Log In

Reset Password
BERMUDA | RSS PODCAST

Policy u-turns

Louise Jackson

Shadow Minister for Seniors Louise Jackson has said that many pensioners would be getting a surprise this week when they received land tax bills as their 100 percent exemption was removed.Mrs Jackson was not overly critical of the Government for this move, but she was right to note that this is another election giveaway that is now being reduced. As part of its efforts to bring relief to seniors struggling under the burden of low pensions and rising costs, especially for healthcare, those who owned their own homes were given the land tax exemption.This made sense for people who were land rich and cash poor. But it was always unfair that some very wealthy senior citizens would benefit from a full tax break when they were quite capable of paying the tax, or some part of it. Similarly, the full exemption on vehicle licence fees, even for those who could afford the most expensive and largest vehicles, was poorly thought out.So, as the economic squeeze continued, Government in the Budget amended the exemption so that taxes would be levied on homes with rental values above $50,000 a year, or a little more than $4,000 a month.Fair enough, many people will say. But in Bermuda’s overheated economy, an Annual Rental Value of $4,000 will catch many people in fairly normal family homes who may well be among the cash poor and will have seen their home values plummet since the financial crisis as well.Indeed, one in four of those originally exempted will now have to pay something. So it is likely that this change will cause undue hardship for some, even if 75 percent of seniors will still receive a full exemption. It is to be hoped that those who can show hardship will still get some help. It would be one thing if this policy reversal was a one-off, or an anomaly. But it’s not. The list of benefits that were handed out and have now been retracted or amended is getting very long.As noted, senior citizens have lost their vehicle licence fee exemption for several classes of car, some of them quite modest. In addition, Government had to backtrack on the backtrack when it was pointed out that some senior citizens with disabilities need larger cars, so they must now apply for an exemption.Under the Progressive Labour Party, free tuition at the Bermuda College was given, but has now been replaced with a fee of around $2,200 a year for full time Bermudian students, according to the College’s catalogue. That is still cheap compared to overseas institutions, but it was $1,600 a year before it was made free, so little has been gained.Other giveaways have also been taken back. Child care was supposed to be free for poorer parents, but access to this has become increasingly restricted. Future Care was supposed to make healthcare affordable for senior citizens, but the cost depends on when you were able to sign up and some benefits have now been excluded.At the same time, other costs are rising. On August 1, contributions for Social Insurance rose by 5.5 percent, or $3.36 a week, with the employer and employee usually paying half each. That may not seem like a lot, but when businesses and individuals are trying to stretch every penny, it adds up. To be sure, pension funds need to be shored up and made sustainable, but the failure to prioritise when times were good means that everyone is paying now. The real solution is to bring growth back to the Bermuda economy, but there is little evidence of a plan to do this.Until there is, these reversals on policies and continued squeezing of an already contracting economy will continue.