Above: Bermuda
By the Caribbean Journal staff
Bermuda Finance Minister Everard T (Bob) Richards said he has “looked under the hood” of the territory’s finances, and is vowing to make major changes in the way the territory manages its finances.
“It is clear that the state of government finances is every bit as bad as we had feared might be when we were on the outside,” said Richards, whose One Bermuda Alliance won the territory’s elections in December. “The trajectories of deficits and debt we found are simply not sustainable.”
Richards pointed to Bermuda’s debt, which is reportedly rising at a rate of 23 percent per year.
“We can no longer tolerate the budget-busting practices of the past,” he said. “We cannot continue to use the global economy as an excuse for our own failures to properly manage the public purse — major changes have to be made in the way we approach the handling of public money.”
He urged a series of new measures, including greater budget discipline, better reporting by Ministries on their expenditures, the creation of a Budget Implementation Group, a new set of rule and limits on government debt and expenditure, and “shared sacrifice” on civil servant employee compensation, although Richards said the OBA would keep its promise not to lay off any civil servants.
“The inescapable reality is that Bermuda’s present economy cannot carry the government as it is presently structured and sized without implementing crippling tax increases,” he said. “Your government does not want to go this route — rather, we will focus our maximum efforts to streamline and deregulate the economy and implement the stimulus measures that we outlined in our Jobs & Economic Turnaround Plan.”
The immediate need, he said, was to “grow the economy in ways that increase the amount of job-creating dollars in the economy and therefore revenues to government.”
Richards said that further borrowing would be required, however, with a need to raise the debt ceiling.
“A number has not yet been set, but it will be accompanied by new rules and plans to make it a meaningful ceiling, rather than a meaningless one that is ratcheted up every year,” he said.