Initial Thoughts On The Budget

Okay, I’ve only read over the Budget once, and not completely in-depth yet. I’ll be doing that over the weekend, and checking a few things out as well. I hope to write a more in-depth review of it after I’ve had the opportunity to do so. Having said that, my initial thoughts are:

I welcome the expansion of the Payroll Tax from $350k to $750k. However, I do question why it is capped even there – as far as I’m concerned there should be no cap. Furthermore, I would prefer to see the tax changed from a flat tax to a progressive tax, so that people earning below $100k only pay 5%, between £100-200k the tax should be 15%, and for it to increase by 2.5% per additional $50k.

I am strongly opposed to the idea of effectively robbing the pension funds. Government discussed some years back setting up some sort of unemployment fund just in the case of a major economic disaster but decided that the economy was good so they never set it up. Had they done so when the economy was good we wouldn’t have to jeopardise our future now. At the moment though, I think we can cut down quite a bit on some consultants fees and put that money to helping out people who would otherwise rob the pensions now.

I find it surprising that public transportation still isn’t free, and would support increased taxes on grades of cars above A, as well as increases on gasoline taxes, and the money raised from this going to subsidise public transportation.

I would also like to see increases taxes on tabacco and alcohol, with the money raised going to either subsidising health costs or fruit and veg.

I think there are some misplaced priorities at the moment. I see there is an increase in funds to Tourism, and while I can understand the idea behind that I think it would be better to spend the money on repairing our general infrastructure (and help maintain jobs during the recession). Afterall, whats the point in advertising the country as a tourism destination if the product is degrading? I would particularly have liked to see an increase of funding going to the Ministry of the Environment (with long-term benefits coming to tourism in the form of eco-tourism potential, parks facilities, improvements at BAMZ), culture (with obvious tourism benefits) and infrastructure projects like a wastewater treatment plant (providing water for our plants).

I like the support for green technologies.

That’s all for now, but I’ll write more after reviewing the Budget again.

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21 thoughts on “Initial Thoughts On The Budget

  1. Oh my god, could this be any worse. More spending on tourism? So we can plan more million dollar events only to get thousands back on the return? I mean seriously, this has gone way too far! I am so mad, sad, depressed about this whole situation. What a bunch OF JERKS! For real they are a bunch of elite jerks as far as I am concerned every single dang one of them!!! Oh and cowards too!!!

  2. Agree with your thoughts on the cap on income tax, oops I mean payroll tax. Happy to say I’m leaving Bermuda in three months to go back to the states where my taxes are lower and my politicians are honest about being crooks.

  3. I find it surprising that public transportation still isn’t free, and would support increased taxes on grades of cars above A, as well as increases on gasoline taxes, and the money raised from this going to subsidise public transportation.

    Not surprised here, although I think it would be an excellent idea. It’s a good type of consumption tax, and could doubly serve to encourage people to leave cars at home in favour of public transport where possible.

  4. Free transportation = empty election promise, we’d have to pay for it some how. No government service is free, it all eventually comes from us.

    I do like your progressive payroll tax idea though, very much so.

    Borrowing money or taking money from pension funds…..VERY BAD BAD BAD IDEA. Wrote about this over on 21 square….people live longer, stretching pension further, more reliance on Government, more burden on our children…yadda yadda yadda. No forsight here. It’s a cry from the Government that “WE HAVE NO MONEY FOR YOU SO GO GET IT YOURSELF!”. I wouldn’t mind this too much if they didn’t also raise taxes as the same time thus reducing, effectively, peoples net income further from last year to this one.

    If Government was to tighten it’s collective belt by 10% last year, shouldn’t the budget be less then? Should we have given tourism more money given it’s dismal performance? Forcasting the economic year, do you think people will be more or less likely to travel? There are so many areas that Government could have done to tighten up enough so that taxes shouldn’t have gone up, but no now local business and the common man will feel the brunt of this and it’s wrong.

  5. @Sean,

    Yes – it is wrong, but sadly it will not make for a change at the polls. And I suspect the PLP know that.

    There is absolutely no evidence of the two demands for belt tightening in the Ministries – none whatsoever.

    The idea of allowing people (subject to certain rules no doubt) to use part of their future income (pensions) may well be politically astute – but is totally the wrong message to send out. Yes – I know people can decide to do so or not – but that is not the point.

    The additional payroll tax will only ‘hurt’ those who are currently struggling financially. Perhaps if the mechanism had been available, it should only have been applied to those earning above a certain figure – say $70K. I am concerned as to how landlords will respond to the increases in land tax – passing them on to tenants as they will surely do.

    I haven’t quite got over the fact that Brown can spend on one night in a hotel – what would be two months + rent for many on this rock.

    John has already mentioned the increase in monies to tourism. It beggars belief that we simply keep pouring money down the toilet in this way.

    @Sara

    I likewise am depressed at the thought of this merry go round – continuing to go round and round. Our only hope is that one day – it will stop – and common sense will prevail. And I am talking financial common sense; not the politics.

    Sadly, I don’t see that possibility in Paula Cox.

  6. No stimilus package, no recession check for the poor (less than $10000 n savings acc.) $1500 every month for six months.
    free college and transportation to rich and middle class is corrupt jus like tax exemption for small corrupt capiatlist businessmen.
    where is the 50% increase in land tax for greedy landlords?
    Government has been RAPING the taxpayers for years thats why they are $600million in debt or in greedy corrupt politicans bank and stock option portfolioes.
    How much shares does Paula Cox have in Bank of butterfield?
    Privatize education give welfare checks to the poor wait maybe i should read it first laverne Furbert.

  7. The war on terrorism is why the world is in recession. But wait a minute bermuda did not spend trillions on war so it should have had money saved for a stimulus package in case the world recession hit Bermuda.
    But instead elite Budgeting by Bobby Brown and whoever else can fit in the Penthouse with him.
    Now this waste money and party economics has Bermuda $600million dollars in debt. Time for flyers. Tshirts at Cup match.
    Borrowing money is the source of growth and consumer confidence if it stays in the island and circulates cutting the budget will lead to a deeper recession and drop in real estate hopefully the banks give out small loans to give people hope.
    But Paula Cox looks like a bookworm without common sense right now.

  8. With the exception of raising the cap on payroll tax (why was it there in the first place!?) This is not the budget of a socially conscious leadership. Not even close.
    The raiding of pensions is beyond appalling. Irresponsible is not enough of an adjective.

    Johnny, the things that you would have liked to have seen in the budget, which I largely agree with, have a snowballs chance in Hell with this government.

    The working poor have been further marginalised and squeezed with increased taxes. The Job market will shrink.
    People like Gina Spence’-Farmer and her ilk will be left to clean up the growing mess whilst the “leader” continues his farewell world tour.
    What a sad state of affairs..

  9. She glossed over the 2% payroll tax hike and allowing employers to pass on 1%. Doesn’t sound much, but when the paypackets arrive, the worker will find his tax has increased by 20%. How? Taking a simplistic example, presently on each $100 the worker pays $4.75, but this increases in the Budget to $5.75. The difference is $1 which is roughly 20% of $4.75. Big difference to 1%.
    Allowing people to raid the pension is absolutely crazy – it was the PLP that brought in the regulations to stop this very situation.
    With the world about to go into another recession, and when IB doesn’t replace expats and the creative part of the economy further contracts, there is no chance of 1% growth, so the debt will increase as Government won’t cut their spending. 2010 will not be pleasant.

  10. Since GOVT like to spend so freely on their own personal bull, they have brought the island so close to a distaster it is crazy. And not just economically, our waste management is so close to boiling over that we could see the island going back to dumping and a back up of waste like you have never seen before. It is a potential crisis that is being held back by a thin sheet of paper and GOVT will not have the monies budgeted to change it, funny(or not so) part is that they have been told for the last 10 years that the system needed to be fixed and changed and they ignored and conintued on other things and the incinerator is pretty much broke and held together by duct tape. Get out your gas masks, this budget stinks.

  11. Perfect timing. When companies are concerned about the cost of doing business in Bermuda and jobs are moving off the island this government has just made it more expensive to hire people here. Absolutely brilliant (at least it’s brilliant if you’re trying to convince companies to move jobs to India or some such place).

  12. ok
    how does an increase in payroll tax improve the ability to hire out of work bermudians? This is not a budget that will fight recession.

    sounds like the people have the right to strongly protest this.
    time for sum marches to force a rethink…if u dont protest this then expect more crime from the unemployed.

    and how is it possible for others to say bull**** when i always get censored…..lmao

    *Because I’m not perfect and missed it – Jonathan***

  13. “Although the public may not wish to pay more for the increased public services they desire, it is incumbent that we have a tax model that does not perpetuate spending without an increase in the revenue stream,” she (Paula Cox) said.

    For me – this wins the ‘Arrogance of The Year Award’.

  14. These guys are unfreakin believable!
    @ Blackboy

    You are right, must protest. But I hate to tell you some of us already did that and were accused of being a “lynch mob” of whites. So, the people that stand up to protest HAVE to be disgruntled PLP memebers, NOT people that voted for the UBP( they don’t count cause they don’t equal votes for PLP)
    Do you understand how important it is that only PLP voters can protest and be taken seriously by this government? It has to be blacks protesting, NOT whites, they don’t count!!!

  15. How surprised about the taxi payroll exemption? Huh, I guess the taxi drivers are just in such a bad way compared to the rest of Bermuda!! I mean does this not stink of favoritism? They probably threatened to note vote for PLP and got what they wanted!! Does evryone see how this works, great example here. Large groups threatening to not vote PLP GET WHAT THEY WANT!!!!!
    Why doesn’t the poor get a break on payroll taxes instead of a group of taxi drivers? Does these reek or am I going nuts?

  16. The middleclass swing voter is being protected here again. Political skill is too valuable for a jail cell.
    Most of these protests have ben organized when evryone is working.
    Paula Cox is worse than Brown already she will be slaughtered by the poor.
    But Brown must be buried first.
    Go to hell.

  17. philip perienchief is de only person in the entire plp party that has supported labour in his opinions over the new budget.

    the plp needs to make this man the premier and get down to makin bermuda inc work for all citizens

    if the people of bermuda dont resist this budget and force a rethink i garuntee you crime will increase and violence with it.

    if theres is no mass public out cry then u are all fools who truly deserve the social backlash you r plantin seeds fa

    ALL POWER TO THE PEOPLE BY ALL MEANS NESSICARY

    Starling u should get the media to report on the comments of ya blog

  18. Johnny,
    with regards to increasing levies on cars above class “A”
    I think it should be taken into account that the classes are currently done on body length of the vehicle.
    A larger car may be a Mum with four kids who is struggling financially, but needs the room.
    Or it could be a 15 year old beaten up station wagon used by an odd job man for his business,
    Meanwhile some of the hedgehog squashing shiny SUV’s are a shorter wheel base (lower class) and a vanity vehicle.

  19. Huge problem (mistake) letting people tap into their pension monies – most bermudians have only had pensions since 2000 (except civil servants) and therefore most dont have a lot there – much less than they will need – if people are hurting now its for GOV to take the neccessary steps to provide for them (welfare food stamps dole call it what you will etc.) to say they can tap into their pensions now is a way for gov to sidestep its responsibilities – terrible idea.

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