2012 UBP’s Reply to the Budget – Part Two

Follows on from the earlier post…

…the government itself embarked upon several huge capital expenditures when private sector construction was already booming. We in the United Bermuda Party warned against this overheating of the economy. Unfortunately, our advice was not heeded. Had it been, properly timed government construction projects would have been providing stimulus during the recession period we are in now.

This is true. Future infrastructure developments need to be better phased in, and hopefully the proposed National Infrastructure Plan will help with that. Alternatively it could be argued that the infrastructure developments in question (cruise ship pier, Lois-Browne Evans building, etc.) should have been implemented earlier and that it was not possible/advisable to leave them ‘on the backburner’ any longer.

Hence an argument could be made by the PLP that the UBP failed to develop required infrastructure as needed for the 21st Century when it was in power, and so the PLP was forced to expend capital on rectifying this situation. There may be merits to this argument also, although the PLP still leaves itself open to criticisms for how it actually implemented the infrastructure developments in question.

They make some good rhetorical use of the Premier’s own words, notably the quote ‘leadership is doing the right things’, used by Ms. Cox in her budget. They agree with the sentiment, but turn it around and use it to attack the PLP. They quite clearly use it to argue that what the country has seen from the PLP, and Ms. Cox in particular, is hardly leadership or ‘doing the right thing’, even if the elevation of the Finance Minister to the Premiership has been marked with an attempted organised retreat on policy fronts and tacit recognition of previous failures. That Ms. Cox could have displayed leadership previously and saved the country (and her Party) a lot of grief is the underlying argument here, and not without reason.

Tourism:

They then launch a blistering attack on the focus on cruise-based tourism as opposed to air-based tourism, making a clear argument of a fundamental error on the part of the PLP:

The problem is simple. The PLP government spent nearly $70 million on a new Pier to facilitate 200,000 additional cruise ship passengers
~ This pier allows for 200,000 additional cruise ship visitors each year
~ On average each cruise passenger spends $120 in Bermuda
~ This adds $24 million to our economy each year
~ Between 2002 and 2011 the number of cruise ship visitors doubled, from 200,000 to 400,000
~ If instead we had 200,000 additional air passengers, who stayed in hotels, cottages and guest houses, etc.
~ Based on the average dollar amount each of these spends in Bermuda, which is about $1200.00
~ That translates into $240 milllion into our economy each year.

It’s hard to find much wrong with such an assessment, other than to say $24m is better than nothing, but it does bring home that it could have been quite different, with an alternate investment of resources to develop air-based tourism. Of course, the PLP can counter that they tried very hard to develop new-build hotels, and argue that this was largely a casualty of the global economic crisis. It is, however, a bit hard to see how the crisis, starting in about 2007/2008, prevented much development in this front during the PLP’s first decade of power, even if it is a valid counter since.

The UBP further argue that, for tourism at least, the PLP have displayed a fundamental inability to develop a long-term plan. One hopes that the (still developing) national tourism plan will correct this considerable error, and it is a wonder we didn’t have such a thing before. The lack of long-term planning and strategy does seem to be a certain hallmark of the PLP’s governance, in general, although the Sustainable Development Plan is a notable exception here. That this plan generally didn’t include tourism, and was widely perceived (imho) to be ‘downgraded’ under Dr. Brown’s Premiership (in both political importance and devotion of resources) is another matter altogether. On it, though, much of the recent scramble by Premier Cox to develop national plans (tourism, infrastructure), also various things like the Good Governance legislation and the Office of National Procurement, all stem from the SD Plan – they are not novel policies of Premier Cox. The EEZ’s too, originate from the SD Plan.

On the Economic Crisis:

“It is ironic that much of the fault of Bermuda’s economic woes is laid at the feet of the global economic recession. Truth be told Mr. Speaker, this PLP Government was slow to acknowledge that the country was feeling the effects of a recession. In fact, in 2008 it took the unprecedented move by then US Consul General Mr. Gregory Slayton to publicly warn Bermuda of the threats of a recession.”

This is true, although it is not clear to what extent. It is clear that superficially the PLP continued to present an overly optimistic view of the economy, and certainly they generally failed to make any clear policy or budgetary moves. One wonders to what degree they were trying to avoid a self-fulfilling prophecy, in that they sought to maintain investor/business confidence by adopting an overly rosy approach.

Nonetheless, and yes, hindsight is 20/20, the expenditure at that time (from 2006) was reckless by most measures, and it is questionable if we even got value for money/returns-on-investment on what we spent it on. A more prudent approach would have been to, yes, spend on infrastructure improvements, but do so more conservatively, more strategically, more long-term planning, in addition to ensuring we were prepared for a ‘worst-case’ scenario, just in case. The PLP remains considerably vulnerable on this point and seems unable to develop a counter to it.

Education:

We call on government to broaden and enhance the reach of our only college, especially, in the area of technical training, by following through with partnerships, locally and overseas, to develop technical education at the local level.

I agree in large measure with this sentiment. This is certainly something we could and should be doing. I disagree however with the attempt to lay all the blame for education at the PLP’s feet though. While the PLP certainly should have done a lot more in the last 14 years, educational problems can often be generational, with problems resulting from past generations limitations. As noted though, the PLP certainly should have done a lot more since 1998, the issue of education being one of the key things people expected the PLP to actually considerably improve.

I am wary though of what I see as a pro-privatisation theme by the UBP regarding education though, including what seems to be a call for adopting the Academy model set-up in the UK under Blair’s Goverment. These have a whole host of problems of their own, despite the propaganda generally surrounding them. I don’t have the space here to really focus on it though, but will try and do that in it’s own post in the future.

St. George’s:

I question the idea of a “Public Private Partnership that will seal the deal for The George Hotel & Marina to become a reality for this world heritage site” – I’m personally concerned about the ability of the Town to handle this proposal, in addition to the more likely Club Med site. I’m also wary about whether the George Hotel & Marina would have a negative impact, in itself, on the Town’s World Heritage Site status. I am however in agreement with restoring the golf course there, and developing the infrastructure for the east-end ferry.

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