Government doubles down on cybersecurity
A Cybersecurity Governance Board under the authority of the Ministry of National Security is spearheading the development of a National Computer Security Incident Response Team to support both private and public sector resilience to cyber threats.
The C-Sirt programme borrows a page from the corporate world.
The initiative, highlighted in the Sovereign Surveillance Report for Bermuda published by Kroll Bond Rating Agency, will be recognised in the drafting of updated cybersecurity legislation.
The Information Systems Risk Management Programme Policy requires the Government to follow security policies that reduce risks for its own accounts and those of economic agents in the country.
Training to ensure for the right skills against cyberthreats is part of the Government’s agenda, the rating agency asserted.
KBRA said the recent cyberattack on government systems indicates the rising risks but also illustrated the evolving ability to manage such risks and also may help to increase preparedness for, and resilience to, future events.
KBRA made a number of other observations as it affirmed solid short and long-term issuer ratings for the island.
The agency affirmed Bermuda’s long-term rating at A+, with a stable outlook and short-term issuer rating at K1+.
The A+ long-term rating is in the third tier of KBRA’s rating index.
The analytical discussions included stakeholder risks emanating from the labour market.
The report said: “Policymakers are tasked with maximising employment opportunities for Bermudians and managing immigration, which adds to demographic pressures.
“The side-effect of this policy framework adds to labour-supply bottlenecks and has made it harder to meaningfully cut hefty payroll taxes.
“However, the budget for fiscal year 2023-24 has aggressively reformed and made the payroll tax system more progressive, and the Government is also looking to shift pension contributions to be based on income levels.
“Employer payroll taxes are being reduced in many sectors, which will stimulate employment.
“Global corporate tax reform including a minimum 15 per cent tax rate could create greater affordability in Bermuda if the policy environment would involve a reduction in payroll taxes.
“Strides to increase the supply of housing, including at Morgan’s Point, and the mortgage guarantee programme also assist affordability. The Government is exploring areas to enhance immigration and retain Bermudians on the island.”
KBRA’s economic analysis posits a fully rebounded economy from the pandemic in 2022 and says that the first quarter of 2023 recorded real-term gross domestic product growth of 3.6 per cent.
The report said: “Growth has been assisted by fast-growing employment income, a hike in the minimum wage, an inflation shield on pensions, a defreezing of civil servant salaries and rising government investment spending, in particular, and in spite of an overall tightening fiscal position and liquidity environment.
“Meanwhile, inflation, which is higher than usual as is the case across the globe, lags the US, and does not yet appear to significantly dampen demand.”
In making a case for KBRA’s optimistic view, the report said the continuing tourism recovery is seen in 74 per cent hotel occupancy and 74 per cent of capacity in airlifts.
In the first half of 2023, total leisure visitors are about 17 per cent off the level of the same period in 2019, although gross revenues are up partly because of the inflation environment and longer-duration stays.
It also states that more generous tax concessions for the hotel industry —lengthened to 25 years — and relaxed height restrictions for residential buildings in the North East Hamilton Empowerment Zone are stimulative.
It also adds that other activity, including the relocation of the Brookfield headquarters to the island, adds to performance.
The resumption of golf and sailing events — and other sports events — post-pandemic also supports the economy.
Kroll Bond Rating Agency is a global, full-service rating agency established in 2010, providing an alternative solution to the more widely known competition.
KBRA was recently in the news when it admitted Securities and Exchange Commission violations and agreed to pay a $4 million penalty.
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