Government targets debt reduction and ‘fairer’ Bermuda
The Government outlined ambitious plans today to rid the island of its multibillion-dollar debt in the next ten years while also setting out an agenda to make life fairer for Bermudians.
Read by the Governor, Rena Lalgie, the Speech from the Throne aims to address issues ranging from domestic violence, health, housing and social care to reducing banking charges and addressing “worrying” mergers.
There will be increases in financial assistance, legislation aimed at the disabled, government modernisation and reviews of old and outdated laws.
Titled A Fairer Bermuda For All, it also promised some constitutional reform over immigration, a review of Public Service salaries, further promises of red-tape reduction and payroll-tax changes.
The Throne Speech detailed a path for the Bermuda Tourism Authority to become self-funding, incentives to employ people beyond retirement and increased workforce protections.
It also outlined an ambitious path to rid the island of its debt using revenue from the 15 per cent corporate income tax, which comes into effect in January.
The Governor said: “To support the implementation of Bermuda’s corporate income tax regime, legislation will be introduced to update the corporate income tax framework and address matters relating to use of excess tax revenue.
“Based on the recommendations from the Tax Reform Commission and the International Tax Working Group, this legislation will codify how funds collected by the corporate income tax regime will be reserved for use.
“The projections state that within the next ten years, the Government should have enough in additional tax receipts to eliminate Bermuda’s debt and establish a sovereign wealth fund to make strategic investments for Bermuda’s future.”
Addressing an audience on the Cabinet lawn, Ms Lalgie said: “Although Bermuda has surmounted significant challenges, the Government recognises that there are many more obstacles ahead.
“There is much more work to do to ensure that economic progress is felt by all Bermudians.
“In this legislative session, that work will renew the focus on the social transformation spurred by September’s midyear review and consolidate the fiscal successes that led to the historic expected budget surplus.
“The Government’s midyear review and the allocation of additional resources to hire staff, cement necessary programmes and expand services to the people prioritises the paths of economic growth, social renewal and fairness.”
The principles of equality, fairness, good governance and a separation of power underpins Bermuda’s Constitution. They are as relevant today as they were in 1968.
That is why I have been diligent in protecting the separation of powers between key institutions such as the judiciary and the police service but the fundamental principle of operational independence necessitates accountability.
Rain, blow or shine, I have been guided throughout my tenure by the principles of integrity and accountability in my support for good governance. I am proud of the progress we have made together but know that more must be done to ensure the continued trust and confidence of those that we serve.
I remain inspired by the resilience, drive and ingenuity of the communities that I have had the privilege to spend time with during my tenure. There is no doubting Bermuda’s rich cultural diversity, enviable natural environment and the abundance of passionate advocates and philanthropists.
There is no doubting the intellectual capital, Bermuda’s global reputation as a financial centre or how attractive it is as a base for international business.
These are some of Bermuda’s strengths which can provide opportunities and prosperity for all. They are strengths to be nurtured and protected but not to be complacent about.
As I prepare to lay down my feathers for the last time and leave this unique territory that my family and I have made our home for the last four years, I am sure that I will continue to be a non-Bermudian flag-bearer who remains invested in Bermuda’s continued success.
Ms Lalgie said this year the Government would advance a Disabilities Act to ensure equal access to services, facilities and employment.
There will be amendments to the Financial Assistance Regulations 2004 to give seniors and people with disabilities a $100 monthly personal allowance to cover the cost of personal-care items, “allowing this vulnerable population to meet basic hygiene needs”.
To help families, Ms Lalgie said the Ministry of Youth, Social Development and Seniors would lead a cross-ministry team, struck to provide further intervention to identified, high-risk families.
“This intensive family preservation team will address the need for basic life skills, ensuring the welfare of families and children, with stable and suitable housing, nutritious food and access to medical care.
“The multigenerational trauma endured by these families can and must be halted,” she said.
A new domestic violence court programme will be established and the Government will introduce the violence reduction strategy for Bermuda.
The Governor added: “The strategy will provide the guide for tackling unaddressed, multigenerational trauma, co-ordinating the agencies charged with intervention, and managing the process by which women and men engaged in this lifestyle re-enter the mainstream of their communities.”
As the Government looks to focus on mental health of young people, the Throne Speech said it was “vital that we also tackle substance abuse”.
“The Department of National Drug Control will reinstitute Bermuda Youth Counselling Services to address the gaps that exist in substance abuse treatment and counselling for adolescents,” the Governor said.
On health, until a universal healthcare plan is created, Ms Lalgie said the Government would continue to expand access to and improve the quality of HIP and FutureCare.
“Therefore, during this session, the Government will bring forward changes to legislation to expand access to preventive visits to doctors, provide improved coverage for prescription drugs and reduce copays.
“The aim is simple — to reduce out-of-pocket expenses so that more persons get annual check-ups and can afford the medications prescribed by their physician.”
On the labour force, the Throne Speech said there would be further strengthening of the minimum wage, along with greater protections for workers in the enforcement of tribunal awards.
The Governor added: “To encourage the retention of those Bermudians over 65 who wish to continue working, the Government will bring legislation to eliminate the employer’s portion of payroll tax for those Bermudian employees so retained.
“To assist long-serving employees faced with unexpected unemployment and loss of income, the Employment Act 2000 will be amended to increase maximum allowable severance pay from 26 weeks to 32 weeks for those employees in continuous employment for 13 years or more.
“This increase will be complemented by a legislative amendment to remove the requirement to pay payroll tax on redundancy pay. This will help provide stability and fairness for employees during a time of transition.”
To help provide more homes for Bermudians, the Governor said there will be amendments to the Bermuda Housing Act to give the Government additional powers to “tackle the challenge of derelict residential units to provide increased housing inventory for Bermudian families”.
Alongside that, Ms Lalgie said the Government had completed public consultation on a draft plan to end homelessness in Bermuda.
“During this legislative session, the legislature will be invited to review and support the final plan, which will be a collaborative approach to tackling housing insecurity in Bermuda.”
The Government undertook a “red-tape reduction” consultation this year and as part of that, the Ministry of Transport will eliminate the requirement to undergo a medical examination every ten years as part of the driving licence renewal process until the age of 70.
It will also reduce the number of vehicle inspections required in the first five years for a new vehicle.
The Governor added: “To further harmonise the public service vehicle industry, a new, fairer payroll tax system for minibus owners will be introduced.
“Instituted through legislation, this new system will have a fixed payroll tax in three levels, based on the seating capacity of the minibus.
“Additionally, the payroll tax for taxi owners will be reduced from $1,000 to $600 to create a more balanced structure within the industry.”
The Throne Speech said that “too little fairness exists within Bermuda’s banking sector”.
“Whether it be a lack of access to banking services, or continually increasing fees or high interest rates, Bermudians are rightly enraged when they are asked to pay more while local banks proudly report increased profits,” the Governor said.
“Following consultation by the Bermuda Monetary Authority, the Banks and Deposit Companies Act 1999 will be amended to require basic banking services to be provided for all persons, to ensure that all residents have access to banking services.
“Regulations under that Act to place limits on fees charged by banks will finally be advanced in this session.”
The Throne Speech also highlighted a “worrying consolidation in key industries” in Bermuda.
“In critical sectors, consumers may be faced with the loss of genuine choice in service and of the competition that is essential to achieve quality delivery at appropriate costs.
“Recent local developments in food supplyand financial services can have an ongoing adverse impact on prices, which this community can ill afford.
“Given the real challenges with costs in Bermuda, residents rightly should expect that the Government should act in the public interest if it is deemed necessary to do so.
“Therefore, during this legislative session, the Government will commence consultations on amendments to legislation to allow scrutiny of local mergers and acquisitions that concentrate significant power in essential sectors.”
The Governor added: “In Bermuda, that ‘long patience of the masses’ is being tried by unfairness in too many sectors. Unfairness which inevitably spills over into the lives of the people, to sometimes devastating effect.
“Unrestrained practices in healthcare services, banking and now food supply — which have prioritised profits over people, and which taunt the Government to act — cannot go unanswered.
“The covenant of public service means facing down ingrained systems and setting an agenda of fairness and equity which governs for all and not for the few. That is the Government’s mantra for this session and beyond.”
• To read the full 2024 Speech from the Throne, see Related Media
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