Vexed Bermoothes

Blustery Opinions From Bermuda

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Recovery

February 26th, 2013 · No Comments · Economy

The OBA budget statement last week was met with horror and relief.  Horror because Bermuda’s awful financial state is finally being made clear, and relief because we finally have a Government that has both the skills and resolve to deal with the mess.

Admitting that the PLP screwed the pooch is the first step to recovery.

In its Throne Speech, the OBA laid out a concrete list of legislative actions for the year.  Wow, we haven’t seen that in a while!  Rather than the list of half baked fantasies we’ve received in recent years, the Throne Speech contained a lineup of specific laws that Government will address in this legislative session.  So far, so good.

The PLP, on the other hand, is still struggling to find its legs, trying to restoke the fires of resentment and class fear that have always been central to its idealogy.  Fixating on the term limits issue is a strange choice.  International business is the cornerstone of our economy these days.  When you throw out their middle management, they take with them their household budgets, their support teams … and ultimately their business.  The clues are everywhere … from business closures to the hard economic data.  Frankly the policy was all about optics anyway – waivers were being granted with great frequency … but many companies noted the negative tone and simply started to move jobs out.  The OBA has done the right thing by removing this ill-advised and broken policy as a barrier.

Government’s National Economic Report 2013, also released last week, has received insufficient attention and analysis in the media.  It is full of informative data can help people grasp that we are not just dealing with a recession, we are dealing with an economy that is out of alignment.  Our government costs more than $300 million a year to run than we collect in taxes.  That’s startling for a community that is, in effect, a small village.  Out of all the job categories in Bermuda, the only one that added jobs last year was Government!

Want some evidence of the harm of term limits?  Look at the numbers not the emotion.  Non-Bermudian job losses last year were 45% … Bermudians were 55% with a heavy concentration amongst clerical and other support workers.

Want to see the evolving horror of the Bermuda mortgage sector (ie what’s happening to all us Bermudian homeowners)?  Non performing loans are currently running at 10.2%.  That’s up from 8.3% in the first quarter of 2012, and up from 5.4% in the same period in 2011.  That’s a startling acceleration.  Each of those troubled mortgages represents a personal tragedy for a Bermuda family, and highlights this as an area that requires Government attention.

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