were all covered — but pointed out that details have still to be provided.

But Mr Wight said that other “contentious issues” — such as the 60:40 rule designed to limit business ownership by foreigners — were not addressed.

He said: “The Throne Speech was largely directed at the many Bermudians who are feeling the economic challenges of today’s Bermuda.

“As we all know, the Bermuda Department of Statistics revealed that thousands of jobs were lost, largely in the 2010 to 2014 period, such that government revenues through payroll and other taxes declined significantly.

“Meanwhile, costs increased. This is not a sustainable model for any country.”

Mr Wight added: “While there has been some improvement in the job market recently, far more is needed.

“Many people either can’t find appropriate work, or have a job or jobs but are struggling with the high cost of living in our country. In the Throne Speech, Government prioritised addressing the needs of these people — as it should.”

Mr Wight, who emphasised he was speaking without referral to Chamber colleagues, said it was “not surprising” that taxes, energy, healthcare, and mortgages were identified as problems.

The Throne Speech said “substantive tax reforms” will be announced in the Budget statement next year but will begin with a change to the social insurance system from fixed-rate contributions to an income-based model.

Government added it planned to develop legislation that would give it more power to bring down the cost of energy and to offer more relief on mortgage payments. A national health plan is expected to bring down the cost of health insurance.

Mr Wight said: “While some information was provided in the Throne Speech, we will need to wait for February’s Budget to see the details of how Government intends to address them.”

He added: “On some matters such as tax reform, Government is likely to garner broader consensus — around developing the tax base to improve fairness and equity, for example.

“On others, such as addressing healthcare costs by pooling all residents into one pool, Government may encounter more challenge through the absence of a holistic view of the entire healthcare delivery and financing model in Bermuda.”

Mr Wight said he was generally “impressed with the tone of the speech” and that the Chamber and the wider business community looked forward to more details.

Mr Wight said: “I noted the omission of any reference to tackling some of the more contentious issues in the speech — issues that we must address. “For example, there was no reference to revising or eliminating the 60:40 rule.

“Bermuda needs to create more jobs as well as generate a steady flow of foreign currency.

“Where does Government stand on, for example, lifting the 60:40 ownership rule just within the City of Hamilton?

“This would be one way of encouraging new jobs and welcoming foreign investment.”

Cordell Riley, a statistician, also looked forward to more details on the Throne Speech proposals but said abolition of stamp duty on mortgage refinancing for amounts under $750,000 would be a “big bonus”.

The Throne Speech claimed local banks had “reaped immense profits” by imposing US interest rate increases on Bermuda’s mortgages, which lead to a “drain” of disposable income from hard-working families.

Mr Riley said lower mortgages would benefit the entire island.

He added: “It would be better to reduce the mortgage rates because you don’t end up with houses you can’t sell when you need to repossess someone’s house. I think it’s a win-win.”