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Arnold’s closures get political

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Three Arnold’s grocery chain stores are closing. Arnold’s Family Market in Pembroke is one of three that remains open (File photograph)

The Minister of Finance dismissed claims of payroll tax hikes yesterday after the owner of Arnold’s said increases contributed to the closure of three shops.

Curtis Dickinson said the rates shelled out by the grocery store chain were less last year than in 2017.

But Nick Kempe, the shadow finance minister, claimed that the closures were a warning to the Government that its fiscal policies were not working.

Frank Arnold, the company owner, earlier told The Royal Gazette that payroll tax doubled in the past year.

Mr Dickinson said yesterday: “The Bermuda Government can confirm that there has been no increase in payroll taxes in the past two years.

“Our records indicate that the Arnold’s grocery store chain paid less in payroll taxes in 2018 than they did in 2017.”

The finance minister said the Progressive Labour Party administration had focused on growing the economy and creating an environment for Bermudian businesses to thrive.

He said the Government had worked to make Bermuda’s tax system fairer to “promote an economy that works for all Bermudians”.

Mr Dickinson said: “I will remind the public that the most recent Budget was a ‘sensible’ budget with minimal negative impact on the broader economy.

“We have been very mindful of our fiscal situation and we were prudent about remedies we put into place to move us in the right direction.”

He explained that no new taxes were introduced and that the Government provided tax reductions to people earning less than $96,000.

Further measures included payroll tax concessions for employers who hired people with disabilities as well as new small business entrepreneurs and taxi operators, and a concession to businesses that hire local entertainers by removing employer and employee payroll tax for three years.

Other steps were set out to offer payroll tax relief to specific businesses.

Mr Dickinson added: “It is regrettable that three of the Arnold’s grocery stores are closing due to many factors.

“However, we are pleased that as a result of these closures no Bermudian jobs have been lost.”

Mr Arnold said yesterday he did not have his company’s payroll tax records in front of him but that — “to my knowledge” — he maintained that the costs had doubled over the past year.

In a notice to customers, he said that two stores in Somerset and one on Front Street were closed as of last Friday.

Mr Arnold wrote: “Regretfully, I have made the decision to close these three locations due to many factors, along with increased operating costs of running these businesses.”

Mr Kempe, a One Bermuda Alliance senator, claimed yesterday that the Government’s economic policies were not working and added “significant extra pressures” to businesses.

He said: “Frank Arnold’s statement saying that increased operating costs were a factor in his decision to close some stores is yet another warning to Government that they need to change course.

“The Government has pursued a one-track economic policy of fintech, which has yet to have any impact on the economy and while our GDP remains positive, driven by projects such as the St Regis hotel, the airport and the new Belco plant, the underlying statistics paint a very different picture for local businesses that employ Bermudians year in year out.

“Retail sales volumes have plummeted and the reinsurance sector has continued to shed jobs.

“At the same time, the Government has increased the cost of doing business — increased land tax, the new local company dividend tax, increased foreign currency purchase tax and the transfer of more cost to private health insurance have all negatively hit businesses.”

Mr Kempe also claimed that a lack of immigration reform added to “a very different and disturbing picture that is not being addressed by this government”.

He called on David Burt, the Premier, to seek a new economic direction.

The senator said: “The OBA understood — and still understands — the need to pursue a multitrack economic policy and we provided an economic stimulus while controlling government costs, but Burtonomics appears to be exactly the opposite.

“In the long-term fintech may produce some jobs, but how long can people wait? They are suffering now.

“Mr Burt has to take his blinkers off and show not only that he understands that his policies are not working but that he cares about the suffering imposed on Bermudians and changes course.”

Christopher Famous, a PLP backbencher, responded: “It is unfortunate that the OBA is celebrating the shrinking of a Bermudian business in a vain effort to score cheap political points and push their anti-Bermudian, ‘open up the immigration floodgates’ agenda.”

He said that Mr Arnold’s comment about payroll tax was “wholly incorrect” and added that the most recent increase in payroll tax was under the OBA.

Mr Famous added: “During their term in office, the OBA fought desperately to open the immigration floodgates as a solution to our economic woes, and despite that approach leading to protests and their complete and utter rejection at the polls, they continue to push an agenda that Bermudians reject and that Bermudians know will see our people further marginalised in our own country.”

He said that the party was committed to fair immigration reform that protected Bermudian jobs and opportunities, taking account of the country’s history and size.

Mr Famous said: “It is unfortunate that the Arnold’s group has found the need to close three of their stores.

“However, for the owners to misplace the blame, and for the OBA to jump on this for political gain, is also unfortunate.”

Curtis Dickinson, the Minister of Finance (File photograph by Blaire Simmons)
Nick Kempe, the One Bermuda Alliance shadow finance minister (File photograph)