A “vivid contrast” was drawn by the Opposition between the Government’s Pre-Budget Report, branded “political propaganda”, and an independent assessment of the island’s fiscal performance.

Douglas De Couto accused David Burt, the Premier and Minister of Finance, of presenting a “self-congratulatory” report last week in Parliament that was at odds with the December 2024 annual assessment issued by the independent Fiscal Responsibility Panel on Wednesday.

The Premier last week described the Pre-Budget Report as “a strategic document” ahead of next year’s Budget that gave “transparency, encourages public engagement, and ensures accountability by inviting feedback”.

The Government also responded to the Fiscal Responsibility Panel assessment by saying the group had recognised “Bermuda’s strong economic performance, prudent fiscal management and the Government’s continued progress towards achieving a balanced budget”.

However, Dr De Couto called details in the Pre-Budget Report “misleading at best and false at worst”, and maintained that there were “severely troubling indicators of a flat or shrinking local economy that Government is pretending not to notice”.

The senator, who serves as Shadow Minister of Finance and Economic Development, claimed that 90 per cent of the island’s increases in Gross Domestic Product from 2019 through 2023 had come from international business and financial services.

GDP elsewhere in the Bermuda economy has “barely budged” since 2019, Dr De Couto said, which was being felt in the pockets of average residents.

He highlighted a 9.6 per cent decline in container volume for the first six months of this year compared with 2020, and a 23 per cent drop in youth enrolment at the Bermuda College for the same period.

Dr De Couto added: “We also know from government reports that there are now fewer jobs on the island since before Covid.

“All those troubling indicators point to fewer people, fewer jobs and less true on-island economic activity.”

The senator attributed rising tax revenues to “payroll taxes, which in turn will have been boosted by IB bonuses following a good year for the industry in 2023”.

He said international business’s healthy performance last year could not be ascribed to government programmes, and might not be repeated.

The Pre-Budget Report pledged tax breaks for 2025-26 — but Dr De Couto called cuts to items such as mobile phone and vehicle registration fees “regressive gifts” better spent elsewhere, and suggested they were made with the next General Election in mind.

He also called the use of the Sinking Fund a “financial shell game” using money off the official Budget.

The finance ministry has called the moves, which went to affordable housing and kept health premiums from rising, “an appropriate step” in light of cost of living pressures.

The two measures, approved by legislators this year, added up to $10 million and $30 million respectively.

The Opposition senator said of the move: “It’s bad enough that he has failed to include this $40 million in the official Budget.”

He said that, combined with funds taken out in the previous year, the figure added up to “$96 million in total that should have been used to repay debt”.

Dr De Couto also targeted what the Pre-Budget Report called “conservative estimates” of projected revenues for the corporate income tax.

He said “plans to spend almost $150 million of CIT funds in 2025” were premature.

The Fiscal Responsibility Panel report stated: “Estimated CIT payments will begin to be paid in the latter part of calendar year 2025 — that is, about the middle of fiscal year 2025-26.

“However, until taxpayers have submitted final returns in late 2026, such revenues are payments on account rather than certain revenues, and most or all should be held in some form of suspense account rather than treated as available government revenues.

“They will thus not be available to the Government until fiscal year 2026-27.”

Referencing the report, Dr De Couto said the Government’s pledges for spending based on CIT estimates were “plain irresponsible”.

However, in a separate interview this week with The Royal Gazette, Mr Burt emphasised that what was “more important” than the actual figure of the corporate income tax was the Government’s plans for it.

These include introducing universal healthcare — and ensuring that “in line with the Fiscal Responsibility Panel's recommendations, we have laid out a path that will make sure that the $605 million of debt that comes due in 2027 is able to be paid in full”.

The Premier also said economic growth from “the international business sector but also in the domestic economy” was “yielding results and better revenue for the Government” to buffer the island’s taxpayers against rising costs.

• For full coverage of the Gazette’s interview with the Premier, see Monday’s edition