Bermuda ranks as one of the most expensive places in the world to employ people and any increase in the tax burden announced in tomorrow’s Budget would give the Island’s international companies another reason to relocate jobs elsewhere.That is the view of Flagstone Re chief executive officer David Brown, who said that last year’s increase in payroll tax added more than $1 million to his company’s employment costs.He hopes to see Premier and Finance Minister Paula Cox announce Government spending cuts in the Budget to improve the fiscal situation, rather than increasing taxes.“You can’t keep squeezing business and expecting the Golden Goose to keep laying more eggs,” Mr Brown told The Royal Gazette in an interview.“The last Budget was very punitive to business. It was negative for our view of Bermuda and added more than $1 million to our employment costs.”While Mr Brown appreciates the need for the indebted Government to maintain important social programmes, higher taxes would be counter-productive for the economy as a whole, as they could cost jobs, he said.“The kind of work we do does not have to be done in Bermuda,” Mr Brown said. “We can do what we do here in many other places. We really have to be careful that we don’t make ourselves even more expensive.”International businesses have a choice of where to locate jobs and they regularly compare employment costs by jurisdiction. Switzerland and London, for example, though expensive locations, are both cheaper than Bermuda, Mr Brown said. But the economic downturn has helped to narrow the gap.“In the recession, some costs, like rent, have been going down, and pay rises have not been so big, so maybe that is helping Bermuda to be a little less uncompetitive,” he said.Flagstone, one of the wave of reinsurance companies to incorporate in Bermuda in the wake of Hurricane Katrina in late 2005, moved its holding company to Luxembourg last year, but maintains an underwriting platform on the Island, based in Church Street, Hamilton, where it employs more than 40 people. The company has offices in multiple locations around the world.“Deliberately, from the beginning, we only put the people in Bermuda who had to be here, because it’s an expensive jurisdiction,” Mr Brown said. “The jobs that we do in Halifax, Nova Scotia, and Hyderabad, India, for example, were never in Bermuda, so we didn’t have to move anything.”Mr Brown is unashamedly pro-Bermuda. An Englishman who came to the Island more than 28 years ago to work as an accountant for Ernst & Young, he has permanent residency status. He is also non-executive chairman of the Bermuda Stock Exchange.A former CEO of Centre Solutions (Bermuda) Ltd, he has seen the Island’s insurance business grow from humble beginnings into the global market it is today.“I think the days when Bermuda was the primary jurisdiction for incorporating a company are over,” Mr Brown said. “It’s still one of the best in the world, but it’s no longer the only place you can go.“What changed on the positive side is that until the late 1980s and 1990s, there was very little business in Bermuda and you had to travel to go and get it. Now you can sit in your office and brokers and clients will come to you. It’s an important market.“So even if you’re based in Ireland or Switzerland, you’d be foolish not to have an underwriting operation in Bermuda and you’d be missing out on a lot of business, particularly if you want to be in short-tail lines.”He believes the Island can continue its success as a leading insurance centre and also add to opportunities for local people. But a crucial ingredient in Bermuda’s future prosperity is ensuring that the overseas talent needed for the market to flourish is welcomed in.“These people generate training opportunities for local people,” Mr Brown said. “If you look at how many locals work for exempt companies, some of them in very senior jobs, that would never have happened if you didn’t let in the expatriates to provide training for them.”Mr Brown added that he was not advocating “letting people in wholesale”, but he believed that talented employees who could contribute to the market were actively encouraged to come. Companies looking to add lines of business and bring in people from overseas should be encouraged, he said.Work permit time limits did not encourage talented staff to come to Bermuda, especially when other jurisdictions could offer them more stability in the long term.“Take our CFO [Patrick Boisvert], for example,” Mr Brown said. “He can do his job anywhere. He used to live in Bermuda and he now lives in Switzerland. In Bermuda, he had no chance of becoming a citizen, because of our immigration rules. He wants to build a life somewhere and a home.“The vast majority of non-Bermudians working in our industry don’t consider Bermuda their home. They know they’ll be here temporarily. So it’s very difficult to attract talented non-Bermudians to come here.”For Mr Brown, a native of Warrington in north-western England, there is no place he’d rather be.“I love Bermuda,” he said. “My kids were born here and I’ve lived here for most of my life. It’s a fantastic place with great people. I call it home.”