A lack of cuts in spending to the Civil Service in this year’s Budget has proven a bone of contention for the Bermuda Chamber of Commerce, with president John Wight asking where was the shared sacrifice.

In a statement released last evening, Mr Wight said it was critical to start a national discussion on how to create more jobs in the private sector to help to reduce the size of a bloated government.

“Chamber members would find their sacrifice more palatable if Government were seen to have done more to share the sacrifice, by reducing the cost of the Civil Service,” he said.

“One issue that was not addressed in this budget, and which is critical to chamber members, is the need for a national discussion on how to create more jobs in Bermuda and the need to adopt laws that make it more attractive to start a business on island.

“We are concerned about facing a growing tax burden with limited prospect of real growth for many chamber members, which can come only if there are more people in Bermuda to whom they can sell our products and services, and the current residents have greater disposable income.”

Mr Wight said the chamber’s reaction to the Budget was “mixed”, noting that the Government had a difficult job in the face of economic challenges, but said he was encouraged that the economy was moving in the right direction. He highlighted many “unprecedented risks” that Bermuda faces as outlined by finance minister Bob Richards, including potential tax reforms under Donald Trump and Brexit.

“With a current debt of $2.5 billion, projected to increase to $2.8 billion at the end of the 2017-18 year, and a budgeted deficit of $135 million in 2017-18, achieving the Government’s objective of balancing the budget by the end of 2018-19 will be a challenging one. Citing the $500,000 daily interest cost on Bermuda’s debt certainly highlights how critical it is to balance Bermuda’s budget, and start paying down our debt, so that issues such as public education and care for the elderly can be funded for the benefit of the many Bermudians who need to benefit.

“Until the debt starts to get paid down, we will be challenged to do this.”

He said that shared sacrifice would be “essential” when the burden of increased taxes and new taxes is levied on individuals and companies. “Progressive tax reforms is a feature of the Budget which the chamber supports,” he added. “Those individuals earning more in our community should be paying a higher tax rate than those who earn less. This is fair and equitable.

“If all shareholders shared this burden, individuals and businesses would understand that each of us needs to do our part in achieving Bermuda’s critical financial goals. The caution that we have that must be monitored closely is any adverse effects that a progressive tax model has on international businesses, the key driver to our economy.”

Mr Wight said one area of concern was that the Budget would be inflationary, as those who initially benefit from paying lower payroll taxes, as well as the rest of Bermuda’s residents, will begin paying more for goods and services.

“Increased company payroll taxes and rolled-back tax concessions with restaurants and retailers mean that those businesses will have no choice than to pass on these costs to consumers, or reduce their workforce.

“The chamber is disappointed that 2016-17 Budget objectives to broaden the tax base, such as adopting a goods and services tax and addressing the self-employed, $40,000 notional tax base were not addressed during the past year and were introduced only in the 2017-18 Budget.”