Updated: Jan 16, 2024 08:17 PM
David Burt, the Premier, soon to deliver the 2024-25 Budget (File photograph by Akil Simmons)
The Bermuda Government is weighing the option of moving to a two-year Budget process instead of yearly budgeting, David Burt has revealed, as the delivery of the 2024-25 Budget approaches next month.
The Premier said the possible switch was among options under review to streamline the Government’s balance of revenues and spending.
Affordable housing stands out as the island’s top economic issue, Mr Burt acknowledged last night, calling it “the number one concern I hear on the doorsteps”.
He added that it was “without question a result of the growth the economy has experienced”, but emphasised that “we can’t grow our economy if we do not have places for people to live in”.
Mr Burt said the island remained two full Budget cycles away from seeing gains from the Corporate Income Tax approved at the end of last year and that dealing with the variability of its revenues when the time came would prove “a very challenging exercise”.
He suggested striking a balance between “making sure we reduce the cost of living in this country and the cost of doing business”.
Mr Burt ruled out shrinking the civil service as a shortcut to balancing the island’s books, noting that public staffing had not grown under the Progressive Labour Party’s watch.
The online forum on the Pre-Budget Report heard that the Government is on course to present its first balanced budget in more than 20 years for 2024-25 — a critical first step in grappling with the island’s debt of $3.3 billion.
Mr Burt said the report allowed for open budgeting as well as ensuring there were “no surprises on Budget day, but a Budget that reflects our priorities”.
The document, which went public in December, lays out the Government’s fiscal aims and policies under consideration, as well as giving an up-to-date assessment of the island’s economy.
Taking questions from the public, Mr Burt said the Government was improving when it came to clawing back uncollected taxes.
He hinted the coming Budget could deliver “additional measures to make sure we improve the tax culture”.
He said the 2023-24 commitment to bring in $7.5 million in back taxes had reaped in more than $15.7 million by November 2023 as a result of more efficient collections, instead of resorting to extra staff for the tax commissioner’s office.
Mr Burt said consultation would continue on “tweaking the proposals” on pensions, which was likely to entail a combination of increased contributions and raising the retirement age.
He noted that “the initial proposals we felt were too onerous for the economy” and said that discussions on securing pensions would have to persist.
Asked on financing for road paving, Mr Burt said: “It has already begun — and yes, there will be funding for capital to make sure we continue to improve our infrastructure.”
Mr Burt responded in a similar vein to a query on protecting the Government from further cyberattacks, saying there would be continued investment in IT.
Last night’s economic assessment was heavy on positives, emphasising that 86 per cent of the workforce got breaks in payroll tax this year.
Jaché Adams, a government backbencher hosting the online forum, highlighted that interest payments on debt were on track to drop by $3 million for the coming fiscal year, to $127 million — a “direct reflection” of the $50 million debt pay-off last month.
Reviewing the economic landscape, Mr Adams highlighted that Bermuda’s GDP climbed 2.3 per cent in the first six months of 2023, while the number of jobs rose by 3 per cent and independent credit ratings remained favourable.
Mr Burt closed by reminding the public that this evening marked the deadline for providing input on the Pre-Budget Report, which can be done by e-mailing openbudget@gov.bm.
• To read the Pre-Budget Report in full, see Related Media.
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