Initial Look At 2011-2012 Budget

I have just finished reading over the 2011-2012 budget, although I fully admit that I have not gone through the statistics and graphs sections of it. Instead, I have focused on the written section which, to me, presents the overarching theme of the budget, and indeed provides indicators for the policy positions that Premier Cox will be developing throughout her tenure.

While this is only an initial review, and a lot of the detail about where cuts are going to fall appears to be delegated to the individual Ministries, overall I give the Budget my cautious support at the moment. Honestly, there isn’t a lot in the Budget that I take issue with, although there are some sections I am wary of, and others that need fleshed out before I can really take a position on. Additionally, there is an argument from some people that Ms. Cox is highly skilled at saying nothing with lots of words, and as such the Budget itself may very well be a lot of nice words and no real substance. However, I am actually quite impressed with the subtext and directions indicated by the Budget statement and am willing to give the Premier the benefit of the doubt on this.

One of the first observations that struck me in reading the Budget statement is that there seems to be a clear subtext running throughout the document which pretty much appears to be extremely critical of the previous Leader’s administration. Premier Cox appears to be stressing the argument that under the previous Leader she had been over-ruled in the decision making and, at best, had sought to mitigate what she percieved as poor decisions. Her argument is that she was (infamously) a mere cog previously, but now, as both Premier and Finance Minister, she is able to correct the excesses of the past and is trying to put Bermuda on a new course. The focus on tightening government controls on tendering, developing clear policies on conflicts of interest issues, and terminating a number of (somewhat) signature policies pioneered under the previous administration, as well as what can only be described as an aggressive critique of Tourism policies and initiatives in the past, all seem to reinforce this impression. Always mindful of avoiding conflict though, I think she has rather skillfully attempted to criticise without doing so completely openly, although it is hard not to get the impression she is trying to draw a line between her Leadership and her predecessors.

Whether or not she is acknowledging that mistakes were made in the past or just that there is a perception that mistakes were made, isn’t immediately important, although I can believe it could become so as the reaction to the Budget crystallises.

I am particularly impressed with her advocacy of longer-term (three year) budgetary planning and ‘open budgeting’ which would appear to be a nod towards developing a participatory budgeting model. I have advocated both of these in the past, although the mechanics of their practical implementation (at least for participatory budgeting) is key question. Overall I take it from these advocations that Ms. Cox is stressing that policy needs to be more long-term and joined-up in its development and implementation, and that there is a democratic deficit that needs to be bridged. Democracy should not be reduced to five seconds in the voting booth, but should extend into overall governance. This is, potentially, a very radical (but incremental) development, and I welcome the opportunities that it opens for transcending liberal democratic frameworks and developing a more popular democratic system (although there is a risk that it means greater power to capital rather than civil society).

I am, perhaps unsurprisingly, not in favour of cuts and redundancies. Even from within the capitalist framework I feel that such an approach is counterproductive and more likely to initiate a ‘double dip’ recession. Furthermore, I am unconvinced that the neoliberal capitalist model is superior, in economic growth (and especially in terms of social equality), to the more social democratic Keynesian model. At most I think the neoliberal model is superior in increasing profit maximisation for capital, but the Keynesian model appears more sustainable and equitable, without reducing overall growth (only more of the profit is manifested socially rather than privately). To that degree I am supportive of the fact that no civil service jobs have been cut. I am, however, wary about cuts to some key social services, notably education, although I need more details here before forming any hard positions. I do predict, however, that the Opposition’s will adopt a more neoliberal critique of the Budget and will likely advocate civil service cuts and privatisations. It will be necessary to prepare the argument against this.

I will write more as details from the individual Ministries and reactions from the Opposition’s and fellow pundits become available.

The only additional comments I will make is that, despite‘s opinion, I do not think this is a pre-election budget. Of course, I could be completely wrong, but I still doubt that Premier Cox will go to an early poll. I personally think she will want to oversee the reforms she argues for in the Budget Statement, avoid burdening the economy any more than necessary (which a general election could do) and benefit from the predicted economic recovery in 2012. Even with the apparent UBP recombination that appears to be a fait accompli, I doubt the NewBP that might emerge will pose a significant challenge to the PLP until, perhaps, 2016. An early election will only have marginal benefits, and Premier Cox may well decide that there would be greater benefits to a later election. I’m ready to eat my hat in the event she decides to prove me wrong on the timing of the election though!

2 thoughts on “Initial Look At 2011-2012 Budget

  1. Paula’s ability to ‘predict’ is historically poor, as these numbers from Bernews shows.

    The approximate differences between past revenue projections and actuals for previous years:

    2004/05 $694m Projected $783m Actual = 12.8% over
    2005/06 $750m Projected $814m Actual = 8.4% over
    2006/07 $835m Projected $884m Actual = 5.8% over
    2007/08 $917m Projected $929m Actual = 1.3% over
    2008/09 $985m Projected $950m Actual = -3.6% under
    2009/10 $969m Projected $917m Actual = -5.4% under
    2010/11 $1,058m Projected $977m Actual = -7.7% under

    It’s staggering, therefore, that this budget is at least partly reliant upon her view that we should start to come out of recession in 2012.

    Where are the indicators that this is so Paula?

  2. Pingback: Premier Cox’s Easter Speech « "Catch a fire"

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