Finance Minister Bob Richards spent almost two hours presenting the 2015-16 Budget yesterday. His Budget increased Government revenues derived from taxes ($55.4 million, or 6.3 per cent compared with the revised estimate for 2014-15) and reduced spending ($33.8 million, or 3 per cent compared with the revised estimate for 2014-15).

At the end of the presentation, it was hard not feel that we are about to pay more for less.

The majority of the revenue increase is derived from Bermuda’s existing taxpayers and the Budget made no meaningful progress in broadening the tax base.

Almost all of the $55.4 million — $1,050 per person in Bermuda over the age of 20 — in “new” revenue will be passed on to consumers by business in the price of goods and services.

The $1.53 million increase in local telecommunication carrier fees will be passed on to the consumer. That is the equivalent of $24 per year per cell phone customer, assuming that everyone in Bermuda has one, including my six-year-old daughter, who does not.

The $15 per passenger departure tax rise represents a 2.5 per cent to 3.3 per cent increase in the cost of airline tickets between $450 and $600.

Based on the latest Department of Statistics survey, $2.2 million (40 per cent) of the $5.5 million in revenue from the increased airport departure taxes will be paid by locals.

Commercial property taxes will increase by 1.1 per cent and generate $4 million in additional revenue. Local and exempt companies will pay this increase and you can expect that local companies will ultimately pass on this cost to consumers.

The lion’s share of the increase in revenue comes from the payroll tax and customs duty increases.

The 0.5 per cent increase and a partial rollback of concessions will generate $17.6 million in revenue. The increases in customs duty will generate an additional $11.4 million in revenue. These taxes will be passed on to the consumer as the price of goods and services increase.

The expenditure side of the Budget has cuts to almost every ministry. It is too early to fully understand the impact of how all of the cuts will be achieved. Without question, services and programmes will be reduced.

Of particular note is the $5 million cut to the Department of Education; this is the one of the few departments where spending is an investment in our future success.

Additionally, the grant to the Bermuda Tourism Authority has been reduced by $1.4 million. This cut comes as we are trying to grow this pillar of our economy.

The elephant in the room, the total cost of the civil service, represents 52 per cent of Government’s total budgeted expenditure.

With four private sector employees paying for every one civil servant, many will criticise Mr Richards for not reducing this cost. In 2014-15, the Government employed 5,319 full-time equivalent (FTE) civil servants at an average wage of $74,446.

In the 2015-16 Budget, Government will employ 5,222 FTE civil servants at an average cost of $75,193.

The end of furlough days has increased the wages and salaries expenditure. Few in the private sector have had wage increases and many have taken wage cuts over the past few years. Is this what they mean by shared sacrifice?

I do not envy Mr Richards because he has had to make difficult decisions. Tax increases will reduce consumer spending. Justifying a tax-rate increase by comparing Government revenue to GDP is an oversimplified analysis that can lead to poor Government policies.

Bermuda must balance its budget and begin to repay debt. Larry Burchall talks about non-negotiable costs (NNC or Nanci, as he refers to them) and Mr Richards is talking about our second largest ministry that isn’t even a ministry. Either way, our debt-servicing costs are climbing.

In 2015-16, interest payments are budgeted at 12.6 per cent of total Government revenue, down from 13 per cent in 2014-15.

It’s a good thing we raised taxes, as now our interest payments seem more manageable.

• Jonathan Howes, the chief executive officer of Bermuda Press (Holdings) Ltd, is a chartered accountant