The Pre-Budget Report that went out for public feedback on Thursday got a guarded positive review from the One Bermuda Alliance, with Douglas De Couto, the Shadow Minister of Finance, saying it “shows steps in the right direction”.

However, he maintained that the prelude to the 2026-27 Budget, to be delivered in February by David Burt, the Premier and Minister of Finance, was “not nearly ambitious enough about taking care of Bermuda’s future generations by reducing Bermuda’s debt while we have corporate income tax money”.

Mr Burt released the document last week, along with the Fiscal Responsibility Panel Report for 2025, to give “a clear view of the local and global factors” shaping economic policy.

Mr Burt extolled the $29 million budget surplus recorded in the 2025-25 fiscal year as the first of its kind in more than 20 years. The Premier said it had been achieved while “staying true to our mission of fairness”, adding that another surplus was expected for the present financial year.

He also proposed targeting 70 per cent of net CIT revenues, over three years, to “paying debt interest, reducing net debt or accumulating net financial assets”.

Dr De Couto responded: “The One Bermuda Alliance repeats its call to use the CIT funds to pay down Bermuda’s massive debt, repair critical infrastructure and to support those most in need with targeted social support.

“That’s why we originally proposed to amend the CIT Bill two years ago in 2023 to dedicate CIT money to those purposes.”

Dr De Couto referred to the OBA’s unsuccessful move to secure the legislation as directing the new taxes revenues solely for debt relief. Because it was classed as a “money” Bill, the amendments were not permitted in the Senate.

The Warwick North East (Constituency 25) MP said at the weekend: “Government claims to be focused on paying down debt, but doesn’t even plan to pay the full $605 million of debt due in January 2027. Actions speak louder than words.

“As highlighted by the Tax Reform Commission and the Fiscal Responsibility Panel, CIT income is ‘highly uncertain’. While this year has been relatively good for the insurance industry, we should not bet on CIT income we might not receive in the future.

“For example, as reported by The Wall Street Journal, this year was the first time in ten years that no hurricane hit the US East Coast. No hurricane losses means more profit for insurers, and more CIT income for Bermuda.”

Dr De Couto said that even as insurance companies pay into Bermuda’s CIT regime, the corporations are also major contributors to payroll tax, “including the increased payroll tax revenue that boosted Government’s reported fiscal performance”.

“It’s easy to see how a bad year for the insurance industry is a double whammy for Bermuda: less CIT money, at the same time as less payroll tax as companies pay smaller bonuses, don’t give pay rises or even cut workers.

“That’s why it’s important to reduce debt as quickly as possible: to get rid of the annual $128 million in interest payments, so that money can be used for better purposes.”

He also accused the Government of engaging in “sleight of hand” with the surplus for its most recent fiscal year, saying $71 million of “borrowed money” had been spent off balance sheet, primarily on healthcare costs.

“Now that the borrowed money has run out, Government is increasing everyone’s healthcare premiums to cover those original cost increases, as well as even more increased funding for the hospital.”

It followed a warning from Mr Burt last week that several years of a government-underwritten freeze on the standard premium rate would not be able to continue, with a significant payout to hospital staff negotiated last month and due by the end of next April.

Dr De Couto added: “Meanwhile, Government has failed to truly reform our healthcare system and reduce the underlying costs. This is a slap in the face for Bermudians who are being promised tax breaks by the Government with one hand while it reaches into their pockets with the other hand for healthcare costs.

“Government claims to increase the fairness and progressiveness of the tax system, but is planning blanket tax breaks for Belco bills and vehicle licensing. These tax breaks are regressive and will put more money back into the pockets of wealthier people: those who can afford bigger cars and bigger houses with large Belco bills.

“While those tax breaks make nice political gifts, the OBA proposes a more targeted system that helps those most in need the most. For example, by linking to a person’s payroll tax bracket.”

He said the OBA “strongly” supported the more conservative stance of the Fiscal Responsibility Panel, which recommended putting “certain fiscal guardrails into legislation to make sure the CIT money is used to the best benefit of future generations, not short-term political gain”.

He added: “There will be a lot to discuss in February’s Budget debate. Let’s hope that unlike last year, the Government is actually willing and able to engage on these topic of critical importance for our future.”