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Premier’s promise of balanced budget an ‘illusion’, OBA says

The shadow finance minister, Doug De Couto, has criticised unbudgeted spending by the Government (File photograph)

The Premier’s promise of a balanced budget is “nothing more than an illusion and PR exercise”, according to the Shadow Minister of Finance.

On Friday, MPs approved extra spending for the 2022-23 financial year of $6.7 million, caused partly by increased staffing costs in the Department of Corrections and the Department of Education.

Corrections officers were paid more than $1 million in overtime because of an acute shortage of staff, and the education department had to pay $2.6 million for substitute teachers to cover for annual leave, sickness and work on education reform.

At the time, the One Bermuda Alliance asked what assurances could be given that no more supplementary estimates would be needed for the 2023-24 financial year.

In a statement yesterday, shadow finance minister Doug De Couto said: “These estimates describe unbudgeted spending that require the approval of Parliament.

“They are the third set of unbudgeted supplementary estimates for 2022-23, including $45.5 million presented a year ago.

“All Bermudians and taxpayers should be incredibly concerned about this regular unbudgeted spending by the Government.

“It’s an example of why the Premier’s recent self-styled ‘balanced budget’ is nothing more than an illusion and PR exercise.”

OBA is wrong yet again — Premier

The Premier issued a strong rebuttal to the OBA claims last night, saying: “An Opposition desperate for relevance, but once again wrong on the facts.”

David Burt added: “Last week, the Opposition said there was no schedule for the House of Assembly, and they were wrong. This week, they are claiming $45 million of additional spending, and they are wrong again.

“The facts are that total expenditures for April 2022 to March 2023 were only $5.1 million more than budgeted, a difference of 0.5 per cent. This additional spending was achieved despite $15 million of unexpected Covid-related expenses and $15 million of additional funding to support the hospital.

“Bermudians may ask, why was the Government only $5 million over budget, with all the extra funding needed to support business and our healthcare sector during a public-health crisis?

“The answer is simple: we were able to make savings in other places. Despite additional spending in some areas, we made significant savings in other areas.

“What the Opposition will not say is that the budget deficit for the financial year 2022-23 was $35 million, or 50 per cent lower than budgeted, meaning that in 2022-23, government finances were in far better shape than expected.

“This budget performance is the reason why we were able to keep government-mandated health insurance premiums frozen for the third year in a row, saving every policyholder in Bermuda $540 this year.

“This misleading statement from the Opposition fits a pattern where they desperately try to mislead Bermudians as they are worried that voters realise that this government has been able to steer the country through a pandemic followed by 40-year high global inflation while beating budget expectations.

“This is in stark contrast to the Opposition’s record of over $250 million taxpayer dollars lost to the failed Morgan’s Point guarantee and the no-bid privatisation of Bermuda’s airport.

“Instead of listening to the continued misleading claims from the Opposition, voters can take heart that there are reputable global bodies, with no political affiliation, who have analysed Bermuda’s economic performance and have come to their own conclusions.

“The most recent example is Standard and Poor’s, who affirmed Bermuda’s A+ rating last week and said, ‘We believe continued growth will support a balanced budget in line with the Government’s expectations this year’.”

Mr Burt added: “Bermudians should not be misled by the Opposition, who have zero credibility on financial matters, and should take comfort that government finances are improving as this government delivers Bermuda’s first balanced budget in 21 years.”

Dr De Couto added: “Prior-year unbudgeted spending is a direct result of Government’s failure to plan, causing massive expense overruns, such as managing staff costs and overtime for teachers, prison officers and firefighters, and paying for the hospital.

“As the Government has shown no change in their approach, we fully expect similar large cost overruns for the current year.”

He said the “one bright spot” of supplementary estimates was that because spending overruns were related to the Budget, the Government was required to bring them to Parliament for approval.

“This allows the people of Bermuda to scrutinise how Government is spending their money,” said the senator.

However he also cautioned: “Under the newly passed Government Loans Amendment Act, the Premier and finance minister will be able to directly access money in the Sinking Fund, bypassing the legislative and budget process.

“This will effectively let the finance minister hide expense overruns like these from the public, as many quangos and related bodies are years behind in presenting accounts, never mind audited accounts.”

Dr De Couto added: “The Government’s casual approach to financial accountability is why the One Bermuda Alliance has repeatedly called for legislative guardrails on how money like the hoped for Corporate Income Tax revenue is used.

“The OBA believes that the people of Bermuda deserve to know that their money is being spent effectively, and with accountability.”

In the Budget this year, David Burt said the Government should expect to receive at least $750 million a year, on average, from the new corporate income tax.

The shadow national security and education minister, Ben Smith, also took aim at the Government's spending, saying its “inability to budget effectively is negatively impacting lives of many Bermudians”.

“We debated the extra $1 million that was to cover overtime for the Department of Corrections,” Mr Smith said.

“While this happened during the 2022-23 fiscal year, it reoccurred in 2023-24, with the Opposition pointing out during the 2024-25 budget debate that the problem is continuing.

“The national security minister explained that there is a shortage of eligible Bermudians to qualify for this important job, and with retirements the workers are having to cover with overtime.

“Although the extra pay is probably welcomed by the officers to cover the high cost of living, there is a downside to stretching our workforce so thin.

“Corrections is a stressful job, and the mental and physical health of our officers needs to be considered.”

During the debate on Friday, Mr Smith asked whether an analysis had been carried out on the impact of the staff shortages, with the minister replying that one had been done.

“There doesn’t seem to be a plan to rectify the issue for officers. We need to consider their quality of life after they have been in this cycle of excessive overtime,” Mr Smith added.

“What happens when officers break down and we don’t have enough to efficiently run an already stretched service?

“If Bermuda cannot find the adequate number of officers needed, what is the minister’s plan to release the pressure on the service?”

On the spending for substitute teachers, Mr Smith claimed that during Friday’s debate Diallo Rabain, the education minister, tried to shift blame on to the Commissioner of Education.

“With close to $3 million in payments for substitute teachers to be accounted for from 2022-23, what is the plan going forward,” Mr Smith asked.

“There was a substitute shortage in 2023-24, and now we have reached the critical stage in 2024-25 that is impacting schools being able to open.

“When the minister removed teachers from the classroom for reform duties, he didn’t know they needed to be replaced by substitutes? Now the excuse is the increase in personal days that teachers have been given.

“How could there be no plan for an increase in substitutes? Now teachers are being burnt out and anxiety heightened by impending school closures and jam-packed school days.”

Mr Smith added: “The lack of planning keeps causing disruption and the excuses keep growing.

“In 2025 we will probably have overdue supplementary funding again to cover up for the lack of planning. Our teachers, students and correction officers deserve better.”

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Published May 20, 2024 at 7:59 am (Updated May 20, 2024 at 7:44 am)

Premier’s promise of balanced budget an ‘illusion’, OBA says

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