Budget was 'a plan to avoid a plan', says UBP
Shadow Finance Minister Bob Richards yesterday said every aspect of Bermudian life is at risk because Premier Paula Cox’s Budget failed to tackle the economic crisis.Describing her Budget as “nothing more than a plan to avoid a plan”, Mr Richards undermined Ms Cox’s claim she’ll stimulate the economy by reversing last year’s payroll tax increase.He said she had merely tried to “pacify rather than inspire” with an election Budget designed to keep people thinking all is fine, “even as the ground they are standing on is quaking”.In a lengthy and damning critique of Ms Cox’s first Budget as Premier, Mr Richards told the House of Assembly: “Bermudians must ask themselves if, in the present circumstances, they want a Government that avoids governing.“And they should do so with awareness that so much in our daily lives rests on a sound economy: career, home life, education, public safety, recreation and peace of mind.“Instead of careful planning, we are getting careful calculation. We say this is manifestly not the time to play politics. The Bermuda economy is in decline. Corrective action is needed now, not some time down the road, not some time after an election.”Last week, Finance Minister Ms Cox said a two percentage point decrease in payroll tax returning it to 14 percent would keep and create jobs and put $50 million back in the hands of taxpayers.Yesterday, Mr Richards argued last year’s tax increase had cost jobs, adding: “This year’s U-turn on the payroll tax for employers will not bring those jobs back. The damage is done. It was a terrible blunder.“It is doubtful the about-face on payroll taxes will have the effect the Minister intends.”He described the payroll tax move as trial and error, adding: “In Washington, it would be labelled flip-flop economics. Bermuda cannot afford this schizophrenic approach to fiscal planning.”Mr Richards reeled off a number of statistics he said should have prompted more serious action from Ms Cox, including:l public debt has doubled in a year to more than $1 billion, costing $180,000 a day on interest alone;l the current account deficit for 2009/10 was $83 million “an unprecedented number”;l gross domestic product contracted by 8.1 percent “a calamitous drop affecting all sectors of the economy”;l unemployment problems were highlighted when 835 people showed up for 155 jobs at last week’s jobs fair;l retail sales have fallen for 32 months in a row;l air arrivals are at the lowest point in more than 40 years, with the hotel sector “hanging by a thread”.“In the face of this economic crisis, we expected the Government to come forward with a plan to grow jobs, grow income and restore some level of public confidence that it understands what it is doing,” he said.“But it did not.”The Shadow Minister listed a succession of United Bermuda Party policies he said could turn Bermuda’s economy around by increasing foreign exchange in international business and tourism.These included removing red tape which annoys international business, reforming term limits, Ministers leading by example by taking pay cuts, tax breaks for low-income families and targeting Government spending at small businesses.“If we continue the way we are going, today’s troubles will seem mild by what would come,” he said.“We believe we are in the midst of a national economic crisis that calls for unshackled thinking to find a way forward for the Country. The Premier’s Budget Statement has none of that.”Mr Richards also said Ms Cox was trying to blame Bermuda’s difficulties on the global recession, but argued she had played a part in the Island’s downfall.“This is what happens when a country has poor financial leadership, leadership that is inept and lacking vision and intestinal fortitude,” he said.“The inability to recognise deteriorating trends before it was too late. The lack of strength to say no when capital projects spin out of control.“The hear-no-evil, see-no-evil posture in the face of blatant abuses of internal checks and balances abuses that have cost taxpayers many millions of dollars. The raising of taxes and fees at precisely the wrong time. The blinkered denial of the dangers of soaring public debt. This is how we arrived in this unenviable position.”He said during her six years as Finance Minister Ms Cox had not done enough to stop soaring Government deficits and public debt.“As a result of overspending and bungling the job of financial planner in chief, Government deficits have ballooned along with the public debt,” he said.“This is a major problem for the Government as a whole, as it shows a clear mishandling of Government finances on the part of the Minister of Finance, now Premier.”He said she had also allowed the economy to overheat, which in turn increased property prices and rents.“In her Budget Statement three years ago, the Minister bragged her Government was stimulating the economy an economy that was already overheated,” he said.“This is how the Bermuda economy arrived at where it is today, in a holy mess. Bermudians need to connect the dots. The policy bungling and head-in-the-sand disposition represents a serious failure of leadership; a failure that worsened the impact of recession and diminished our economic strength.”l Reply to the Budget, full text starts on Page 4
Government should appoint a commission to ensure it spends taxpayers' money wisely and effectively, Shadow Finance Minister Bob Richards said yesterday.
Mr Richards called for a Spending and Government Efficiency (SAGE) Commission containing people from the public and private sector to help get rid of the red tape he says is irritating international business.
He told the House of Assembly such a group would streamline Government processes, improve service delivery and make Government more efficient, transparent, accountable and user-friendly.
The Shadow Minister said Bermuda's company incorporation and registration process is too bureaucratic, meaning the Island is not competing properly with rivals like Switzerland, Ireland and Cayman.
“The urgent need to cut Government red tape is not unique to Bermuda, although I can think of no other place where it is more crucial in terms of restarting economic growth,” he said.
“Red tape has become an integral part of our economy, much like barnacles on the bottom of a boat. The time has come to get rid of it.”
The SAGE Commission was one of a series of suggestions Mr Richards put forward as he insisted Bermuda's finances would be in much better shape if the United Bermuda Party was in power.
Other ideas included:
l reform term limits — a “major irritant for international business, driving uncertainty, increasing costs, generating ill will, hurting recruitment and making competing jurisdictions more attractive to existing and potential customers”;
l pay cuts for Ministers, to lead by example after overtime bans were imposed on unionised workers;
l stimulate the economy by ensuring vendors are paid within 30 days, fast-tracking planning to get jobs-producing projects off the ground and directing Government spending to struggling small businesses;
l eliminate payroll tax for anyone earning $50,000 or less, giving them up to $200 more each month in their pockets;
l introduce a national tourism plan, push through education recommendations from the Hopkins Report and consider Operation Ceasefire to tackle gang violence.
