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.

Politics.bm has an important post on the Southlands fiasco.  I encourage you to read it, pass it on, post it to Facebook, and most importantly start asking questions about the actions of the Bermuda Government.

In the past 10 years our Government budget has doubled yet still runs at a deficit, our national debt has metastasized like a cancer, and more than half our public sector audits have shown dangerous lack of controls.  We talk of Platinum and Gold Standards, but accept Rust.

We have a hurricane of money, whether misspent, misdirected, or just plain missing.  You have to ask if this is due to incompetence or negligence, or is it due to ethical challenges?

The global recession did not cause the trainwreck facing Bermuda.  It simply removed the fat and pushed all the hijinks to the surface.  We can now feel the money that has been removed from our pockets.  The jobs that have been lost.  The comfort that has been eroded.  The future that has been damaged.

The economy may turn around, but Bermuda is now carrying a burden that will span generations.  It was a great party for an elite.  But you have to pay the bill for it.

While it is convenient to blame a distant and impersonal recession, I think even the most steadfast booster must realise with great disappointment and pain that the blame lies closer to home.

Much of the Bermudian population has allowed the excess to occur because they want the PLP to succeed.  But when will the PLP put the foot down to say that this situation is metastasizing and will destroy our economy?  Is the PLP Government even the PLP of popular memory any more?

Every situation has a tipping point, and sooner or later Bermuda’s population will turn its back on the PLP if it cannot get its house in order.  They’ve had several second chances … but all signs are the orgy is continuing.

You can’t afford it anymore.  It’s time to clean house.

So, all signs are that the Southlands/Morgan’s Point deal is crumbling due to political interference and backroom tinkering.  Is this any surprise?  The pattern is well established.

Government’s tactic now seems to be to belittle Brian Dupperault and the Southlands team.  In my opinion, the question is:  who are you going to trust … the executive who has a reputation for building industries that make Bermuda’s economy prosper, or the politicians who have a reputation for overseeing their decline?

Also, the gloomy analysis from economist Craig Simmons is sobering.  Again, no surprise here.  Many voices in the community have been warning of the dangers of the PLP’s behaviour for years, but have been fended off by the Government’s unfounded platinum optimism.

Surprise:  investors and business people are abandoning Bermuda because their rational analysis says SOMETHING IS WRONG HERE, not because of the insider plots of racism or partisanship claimed by the PLP leadership to cover their management inadequacies.  The world sees we have governance issues;  when will Bermudians see it?