The Government outperformed its own expectations in the last financial year owing to “sound management” of the economy, according to David Burt.

Mr Burt, the Premier and Minister of Finance, presented the figures for revenue and expenditure for 2022-23 in the House of Assembly yesterday.

The Premier said that the Government was able to “once again beat its Budget targets” in a harsh global economic climate.

He also said that “revenue was higher than budgeted, expenditure was lower than budgeted, and the deficit was smaller than budgeted”.

But, according to the figures, total government expenditure — when interest payments and management costs were factored in — was $12 million higher than first estimated at the start of the fiscal year. And despite better-than-expected revenues, the Government still spent $52 million more than it earned.

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Update on Government’s Financial Performance.pdf

The combined cost of current and capital expenditure was down — but only by $1 million or 0.01 per cent from an estimated $1.018 billion to $1.017 billion.

But debt-financing costs of $143 million — $13 million over the estimated $130 million — saw total expenditure for the year rise to $1.160 billion against a pre-Budget prediction of $1.148 billion.

Estimated current account expenditure of $945 million went over budget by $4 million, but $5 million was shaved off the capital account estimate of $73 million.

Mr Burt defended the minor overspend in the current account, pointing out that there were “unplanned expenses” during the year, including a $15 million allocation for the Covid-19 pandemic, a $15 million grant to support the hospital, and economic relief measures.

He said: “Despite all of these additional and unplanned expenses that arose during the year, which were necessary as the Government provided relief and assistance in the face of 40-year-high inflation, this government’s fiscal discipline was able to keep current expenditure largely in line with the original budget, exceeding the original budget by only 0.4 per cent.

Mr Burt acknowledged that the $5 million saving in the capital account was achieved because some capital projects had been unable to proceed.

He said: “This underspend in capital account expenditures is mainly due to the availability of resources and supply-chain challenges.”

Mr Burt also explained why the estimated cost of interest and guarantee management fees had shot up from a projected $130 million to $143 million.

He said: “Guarantee management fees totalled $6.4 million in 2022-23, and the remainder of the increase was directly related to the Government’s refinancing debt transaction in August 2022.”

Mr Burt said that a $38 million increase in anticipated revenues — from $1.07 billion to $1.11 billion — was because of higher-than-expected payroll tax, land tax, foreign currency purchase tax and immigration receipts.

He added: “The higher-than-budgeted revenue figure was achieved despite payroll tax cuts for workers making less than $96,000, $13 million in duty relief to freeze the price of gasoline; elimination of duty on essential foods and goods; and the $18 million not received from the aircraft registry due to the war in Ukraine.”

According to Mr Burt, the final figures mean that the Budget deficit for the year will now be $44 million — $26 million, or 37 per cent, below the original estimate of $70 million.

He added that net debt at the end of March was $68 million lower than the original estimate of $3.19 billion, down to $3.12 billion.

Mr Burt said that the figures demonstrated “sound financial management on behalf of the taxpayers of this island and is further evidence that this government has been and will continue to be good stewards of Bermuda’s economy and the public purse”.

He added: “Despite the fictitious cries from the Opposition about overspending by the Government, despite the daily diet of falsehoods of a stagnant economy peddled by the newspaper, the facts are that this government has demonstrated since 2017, time and time again that we are sound stewards of the public purse.

“Honourable Members may ask, how can the Government post improved figures?

“The answer is simple. Our economy is recovering due to this government’s sound management of our economy and the continued implementation of our Economic Recovery Plan, which has seen Bermuda’s GDP return to pre-pandemic levels in 2022.

“Payroll tax collections are up, and in the first quarter of this year, payroll tax was filed for 1,812 more employees, or 5 per cent more than the prior year.

“Our unemployment rate has fallen to below pre-pandemic levels, and employment is up among Bermudians of all ages and races.

“This government is focused on building a Bermuda for the future. We have laid out our path to a balanced budget along with an Economic Development Strategy to build on the work of our Economic Recovery Plan.

“There is more work to do to ensure that the growing economy lifts all boats, but both sides of this honourable House should welcome today’s news as government finances are in better shape than anticipated.”