Hayward warning: Reform immigration or fall off fiscal cliff
Major immigration changes are needed to stop the island from “falling off the fiscal cliff”, the Labour and Immigration Minister said today.
Jason Hayward warned that the island had to use immigration to create economic growth in the face of an ageing population and shrinking workforce.
He added: “If Bermuda is going to better her fiscal situation, we must all embrace the bold steps needed to confront the situation.”
Mr Hayward said the labour ministry was looking at the creation of an economic investment certificate, which would allow people “to reside in Bermuda while contributing to the economic development of the island”.
He highlighted the Government’s Throne Speech pledge to “normalise” the position of long-term residents who “consider Bermuda their home, but cannot call Bermuda home”.
Mr Hayward added: “Additionally, the Immigration Reform Working Group will be looking to consider issues surrounding Bermuda status.”
He said the Government also wanted to change policies that required Bermudian parents to prove domicile for children born overseas to make it easier for them to obtain Bermudian status and move to the island.
Mr Hayward added the Government would also continue with the one-year work from Bermuda programme, which has had more than 500 successful applications.
The scheme sparked interest from several companies that signalled they wanted to start up operations on the island.
The maximum stay for visitors has been also been extended from 90 to 180 days.
Mr Hayward said: “These initiatives may be considered bold to some - however, maintaining the status quo will undoubtedly bring about an untenable situation for Bermuda and her people.
“These proposals provides immediate solutions to addressing Bermuda’s declining financial position whilst other tools, such as increasing the birth rate or diversifying the economy, require significantly more time to reach a sustainable level.”
Mr Hayward added Bermuda’s declining birth rate and ageing population were expected to cause the workforce to contract.
He said that an “exodus of many work permit holders” had worsened the situation.
Mr Hayward added: “The implication of this ageing population will result in increased financial burden on the Government, further exacerbated by the decrease in the number of working people.
“As we know, a high number of skilled and talented workers who contribute to the economy by way of paying taxes, paying rent and purchasing houses benefit the economy.
“In that vein, the aim of immigration policy is to increase opportunity for Bermudians and to help improve Government’s current fiscal position.”
Mr Hayward said that the island was in serious financial trouble and the 2021 deficit of $295 million was not sustainable.
He also gave an update on the Wage Commission, chaired by Cordell Riley, a former Government statistician and academic, which is still at work to determine the level for a living wage.
Mr Hayward said a report on a proposed minimum wage would be completed by the end of next month and a second report on a living wage was expected in the next financial year.
He added that the Government would draw up legislation on a statutory minimum wage and a national living wage after the reports were in.
Mr Hayward said the move would help support families who struggled because of wages that are too low to cover basic living costs.
He added: “Bermuda’s high cost of living and decades of stagnant wages gives an even greater need for the establishment of a decent wage rate.”
Mr Hayward said his ministry was also gathering information for a proposed revamp of the unemployment insurance programme.
Interested parties have to provide their views by February 8.
Mr Hayward added: “At this time, only the Government makes contributions to the unemployment insurance fund to maintain its existence.
“Since March 2020, the Government has paid more than $58 million in unemployment benefits.
“This level of expenditure by the Government is unsustainable, and unemployment insurance programmes supported by additional funding – by employee and employer contributions – is being considered, reducing the burden on the Government and ensuring that funds are readily available when needed.”