Vexed Bermoothes

Some comments on the budget, projected at $1.2 billion (including $1.05 billion of revenue).  At 39 pages (down from 48 last year), it continues the negative trend of providing less information as the dollar amounts get bigger.

The economic dislocation and the financial turmoil of the last two years was a one in 100 year event. No one could have predicted it.

Actually many people predicted it, including the UBP who repeatedly warned of the increasing problems and were brushed off with Plantation rhetoric.

So much for austerity – this is nearly a 10% growth in expenditure! Same old – and you can bet they will blow through that given the past record.

They will allow exempt companies to buy into tourism fractional units for employee housing. Hmm.

They will allow people in hardship to raid their pensions.  Seems horribly ill-advised … creating bigger problems in the future (oh, I forgot, that’s the PLP way!)

In 2010–2011, Government proposes to increase payroll tax, foreign currency purchase tax, stamp duty on estates, vehicle licenses and implement the biennial review of government fees.

No information is provided on the hikes in estate stamp duty or forex tax.  That’s worrisome.  Payroll tax goes up 2 percent to 16 percent … and the cap is raised all the way to $750,000.  Employers will hate that – bye bye job growth.

Just think:  the $100 million in extra taxes that will come out of our pockets is dwarfed by the over expenditures on recent PLP boondoggles.  Puts the impact of their poor management into perspective doesn’t it?  Our pain, their gain.

Bupkiss for retailers.  The line that “we can’t have Reid Street prosper while North Street suffers” is BS … both are in dire straits thanks to the PLP chicanery.

They seem to believe that Government expenditure is the key to reviving the economy, particularly through capital projects (which are not described in any detail here).  That’s risky given their terrible track record in this area.  My belief is that they should have loosened the burden on business to help drive the economy into recovery, rather than increase the costs even more.

And you knew it was coming:  the Government Loans Act will be amended to provide an additional buffer of $250 million to the statutory debt ceiling, taking the ceiling to $1.25 billion. Pure platinum.  No information on what the current debt levels are, except that they will borrow another 145 million this year and debt payments are now in excess of 38 million a year (more than the budgets of many Ministries).  At least, they have started making contributions to the Sinking Fund again.

Personally at a first read, I find the Budget neither bold nor reassuring, nor particularly informative.  There is little sign that they intend to change the status quo, ie spending beyond our means and driving up the costs of living in little ole Bermuda.