OBA: economy in tatters and no clear recovery plan from ruling PLP
Bermuda faces “unprecedented” problems in the wake of the Covid-19 pandemic, the Leader of the Opposition warned today.
Cole Simons said: “Honestly, the next few years will be the toughest Bermuda has faced and the people are worried.“
Mr Simons said: “We are in a deep recession and there is no getting away from that.
“The signs of an economic demise were present before Covid-19 reached our shores.
“Our Gross Domestic Product was falling. Jobs were being lost and as a consequence Bermudians were electing to leave the island in the hope of a better future in the United Kingdom, the United States and Canada.
“These underlying issues are still present today. Nothing has changed. Covid-19 has exacerbated the further demise of our economy.”
Mr Simons was speaking in the House of Assembly as he delivered the One Bermuda Alliance’s Reply to the ruling Progressive Labour Party’s Throne Speech.
He said: “Bermuda’s economy was broken before Covid. It is on its knees now.”
He claimed the PLP had relied on former OBA government projects to boost GDP and create jobs.
Mr Simons said: “We have seen no meaningful action from the PLP – promises have been made and promises have been broken.
“We’ve seen scandals, political interference and a succession of ministers responsible for key areas such as immigration with no discernible progress.”
He added: “It seems that we are destined to further increase the size of our national debt which in turn will cripple our ability to put money where it is most needed – into social support networks, into stopping the violence and into improving the healthcare and the wellbeing of all Bermudians.”
Mr Simons said the OBA was proud of its achievements when in power and said its efforts were an “economic miracle” despite criticism.
The Opposition leader added: “World class events, new hotels and a new airport created wealth and new jobs for Bermudians.
“We attracted $1 billion of inward investment to Bermuda.”
Mr Simons said that the economic statistics for the second and third quarters of the year were not yet available, but that they would “likely be disastrous”.
But he said that there was some hope, as international business had continued to “tick over pretty well” despite the pandemic.
He said insurance underwriting rates were hardening and rising for the first time in 15 years and that there was a “major tailwind” behind Association of Bermuda Insurers and Reinsurers members.
But he warned that was unlikely to produce the influx of new businesses as it had in the past because companies now outsourced many back office functions overseas.
Mr Simons said that the answer to returning jobs to Bermuda was to make the immigration process “more accommodative” and “removing some of the bureaucratic red tape that stymies a more productive business environment”.
He added: “We must encourage government to get out of the way and convert this tail wind felt by Bermuda’s international insurance and reinsurance sector into more spending on island.
“It is the only tailwind we have at this time.”
Mr Simons said that immigration reform had been “a thorny and very emotional” topic for successive Governments and the people of Bermuda.
He added that the PLP was “finally seeing the light” after the OBA’s attempts to revise immigration law were hampered by “civil unrest in the community”.
Mr Simons said: “We are seeing the promotion of a number of reforms that the One Bermuda Alliance recommended, especially with mixed status families, as well as the idea of commercial immigration.”
He added that commercial immigration was at first proposed by Michael Fahy, a former minister responsible for immigration.
Mr Simons said that “our current government must grab the proverbial nettle and embark upon an immigration review which will create a pathway to residency and citizenship while, at the same time, protecting the interests of Bermudians and protecting Bermudian jobs”.
He added that proposed changes to banking law, including the establishment of a Bermuda base interest rate, could have unintended consequences.
Mr Simons said that the two major banks in Bermuda provided 75 per cent of loans and mortgages.
He explained: “If they are not on board with the Government’s proposals and if the prescribed base rates impacts their earnings and return on assets, these same banks will exercise their option and will quietly and drastically reduce their mortgage and loans portfolio footprint here in Bermuda.
“They will redeploy their assets and the availability of loans and mortgages to their branches, or subsidiaries in other jurisdictions.”
Mr Simons accepted that the PLP’s increased majority after the General Election, which won it 30 seats to the OBA’s six, was a “bitter pill to have to swallow”.
But he said the low voter turnout had sent “a crystal clear message that many people feel all is not well in Bermuda”.
Mr Simons added: “This Government must now deliver for the people. It must unite Bermuda behind a common cause – a promise of future prosperity for all.”
He pledged: “We will assist wherever possible, but we will not relinquish the role of an Opposition party which is to hold the Government to account.”
Mr Simons said later that the OBA, if it was in power, would include “addressing the immigration challenge” in its efforts to create a more positive environment for inward investment.
He added: “Every Bermudian knows that we cannot thrive without guest workers and without contributions made by our guest workers.”
But he “reserved judgment” on a PLP plan to require people who were granted the right to live in Bermuda to make economic investments in the island, or to invest in the planned Bermuda Trust Fund.
Mr Simons said: “Part of the immigration policy was, you can get a residential certificate as long as you don’t work, as long as you have the means to sustain yourself while in Bermuda.
“But to force them to make an investment is an interesting concept. In essence I think it would raise the cost of entry for a PRC or anyone wishing to reside in Bermuda who has the means.
“Those people have the means, they can go anywhere else so we have to be competitive as a jurisdiction.”
The Opposition leader added that priorities from his speech included the development of a National Seniors Strategy that would provide access to caregiver support for those suffering with Alzheimer’s and other forms of dementia.
He said that a National Physical Fitness Programme to encourage exercise, healthy diet and wellbeing from primary school and throughout life was also a primary concern as well as a system for police to investigate suspected domestic abuse, even when it was not reported by the alleged victim.