OBA: ‘what planet are Cabinet ministers living on’?
Cole Simons, the One Bermuda Alliance leader, has accused the Government of being “detached from reality” in the wake of three damning economic reports.
Mr Simons asked what planet Cabinet ministers were living on when they predicted economic growth of up to 4.5 per cent, when the World Bank is warning of a global recession.
He was speaking after a study by Narrative Research Bermuda showed that consumer confidence had slumped to its lowest level since the first wave of the Covid-19 pandemic in June 2020.
Another report from the firm found 71 per cent of people questioned said they had been going without or cutting back because of the cost of living crisis.
While 60 per cent of people said paying for their retirement was a financial concern, with 42 per cent citing health insurance costs and 54 per cent naming being able to buy healthy food as a worry.
A survey by the Chamber of Commerce revealed that just one third of businesses are confident in Bermuda’s economic future.
Mr Simons said: “It is time for the Government to take a good hard look at reality and get serious about doing something about it.
“The Minister of Economy and Labour, Jason Hayward, stated that he sees Bermuda’s economy as positive.
“Clearly, Mr Hayward is looking through rose-coloured glasses as the Business Barometer Survey, the World Bank and the International Monetary Fund paints a vastly different picture for 2023 economy.
“There is a definite disconnect between what the minister sees and respected global financial institutions.
“The minister stated that he expects an economic growth of 2.5 per cent to 4.5 per cent for Bermuda in 2022-23.
“What universe is he living in when the head of the International Monetary Fund said that we should expect one third of the global economy to be in a recession in 2023?
“In addition, just days ago, the World Bank also confirmed their expectation of a recession.”
"Reading the report, I was encouraged that 64 per cent of businesses are confident in their business' economic future and over half indicated their financial position had improved over the past year, with only 11 per cent reporting they are worse off.
"Also, with businesses expecting to increase staffing levels in the next year, the government will continue working with all stakeholders to ensure Bermudians receive the necessary training to fill as many roles as possible.
"While this was good news, the Government recognises that many businesses operating in Bermuda reported ongoing challenges around staffing and increased operational costs impacting their bottom line.
“While the global economy continues to recover, Covid-19 and the war in Ukraine remain with us, causing supply chain issues that drive up inflation and the cost of doing business.
"To address this, the Government continues to offer relief through payroll taxes, customs duty, and loans to help businesses overcome these financial challenges.
"Another concern is the reduced customer base, which correlates to decreased revenues. The ministry continues to implement policies that will encourage the growth of Bermuda's population.
“Coupled with efforts around strengthening Bermuda's tourism product, I am confident the customer base and profitability will soon return.
"To that end, the Government predicts annual growth between 2.5 per cent and 4.5 per cent for 2022, which we expect to bring Bermuda close to 2019 economic levels.
"As we advance, the Ministry of Economy and Labour will continue working to implement effective policy solutions that address the challenges raised in this report. I am confident we are on the path to building a better Bermuda for all."
Mr Simons expressed concern about the impact of prices on people.
“There has been a steady decline in consumer confidence over the past two years, with people fearing not being able to afford health insurance, buy healthy food or pay for their retirement.
“While on retirement, let us not forget the underfunded position of our government pensions which is in the billions of dollars.
“Due to the cost of living increases, 71 per cent of people surveyed say they are now going without or have had to buy less to survive.
“And sadly, the number of applications for financial assistance continues to grow at an unsustainable rate, as more than 2,250 people now depend on Government for financial assistance.”
Mr Simons warned it was time for the Government to realise its economic recovery plan was not delivering.
“Only one third of businesses are confident in Bermuda’s economic future.
“Their biggest concern is the cost of doing business and supply chain issues, which are reported to have significantly worsened in the last 12 months.
“While three quarters of respondents stated that their business premises costs have increased, one fifth state that they anticipate moving in the coming year.
“We note that by far, reduced profit is the greatest impact experienced by businesses because of rising inflation.
“While the Government has its economic recovery plan – the communication of its content is extremely poor among businesses.
“Only 41 per cent of those surveyed are aware of the plan, and of that 41 per cent – 82 per cent are neither supportive, somewhat unsupportive, extremely unsupportive of it.
“Two years ago, when the PLP crafted their economic recovery plan, they boasted some 29 initiatives – in 2023, with our economy failing, 80 per cent of the plan has not materialised.”