Amendments to payroll tax regulations are expected to bring in an additional $30 million in government revenue during the extension period given to tax breaks for companies making new hires.

Legislators also passed an amendment putting excess borrowed funds to use in applying the brakes to increased government health insurance premiums.

Government minister Wayne Furbert opened the debate yesterday in the House of Assembly for the Payroll Tax Amendment Act 2024.

The legislation modifies the 1995 Act to change the applicable dates for a new hire payroll tax waiver for qualifying companies.

Under the existing legislation, the new hire waiver only applies to those hired between April 1, 2018, and March 31, 2024 — when the hiring increases the employers total number of full-time employees.

The amendment would allow those hired between that period and March 31, 2026, to be included under the waiver.

The amendment would also extend the benefit to those who started work after April 1, 2022, and continue to be employed after April 1, 2024, up until March 31, 2026.

The benefit would, however, not be extended for those hired prior to April 1, 2022.

Mr Furbert said the updated baseline was “important as there are some new businesses which have started since 2018 and have not paid any employer tax, shifting the burden disproportionally to our older, more established businesses”.

He added that international business represented 77 per cent of the applications for hire relief since it was put in place.

David Burt, the Premier, highlighted the stimulus package was not only just for exempted companies, but also “large local employers growing and expanding their staff”.

Jarion Richardson, the Leader of the Opposition, signalled the One Bermuda Alliance’s support, but said that the party wanted the tax breaks to be focused solely on creating new jobs.

Mr Richardson added that he hoped “fake companies” could not be created to take advantage of the incentives.

Zane DeSilva, a Progressive Labour Party backbencher called the concern over fake companies “far fetched”, while Jason Hayward, the economy and labour minister, said the amendments “made sense when first introduced, and it makes sense to continue it now”.

Michael Dunkley, of the OBA, backed the amendments but added: “We still have to be very careful to make sure we protect the public purse and bring confidence back to this country.”

Anthony Richardson told the House that the economic benefits extended to local businesses, if they qualified under its terms.

It was passed with approval from both parties.

The Premier then brought the Government Loans Amendment Act 2024, allowing the sinking fund to provide monies to other public funds if, in the opinion of the finance minister, they would not be required to fund budget deficits.

Mr Burt noted the modest budget surplus expected in 2024-25.

The original fund was borrowed for emergency support during the Covid-19 pandemic.

The sinking fund includes an excess borrowing fund created in 2013, with the unused borrowing reserved for funding future deficits. .

“The question then happens, how do we best utilise that fund? Do we hoard them away for a rainy day? There’s an argument for that,” he said.

“Or, given the challenges we face, do we invest them for the wellbeing of our citizens? In this case the Government has chosen to do both.”

Mr Burt said the transfers would leave funds in the account, but would put others to use against the island’s punishing cost of living.

As revealed in the Budget Statement, the amendments would allow $30 million to be transferred to the Mutual Reinsurance Fund and $10 million to pay for more affordable homes.

The debate proved acrimonious, with Mr Richardson, the OBA leader, warning that the transfer was “not the only way to undertake this method of relief”, citing grants and contributions as another avenue for relief.

Saying it set a “dangerous precedent”, he added: “The sinking fund is going down in number incredibly fast.”

Dennis Lister, the Speaker of the House, warned that he would dismiss any MP from the House for delving into personal attacks as Mr DeSilva, of the PLP, sparred with Craig Cannonier, of the OBA.

Lieutenant-Colonel David Burch, the public works minister, said people who had taken their properties off the market could work with the Bermuda Housing Corporation to get them back with tenants, adding: “We are not done yet.”

Mr Dunkley lamented that excess borrowing was being used to help the people of Bermuda “because we have not found another way” other than to burden future generations.

He said: “All we’re doing is creative accounting. We’re not saying that’s wrong because accounting can be creative.”

He questioned what would be done next year in the face of increasing healthcare costs.

He said: “This Bill not only has implications this year but future years, which makes it difficult to support it when we don’t know what is going to transpire in future years.”

Shadow transport minister Susan Jackson pointed out that funds were coming from borrowed money, adding: “Regardless of all the wonderful things we are going to do this year, we’re going to have to pay it back — with interest.”

She also suggested that it would not benefit those very poor who do not have health insurance.

The Act was put to a vote and passed by 19 “ayes” to four “nays”, with the vote going along party lines.