Income Tax & Gambling

Vexed highlights this interview that Dr. Brown has given to the BBC, where he discusses Bermuda’s current economic situation. While Vexed doesn’t explicitly adopt any position on this interview, I get the impression (based on the section he quotes) that he is opposed to Dr. Brown’s statement on income tax. Personally I support the adoption of a progressive income tax, although I recognise that it’s adoption would have to de done skillfully, at least under our existing economic base. I believe though that it would be a mistake to read to much into this statement by Dr. Brown; I think it is highly doubtful that Dr. Brown, or the PLP as it currently exists ideologically, are going to start advocating an income tax policy. I imagine that the interviewer asked Dr. Brown about the possibility of introducing income tax as a result of the current economic crisis facing Cayman.

Cayman approached the UK for permission to accept some bank loans to assist it with its current situation and the UK turned them down, arguing instead that Cayman should investigate adopting, amongst other reforms, income tax. I’ve been meaning to post an article on that situation, but it has been stuck in ‘draft purgatory’ having gone off on a tangent about my experiences in Cayman during the Regiment post-hurricane Ivan restoration operation. Basically I wanted to say that the UK is acting rather hypocritically on this issue, as the banks were willing to assist Cayman and the permission from the UK should have been a mere formality than anything else. And with the UK bailing out sectors of the British economy, as well as looking for assistance from the IMF, hardly has the moral authority to criticise Cayman in the way it did (especially effectively undermining the economic basis of the country). Anyway, the relevance of this to the statement of Dr. Brown on income tax is that in rejecting Cayman’s request for permission, the relevant official told Cayman that it should adopt, and this understandably sent shockwaves throught the business world.

While Bermuda’s economic situation is by no means as healthy as it could be, from what I understand on the basis of current reports (and my own observations from Cayman), Bermuda is no where as critical as Cayman is.

While Vexed seems to have found the section referring to income tax to be the most interesting part, for me it was Dr. Brown’s statement on gambling that I found particularly interesting. This section reads:

Dr Brown believes the role of smaller, low-tax countries is misunderstood by bigger, richer nations.

“The financial activity of these companies in places like Bermuda is really beneficial to the countries onshore. In the US, for example, we commissioned a report which indicated there is great benefit to the United States in having companies based in Bermuda,” he said.

“These companies are sufficiently strong financially to be able to pay claims after catastrophic events like [Hurricane] Katrina or 9/11. There’s also an impact on jobs in the US that result directly from Bermuda-based companies,” he added.

If the US attempt is successful, Dr Brown says his government will have to look at other ways of raising money, including trying to set up a gambling sector.

While the statement on income tax seems to have been a direct answer to an explicit question on income tax, the statement on gambling comes across as voluntary. This is hardly surprising, as Dr. Brown is well-known to be very much pro-gambling, with his infamous attempt to sneak gambling legislation through the house a few months ago being of particular note. I do wonder though if his statements on gambling to the BBC and also in the Bermuda Sun today are a lead up to a new campaign of his to ensure gambling legislation is passed in the next parliamentary term, or at least before he steps down in 2010. I am sure the gambling’s taskforce report (which was completed in August but not – as far as I am aware – been made public), is going to resurface shortly as well.

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58 thoughts on “Income Tax & Gambling

  1. Jonathan,

    You mean to tell that “Vexed Bermoothes” is back blogging in addition to Christian Dunleavy and New Onion? It would not surprise me if the “Limey in Bermuda” re-activates his site as well. Then we have the Green Party, the disallusioned UPB members, or the Shawn Crockwell/Mark Pettingill Party, and the group who call themselves “BERMUDIANS”. What do you think this all means? Don’t you find it “interesting”?

  2. Why do we need to raise more money?

    This is not “bashing” the Govt, as I see no point, but why have we continued to spend in the way we have, given that our income is falling?

    We had a budget that was carefully thought through, a budget that the Govt had confidence in, consideration was given to the fact that we were in recession and all knew what that might mean, so what is happening?

    Now for the “bashing” bit. To say that if the US is successful the Govt will have to look at new ways to raise money is hysterical.

    If the US is successful and the IB sector starts to drift away, we will not have an economy that even remotely looks like the one we have.

    If the Premier believes that income from gambling can even come close to replacing the lost IB income, he is seriously deluded.

    And as for loosing $3.1m next year due to the one day short fall from Norwegian….that is chicken shit compared to what this Govt spends it’s money on.

    Trim your spending plans Govt….don’t take it out on people.

  3. Laverne, if you don’t like the message say so (and rebut it). Don’t attack the messenger – doing so says you have no arguments and the original posters are correct.

  4. I think it means something very simple: A lot of people are very disappointed and unhappy with the performance of the government.

  5. If – and I repeat IF – the Premier is to leave office in Oct 2010, you can be assured he will want to leave on a “high”.

    The introduction of income tax, is not a “high”, so it will not happen on his watch.

    In the event that IB was to seriously drift away, then you will have an utterly different economy than that which we have today. And not just in terms of Govt income…the trickle down effect will have horrendous consequences for the peoples of this island. Every business – local shops, gas stations, food stores, Bermudian landlords et al, will suffer.

    Raising Govt income from a population that will have less money and from a smaller income earning population, will also skew the rates of tax that need to be levied.

    Whilst it also depends on how “income” is defined, the loss of high net worth Bermudians and others wishing to escape taxation, will be rapid and have serious implications for the island.

  6. Just a brief comment to remind you guys that the whole world reads the blogs and that all the little British outposts around the globe are facing similar problems.
    We really do need to share our views more – Jersey is just the latest place trying to enter the on-line gambling business in spite of EU concerns.
    Have a look at our blogs such as voiceforjersey.blogspot.com
    and spread some knowledge and experiences.

  7. We can’t compare Cayman and Bermuda. Apples and oranges.
    Cayman doesn’t have anywhere near the expense of living that people here in Bermuda have.
    Income tax would be B.S. considering we pay out the wazoo for our duty tax that is already built in the prices of everything! What we need is a tax on the RICH PEOPLE ONLY. They are the only ones benefiting from our lack of tax, while everyone else has to spend most of their money to pay for power, food, social ins., payroll tax, car license fees, astronomical rents, childcare, ext.
    Tax the rich, but I’ll tell you the people struggling or just barely saving here DO NOT NEED MORES taxes. Ridiculous IMO.
    How about the government cut back on traveling expenses and b.s. projects, studies, ext. How about they stay on the island and FOCUS on REAL issues to budget better. They don’t need to go to world conferences to figure out how to run the country. The answers are in their back yard!

  8. Sara,

    Don’t you think that one of the reasons the rich are here is because the taxation arrangements we have allow them to optimise the amount of money they have?

    Do you think their money would stay in the islands if there was even the lightest smell of some form of income tax being introduced?

    Does it matter if their money is not here?

  9. What we need is a tax on the RICH PEOPLE ONLY. They are the only ones benefiting from our lack of tax, while everyone else has to spend most of their money to pay for power, food, social ins., payroll tax, car license fees, astronomical rents, childcare, ext.

    Just how long do you think that “rich people” (whatever that means) will stay if you suddenly decide to start taxing them?

    Tax the rich …

    which is usually shorthand for “make somebody else pay”.

  10. The government should make enough money that they shouldn’t need to tax anyone.
    But if they did impose a tax, it shouldn’t be on the average Bermudian that barely makes enough to save anything at the end of the month.
    I am not talking about a company tax, more of an individual tax on people that make over a specific amount. If you make say over 300,000 per year in Bermuda as an individual, will it break you to pay a little extra to the government? You will still be rich, the question becomes just how rich do you need to be ?
    Of course this is my opinion, and I understand that conservatives will never understand this concept.

  11. Al,

    What it really means is that the same people who have always been dissatisified with the government since 1998 are up and running again and trying once more (in their own way) to get rid of the government.

  12. Sara…

    What about the wealthy that “don’t make over a specific amount”, but are wealthy nonetheless?

    Should it be that only those who ‘work’ for their money pay extra taxes…as distinct from those ‘whose money works for them’?

    A minefield. Oh yes – and a vote looser too.

  13. Ms Furbert….

    Any Government that increases the existing tax burden will get rid of themselves believe me. They won’t need any help!

    Let’s agree to go to Step 1: Reduce spending. Act more prudently. Otherwise this will be truly seen as a socialist Govt, i.e. tax and spend.

  14. Mike,

    I have every confidence in the Finance Minister and her team. I have no doubt that the Throne Speech and then the Budget will highlight that Bermuda is in safe hands with the PLP Government, presently led by Dr. Ewart Brown.

  15. And I have every confidence that ‘in safe hands’ will be highlighted. Lol.

    Not sure that ‘safe’ and ‘increased taxation’ come together too well though.

    To be very blunt Ms Furbert, the very thought of this Government developing an Income Tax policy scares the crap out of me. Why? Well, much as I support (ideologically) Future Care, they couldn’t even get that right. Now – could they?

  16. Sara and Jon and any other misguided individual who believes in income tax, there’s something you should know:

    There is not a single jurisdiction in the world that successfully applies income tax to the “wealthy”. Not one. Income tax unfairly penalizes the middle and lower income groups intentionally.

    For example, Warren Buffet, #2 richest in the US, pays less taxes than his secretary who makes under 100k per year. This is fair how?

    Bill Gates has less than 10% of the tax payment of Bill Clinton. Again, how fair is that? But if Gates lived here, that giant mansion would sting him many thousands of dollars a year in land taxes.

    You’re slamming consumption taxes, with no idea of just how much more fair they are. People are taxed on what they use. Essentials are not taxed. Yes, there is a price premium on everything (we live on an island), but that’s a transport and storage cost, NOT a tax.

    Consumption taxes are much more fair. Look at car licensing as a consumption tax. First off, cars have 75% duty on the first $12k, and 150% on every $ after that. This is the first step in a progressive tax. The next is the licensing, bigger, more expensive, more luxurious cars have a much higher cost of annual license. This shows the choice one makes. If you want the CRV, you have to pay more for the privilege. It’s a lot less to do a class A Spark instead. But, it’s still YOUR choice.

    The same goes for land tax. It too is nicely progressive. If you have a multi-room house with a pool and a dock, then you pay much higher land tax than someone with a two bedroom condo. Also, certain prime real estate areas have higher rates than the rest of the island (Pembroke, Harbour Road, Tucker’s Town). Note where the big buildings and fancy homes are. Again, it’s YOUR choice where and how you live.

    So the rich ARE getting much higher taxes than the middle class. Everything from the cars they drive, to the houses they own, their boats, even their luxury foodstuffs, all have much more taxes than the regular fare for the rest of us.

    What all the people who are keen on seeing income tax applied need to realize is that it is THEY who will pay, not the rich.

    Bermuda has had the same basic tax system since 1612. It generally works very well, despite the rampant spending of the past several years. By taxing people on what they use rather than what they contribute, the system is much more fair than any other available. Anyone who thinks otherwise hasn’t done their homework.

  17. A Senate Judicary committee needs to investigate where all this unpayed taxes have been going for the last 50 years since AIG been here. We will be better served as a U.S. island under income tax. Obama has the poor at heart this government is greedy and selfish.

  18. Mike,

    We already have a type of income tax don’t we? I can tell you that there has been no discussion around the PLP table about income tax, so I don’t expect that to be on the Finance Minister’s agenda in the near future.

    I can’t see how you say the Government got Future Care wrong. As I understand it, it was never intended for all seniors to be covered by Future Care in the very beginning.

  19. As I understand it, it was never intended for all seniors to be covered by Future Care in the very beginning.

    Sounds like you’re a minority of one on this one. According to the PLP election manifesto:

    The PLP’s manifesto states: “The PLP Government believes that a fair society is one that takes care of the needs of all.

    “A key policy of the PLP Government is “PLP Future Care”. The PLP Government is determined to do something about the needs of the uninsured.

    “The immediate needs of our seniors will be dealt with by a new insurance product that meets the needs of our seniors.”

    Unveiling the manifesto last week, Premier Ewart Brown said: “Future Care will provide comprehensive health insurance coverage beyond what is currently offered by HIP for seniors aged 65 and above.

    “Future Care will ensure easy access to effective, safe and affordable health care coverage at a time when it’s needed most.

    “The Future Care fund will be established with contributions from employers and from employed adults, aged 20 to 64.

    “We are confident that Future Care will represent one of the most progressive initiatives ever undertaken by a Bermudian Government. A PLP Government will introduce Future Care in the next year.”

    Prior to the election there was absolutely no discussion of restricting the program to a subgroup of any sort.

  20. Great defense – Obama didn’t accomplish something he promised either.

    While it’s a complete aside, Obama may well succeed – the US is looking for an alternative site that they can move all the remaining prisoners to. Presto – Gitmo is closed and Son of Gitmo is open but that’s a campaign promise kept.

    I do have to compliment you though – that was a good attempt to change the topic.

    But back to the topic at hand – there was never even a suggestion that future care wouldn’t be for everyone. Not only was it part of the PLP’s election platform but the RFP that the Bermuda government submitted to various vendors specifically outlined what services FutureCare planned to provide to all Bermudians citizens 65 and over. The universal coverage would be a step beyond the current Health Insurance Plan (HIP)…

    http://tinyurl.com/ybeljjr

    and Minister Bascome said seniors could expect full health insurance coverage by April 1 next year with the implementation of FutureCare. – notice he said “seniors”, not “some seniors”.

    http://tinyurl.com/yc7bj9l

  21. Lord Ren Man. You remind me of a young Policeman who sucked us dry. Then went on to be a member of the Miilion Dollar Round Table.

    The crap will hit the fan but only Onions will be left. Irony/

    I think Eva has covered that.

    Take the money, run, but I did help. Too much ginger beer……………

    If you don’t get it, it’s because you did’nt want to hear it.

    Gotta run……of to help my fellow man….no charge, no interest……..

    I can see your faces……………slime bags……………..

  22. I was not trying to change the topic, I was pointing out to you how politicians make statements or promises during an election campaign with the hope that they will be able to fulfill them. Additionally, I don’t think it was Obama’s plan to move the prisoners from Guantamo Bay to another prison just like Guantamo Bay.

    By the way, it may not have occurred to you that all Bermudian seniors do not want to enrol in Future Care. Many are happy to stay with their private providers. For example, those seniors who are former employees of the BIU and enrolled in the BIU’s health care plan are very happy with it and have no desire to change to Future Care. Certainly there must be other seniors who are happy with their health care coverage.

    While the RFP may have outlined that FutureCare would be available to all Bermudian citizens* (sic) aged 65 and over, it did not give a date as to when that would happen.

    As far as Minister Bascome’s statement goes (and I always say, dead men can’t talk) while he didn’t say “some seniors” he also didn’t say “all seniors”.

    The fact of the matter remains that the PLP Government is doing something to ensure that those seniors who want to take advantage of health insurance plan will have the opportunity.

    By the way, you’re completely ignored the fact that part of the problem that now exist for the Government, is the fact that one insurace company that provided health care coverage to seniors has gone belly-up, and a few others are refusing to cover seniors. In addition to that, there are those private firms, like Telco, who are now refusing to allow their retired staff members to continue with their health care plan. That’s who you should be going after, not the Government. It’s because of companies like them that the Government is having these issues. Government employees will continue to be insured after they retire, as long as they pay into the scheme.

    I’m surprised that the late Minister would use the term “Bermudian citizens” as we are “Overseas Territory citizens”.

    As I understand it, a Party’s platform outlines those programmes and policies that the Party would like to put in place between elections. It is also my understanding that the Throne Speech outlines the programes that will be implemented during the period between throne speeches.

  23. Interesting what you find on the internet.

    If you Google ‘Futurecare’, it is amazing what you find. To be honest, I am not sure ‘how and why’ this came up on the search, but it did. Maybe it’s in the public domain.

    Anyway, it’s the Ministry of Health’s “Request for Proposal” with regards to the Government’s plan to introduce Future Care. I could copy all 9 pages of the Word doc across, but I suspect Jonathan would not be happy with that. Plus, it’s fairly dry reading – with two exceptions.

    Whoever put this brief together (and I assume it requires Ministerial approval prior to release), approved two pieces of information that are incorrect.

    I cannot determine the extent to which these two incorrect pieces of data have brought about incorrect conclusions as to proceeding with the launch of Future Care. Anyway, here they are:

    1) The cost of medical care in the private sector:

    “The problem includes the increasing costs of medical care, and the lack of affordable health insurance coverage in Bermuda. Some seniors would need to pay over $700 a month for private insurance in Bermuda if they want major medical coverage”.

    2) Dependency Ratio:

    The document says:

    “The old-age dependency ratio will soar from 16% in 2000 to 36% by 2030.

    Source: Bermuda Population Projections 2000 to 2030”.

    That is not correct. The Govt stats actually show:

    “The Old Age Dependency Ratio for 2000 was 19.2%. The view for 2030 is that it will rise to 44.8%.
    Breaking that down a little further, the Black Bermudian Ratio of 16.9% in 2000 will increase to 44.5% by 2030; a move described in the Report as ‘soaring’.

  24. Mike,

    I bring that to Warren Jones’ attention tomorrow and see if he can give an explanation. I personally cannot comment on it. Maybe you’ll find some other things that need clarification.

  25. Hello Ms Furbert

    Warren Jones is the named contact on the document. I didn’t release that, as I am just trying to understand this whole issue rather than point fingers.

    Re the $700. Looking back at the info that is available through the media, it just seemed to me that the cost to seniors of private insurance was wide and various. The max cost I came across, for e.g., was $1500 a month. Clearly that is in excess of $700 – but amazingly so.

    I just wonder to what extent that influenced Kuron who assisted in putting proposals together?

    Other points.

    Your quote: I’m surprised that the late Minister would use the term “Bermudian citizens” as we are “Overseas Territory citizens”.

    This is from Minister Bascombe’s Press Conference Press 10:30 a.m. Thursday 19 March 2009.

    “The goal of FutureCare is be prevention-orientated: to improve the health status of Bermudian seniors and to reduce their healthcare costs in the long term”.

    On the question of ‘some’ or ‘all seniors. It is truly a game of semantics to suggest that because the word ‘ALL’ is not used, that that was/was not the intention. Go back to the opening remarks of Minister Bascombe’s Press Conference. His first remark was:

    “First and foremost, FutureCare was proposed in the Bermuda Government Platform in 2007 as a plan to improve health benefits for our seniors; to reduce the number of uninsured seniors in Bermuda, and to make heathcare more affordable for this segment of our community”.

    There is no qualification given. He was clear as to intent, i.e. “our seniors”…”this segment”…..and so on. I do accept that it is not compulsory.

  26. ” In addition to that, there are those private firms, like Telco, who are now refusing to allow their retired staff members to continue with their health care plan. ”

    I think you will find that most companies can not afford to have all retiree’s covered by the such policies, similar to the defined benefit pensions that used to exist. I think BNTB stopped the continuing health insurance a couple of years ago as it would have bankrupted the bank to keep doing so.

    I see you state that the BIU employees can and do take advantage of a continuing health policies after retirement. I wonder how much of an impact this has on the BIU finances and whether the BIU is still viable in the event of employment problems. I guess this would be what results in something like 85%+ of union dues going to salary and administration, and not the members!

  27. Pitts Bay,

    The BIU willingly offers a plan whereby their retired members of staff can continue to benefit from the health care plan that the BIU offers. However, you should note here that the BIU itself employs less than 50 people, including the Gas Station, Credit Union, BIU Headquarters and Liberty Theatre (which is no longer run by the BIU).

    Can you cite a ducument which shows that 85% of Union dues goes to salaries? You should also know that all of the BIU’s income is not gleaned from dues. Do your homework before you try and challenge me.

  28. Would love to do my homework if the union would provide the financial statements it is obliged to under law, but somehow doesn’t.

  29. On gambling – I cannot for the life of me fathom why we’d want to move from a society built on hospitality and international business to a society built on gambling. If you’ve ever been in Las Vegas or Atlantic City during the day, you’d know why.

    It reeks of desperation coupled with the Premier’s personal interest. I could care less what his personal views on gambling are, the fact remains that the public don’t want it. And that he tried to sneak it through the house (funny no comment from Laverne on that action) only to have it rejected by his own party just tells you how desperate he is. We should be better than to have to resort to gambling.

    On income tax – Progressive income tax only works in text books. Fact. The only argument for instituting income tax in Bermuda is because there is simply no other way to get enough government income. In that case, I would look at the other half of the equation.

    Public expenditure has trebled. Of course we’re going to face shortfalls. And please tell me, has our quality of life trebled? Are our roads 3 times nicer? Our parks 3 times cleaner? Schools and health care 3 times better?

    Our government has spent poorly, inefficiently and with shocking management of large capital projects. And their solution isn’t too get more efficient, or to trim their outrageous spending, no its to come up with ways to get more money.

    Because Bermuda has been lucky over the past 10 years, we’ve been able to take that approach. Because of IB continuing to come in through the early 00’s, (thanks Katrina!) the PLP have never had to create a budget in tough times. They’ve been able to look at things like Berkley and say, oh, we’re over the budget by 100%? No worries, through money at it. But financial responsibility is not over-rated, and it’s in the hard times that we are truly measured.

    How do you think the PLP are going to do?

  30. Ms Furbert – I just read the financial statements that are issued by the BIU (mind you they were somewhat dated, and I think rejected by the Registrar). Are you saying they are wrong?

    Just wondering!

    PB

  31. Just to clarifty, dr Brown did NOT bring up the topic of income tax…that was brought up by the reporter, and Dr Brown said that while it isnt something he expects to do, nothing is out of the question. What is so wrong with that answer? I find nothing wrong with that response. You can not like the man, but to take his every comment and twist it into something sinister is a little insane.

    Secondly,

    As far as gambling, Dr Brown has never denied that he would like to see gambling introdued in some form – whether just for tourists at speciial locations etc. So I dont understand the hoopla over that comment either. I personally as a PLP supporter am very disappointed that government was unable to pass the legislation to allow cruise ships to open their casinos in port. I felt it would nothing to harm our community, and would bring additional revenues into the country.

    what bothers me is that many people are concerned about income for the country, yet are unwilling to think outside the box. I am in no way advocating turning Bermuda into the Las Vegas Strip, but cruise ships having their casinos open late at night to me is a win win for Bermuda especially when to get that concession they would be obligated to pay taxes to us, provide scholarships for our students, employ Bermudian staff potentially etc.

    I wish we would all stop commenting purely emotionally and put a little practicality and common sense into play.

  32. LaVerne,

    Hate to tell you but Minister Bascome was quite clear that Future Care was to be available to ALL seniors:

    February 15, 2008 — Health Minister Nelson Bascome says: “FutureCare will be a health plan for all citizens of Bermuda aged 65 and over and will ensure access to effective, safe, coordinated, and patient-centred health care.”

    http://tinyurl.com/yexgslw

    Feb 20th and March 11th he announces that Future Care will be available to those already enrolled in HIP which led to this admission by Warren Jones:

    Health permanent secretary Warren Jones told The Royal Gazette that pensioners were purposefully not told that the only way they could be a part of the much-vaunted scheme was by ensuring that they were already in the basic state Health Insurance Plan (HIP).

    Mr. Jones said that when that fact was revealed by Health Minister Nelson Bascome on March 11, Government was “inundated” with requests from seniors to join HIP, could not afford the numbers and so closed the doors on the scheme. HIP is now unavailable to pensioners and less than half of the Island’s 7,000-strong senior population will enjoy the greater benefits offered by FutureCare for at least the next year — despite Mr. Bascome promising in February 2008: “FutureCare will be a health plan for all citizens of Bermuda aged 65 and over.”

    http://tinyurl.com/ydyrfg7

  33. No new taxation is needed. An honest government that can balance a budget, reduce wasteful spending and keep their sticky little fingers out of the honey pot would see us through tough times.

    Alas, we may be in trouble.

  34. Pitts Bay,

    Are those statements available to the public? And what do you mean they were rejected by the Registrar?

    Letariatpro,

    Are you talking about the civil servants or Members of Parliament when you speak of “sticky little fingers”?

  35. Minister Paula Cox reaffirmed the PLP Government’s commitment to responsible management of Bermuda’s budget and economy. She criticized those who make irresponsible assertions and reaffirmed her commitment to correcting misstatements. Minister Cox, in full:
    Reputation is everything and irresponsible assertions do not serve Bermuda well or her people and it is important to refute categorically misstatements.
    The focus in our budgetary analysis is to promote economic growth and stability and to ensure that we keep the people in the picture – our residents, the public sector employees and the private sector. That is why we took the bold and innovation action in assisting a key financial institution and local bank, notwithstanding the misgivings and the naysayers.
    We are committed as a Ministry of Finance to preserving the economic stability and sustain ability of Bermuda and her people.
    Also given the global economic tsunami we appreciate that when Wall St catches a cold, the rest of the City sneezes. That’s not going to change anytime soon. But it’s the job of policy makers to prevent that sneeze from becoming pneumonia. Bermuda policy makers face similar challenges.
    While we did not recklessly cut taxes as many conservatives wanted. We started trimming the budget where we could without sacrificing key Government initiatives and programmes.
    The bottom line is this… a basic information presentation was given to the BPSU by the relevant technical officers to the Union, at their request, it is interesting that within two hours it is on the news. We welcome the transparency but communicate the correct information – do not misrepresent or misstate – that serves no one in Bermuda’s interests and is reprehensible and unconscionable.
    The presentation basically gave an outlook on the economy; actual revenue and expenditure numbers for 2008/09 which is not new news. We already indicated that revenues for 2008/09 were below budget projections.
    We also indicated that the current economic climate would have a negative effect on Government revenues this fiscal year and Government was preparing for any revenue shortfalls in terms of budgetary projections and expenditure. The aim is to be prudent and to use the prism of affordability. The numbers mentioned are obviously incorrect and need to be refuted.
    Further I would note, in the National Budget Statement for 2009-2010 presented to the House of Assembly in February 2009, Government made it quite clear that the economic slowdown would have a negative impact on Government’s total tax yield in 2009-2010.
    Government went on record that it would address any event that posed a systemic threat to the stability or viability of a key economic sector. As part of the economic strategy, none of the major taxes were increased and many tax concessions were extended to assist businesses in a challenging economic and financial climate.
    Payroll tax provides the single largest revenue stream and is paid on a quarterly cycle at the end of June, September, December and March. Consequently, short-term credit facilities have been a standard and standing component of Government’s financial planning to smooth cash flows over the course of the full fiscal year.
    Customs duties provide the next largest revenue stream and together these two tax sources account for 60 per cent of the $969 million revenue budget in 2009-2010.
    From April 1, 2009, qualifying retailers were provided with an opportunity to defer part of their customs duties for up to three months in anticipation that imported merchandise would be sold within that time frame. There have been concessions on payroll tax, land tax and hotel occupancy tax.
    Taking account of these key facts and circumstances, Government stated in lucid terms that in order not to severely impact its own cash flows while it was providing assistance to businesses, it would amend the Temporary Loans Act to provided for enhanced short term credit facilities should the need arise. All measures have been put in place in a planned and prudent manner.
    Therefore it is arrant nonsense for anyone to suggest that Government approached a banking institution because Government was unable to meet its payroll. It appears that some under-informed observers have likened Bermuda’s fiscal position to reported stories of some other jurisdictions in crisis conditions. Such a suggestion is naïve and certainly not in the national interest.
    Further to that, Bermuda’s debt levels remain prudent and amongst the lowest in the developed world.
    The debt is sustainable and it has been used to finance needed improvements in infrastructure and other hard assets such as airport runway improvements, new school buildings and related equipment, new cruise ship docks, golf course overhauls and law enforcement equipment and facilities that will provide service to people and businesses in our community for many years.
    The rating agencies have reviewed Government’s fiscal plan and its borrowing strategy. Our investment grade ratings have been maintained in these very challenging times. The Ministry of Finance has marshaled all resources at Government’s disposal for the implementation of economic and financial contingency plans where such a response is necessary. You will recall the recent assistance given to health policy holders of an insurance company that is being wound up to protect policy holders and creditors.
    As I said in February: We have stood the test of time and as a community, despite the challenges, we will be fine and we will succeed as a country together. Each one, reach one. Each one, help one. That is the essence of the Bermuda spirit.
    Let’s reiterate: Bermuda’s debt levels remain prudent and amongst the lowest in the developed world. That’s an important point and speaks to the capable management of Minister Cox and the PLP Team. It’s up to fair minded journalists in Bermuda to check their facts before reporting incorrect information.

  36. “On gambling – I cannot for the life of me fathom why we’d want to move from a society built on hospitality and international business to a society built on gambling.”

    Las Vegas in 2007 had about 151,000 hotel rooms, they had a 95 percent weekend occupancy rate, and the weekday rate fell just shy of 90 percent.

    With the 1993 and 1996 openings of the Foxwoods Casino and Mohegan Sun, Many of the visitors to these casinos come from the tri-state area. Foxwoods is a two and a half hour drive from New York City. We are a two hour flight; with a world class casino we might be able to draw a portion of their patrons.

    Each of these casino’s gives the state 25 percent of its monthly slot machine earnings, the total payment to the state since January 1993 from Foxwoods is 2.8 billion.

  37. “Are those statements available to the public? And what do you mean they were rejected by the Registrar?”

    Ms Furbert – I am referring to the financial statements filed at the Registrar General for the period 1999 – 2002, which were subsequently returned to the Bermuda Industrial Union, purportedly for not being in the correct format. I do not believe that they are currently available, or that updated financial statements have been submitted by the Bermuda Industrial Union. That would mean no financial statements (as required by law) for a period of 10 years now !

    If I recall correctly, in 1999, wages, salaries and administritive expenses amounted to 70% and the average of 1999-2002 amounted to approx. 88%. Do you think that bodes well for the members or the employees?

  38. Oh, okay, now I understand, having read a copy and paste of the finance minister’s speech. Thanks. For. That.

    Oh and no one form an opinion based on it or anything else, because that, my friends, is the gospel, and to analyse it is blasphemous.

    So the person whose responsibility is to ensure prudent management of the economy has come out and said that she is doing her job. Shock. I think my performance reviews at work should go that way. Well, we were going to ask your manager how you performed this year, but instead, we figured we’d just let you say how you think you’re doing, and judge you on that. Sounds objective to me!

    As a complete aside, does anyone know what the ‘prism of affordability’ is?

  39. I think it would be inappropriate for me to comment any further on the BIU’s financial statements.

  40. LaVerne asked:
    “Are you talking about the civil servants or Members of Parliament when you speak of “sticky little fingers”?”

    I would be referring to both thank you for clarifying. One hears so much through walls and windows.

  41. Letariatpro,

    If you have evidence of MPs and civil servants having “sticky fingers” I would suggest you make a report to the police.

    Rummy,

    I no it’s hard for you to understand why it would be inappropriate for me to comment on the state of the financial affairs of the BIU.

  42. My understanding is that the Premier is worried that the US may clamp down on Bermuda so Bermuda needs new sources of funds. Wasn’t the “humanitarian” action of smuggling in the 4 Uighurs (anti Chinese) supposed to fix that? Except what do we see today – President Obama is denying a visa to the Dalai Lama so as not to annoy the Chinese. Looks as if someone here wasn’t paying attention.
    If the Premier and his Cabinet (if he involved them) would pay more attention to Bermuda and not his adopted homeland then perhaps actions would be taken in Bermuda’s interests and not personal interests.

  43. Indeed Robert…we should welcome Bermuda to the wider world of International politics! A game with potentially interesting outcomes.

    The irony of the US not wishing to upset China…and we do that in a single stroke of the ego!

    Amazing.

  44. it’s a new world order, China will overtake America, the only question is when. While EB travels the globe ,wasting millions,digging a deeper hole to third world status for this tiny rock,Arab states have launched secret moves with China, Russia and France and G7 to let the dollar fall.

    We the people the TAXPAYERS WHO PAY THEM need another march against the wannabe dictator ,and his useless tribe of incompetents

  45. Ms Furbert

    I am glad to see that the BMA and the MoF have proposed new legislation and regulations to govern Credit Union (the BIU Credit Union being the only one on the Island).

    Hopefully this will go a long way to strengthen the rules and regulations applicable Credit Unions, which will in turn protect the interests of the members – a Credit Union is essentially a Co-Op type of enterprise that should operate on a non-profit basis for the benefit of the members.

    I would hope that the new regulations will also limit the lending activities of such Credit Unions to fit and proper loan facilities and that the members at large will in turn get to benefit from attractive interests rates when they borrow funds.

    It is a start.

    PB

  46. Pitts Bay,

    I’m impressed that you read the Workers Voice, however, you need not have explained to me what a credit union is. Remember, I wrote the story. But then again, maybe you’ve written what you’ve written for the benefit of others who read this post.

    I don’t know how you would know about the “lending activities” of the Credit Union, unless of course you are a member of the BIU.

    As I understand, the BIU Members Credit Union is compliant with BMA regulations and because the BIU Members Credit Union is the only such entity on the island, the two organisations are working together in the interest of all interested parties.

    If you have something to contribute to assist either the BMA, or the Credit Union, I’m sure your input will be appreciated.

  47. Pitts Bay, as I said, any help that you could offer either organisation (BMA or BIU Members Credit Union) would be helpful. Although the “Credit Union” is the only one in Bermuda, we know that “Credit Unions” are global institutions, that are quite respected.

  48. Ms Furbert

    I have print off the draft legislation and the position paper and will provide the BMA with any comments or observations that I have. The position paper does seem quite thorough. But, with all these things, the devil is in the details.

    PB

  49. Here’s a thought: Laverne Furbert said that Bermuda’s seniors can’t get health care coverage, because private insurance companies are unwilling to offer it. Why can’t Bermuda adopt a health care system like Canada where people are taxed a bit more, but get FREE healthcare. Heck, I’d rather pay 10% more in taxes and not have to pay anything to an insurance company, because I believe that people’s health should not be dictated by profits. Thoughts?

  50. Just as a follow up to earlier posts on our fiscal management – read in the RG that this year will be a new record for Bermuda! For the first time in recorded history, we’ve managed to consecutive years of current account deficit! Good job guys! Let’s go for 3!

  51. I honestly believe that we have not seen the full effects of economic downturn here. Bermuda is not immune. I think the condo developers sitting on all their empty condos think the market will suddenly bounce back. Not going to happen. They are screwing themselves by not lowering prices to get these condos sold.
    The government will continue to be in never before seen debt.
    Regular people will have to bail out the government.
    And it is WAY TOO LATE in the game to just expect gambling to be the cure all.
    Most Bermudians DON’T want gambling here. Time for plan B Dr. Brown.
    He never expected this gambling thing to be an issue because he always thinks he knows what is best for Bermuda and that people will just do what he says.

  52. “He never expected this gambling thing to be an issue because he always thinks he knows what is best for Bermuda and that people will just do what he says”.

    If 4 or 5 hadn’t snook back into the House that day and voted – that’s exactly where we would be!!

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