The Chamber of Commerce has praised the Government on its projections of balancing the Budget but said “significant” cost-of-living challenges are likely to persist owing to increased prices.

The chamber released a statement in response to Friday’s Budget Statement in which David Burt said he expects that the Government will record its first Budget surplus in more than 20 years.

The chamber said: “The Bermuda Chamber of Commerce applauds the Government's achievement of presenting a balanced budget for the first time in nearly two decades and welcomes the decision not to impose new taxes on neither employers nor employees.

“The chamber endorses a budget aimed at fostering economic growth but recognises that inflationary pressures are unlikely to lead to lower tax bill for businesses due to rising costs of goods and the need for payroll adjustments to sustain living standards, which could further increase costs.

“Despite a global decline in inflation rates, the path forward remains touchy as evidenced in developed nations, signalling that prices will not fall but rather continue to increase at a modest rate.

“This implies that Bermuda will still face significant cost-of-living challenges, with the local inflation rate not fully capturing the difficulties many residents are experiencing.

“There was no announcement of targeted tax relief, as outlined in the pre-Budget report, which would have provided an opportunity to reduce some of the cost-of-living challenges.

“Instead, plans for potential relief that would impact both individuals and employers were mentioned as a benefit of the implementation of the corporate income tax.

“We support the notion of putting the excess borrowing fund to work by providing a tangible benefit to the community and await the multiyear strategy to target healthcare costs and outcomes, as the plan to deploy $30 million to healthcare costs is a one-year initiative.”

The Premier said that the Government expects to balance the 2024-25 Budget with no new taxes to be introduced during the fiscal period.

Danielle Riviere, the chamber’s chief executive, said: “Overall the chamber is optimistic about the no-new-tax Budget but remains cognisant of the high costs of living and doing business.

“It is committed to collaborative efforts with its members, the Government and other stakeholders to ensure Bermuda's economy maintains a sustainable fiscal path.”

The chamber applauded the increase in grants to purchase residential homes and support for organisations helping seniors and the disabled, and the hiring of a Land Title and Registry Officer to speed up land registrations that are lagging by up to 18 months.

It also welcomed the introduction of a digital fare payment for public transport, saying it will enhance the experience for locals and visitors.

While the chamber recognised that employment continues to grow post-Covid, it said: “This growth has been fuelled by the international business sector, and the local business sector continues to find its foothold in the new environment.

“The reported jobs filled of 32,849 is still shy of the 2019 employment levels, which shows some of these challenges.”

Affordable housing, which is being boosted through a $10 million grant increase to the Bermuda Housing Corporation in addition to its existing $15 million grant, was also welcomed by the chamber, which said that the number of residential units at present is “inadequate”.

“A combination of 15 years of reduced new dwellings coupled with an ageing population, shrinking household sizes and the growth of vacation rentals and new construction costs leaves a gap in the housing inventory that appears to be widening rather than shrinking. Future developments will require a close collaboration between developers, business and government alike.”

The chamber said it is encouraged to learn that there will be a focus on infrastructure maintenance, particularly for improving the road surfaces.

Capital expenditure for 2024-25 is forecast to be $112.3 million, $16.3 million or 17 per cent more than the present year’s original estimate — the largest budgeted investment in capital since 2010.

The chamber added: “The Government’s delivery of a balanced budget is a positive step ahead of the successful implementation of the corporate income tax in 2025 and the impending Government debt maturity in January 2027.”