FRIDAY, JANUARY 18: Half full or half empty?

This week Finance Minister Bob Richards and Shadow counterpart David Burt interpreted Bermuda’s financial figures very differently.

Mr Richards said the “under the hood” look he promised the Bermuda public if the OBA was elected showed “the state of Government finances is every bit as bad as we had feared”.

The figures show that Government accrued $228, 767 million in debt for the 2011-12 year, and this means Government now owes $1.236 billion.

Mr Burt said it showed good stewardship on part of the PLP as it was reducing the amount of deficit spending over the past two years. Mr Burt said the $229 million figure was less than the $254 million deficit spending for the 2010-11 year.

He added: “The $229 million deficit is smaller than the deficit in the previous year, even though revenues fell by $83 Million, which was partly a result of payroll tax reductions and special concessions to retailers.

“The figures also project that the current fiscal year deficit is expected to be $198 Million.

“This would represent two consecutive years of deficit reduction by the PLP Government.”

Mr Richards said even though there was a reduction, it still amounted to too much debt.

“Net Public Debt, which excludes guarantees and is net of the Sinking Fund, increased by $220.9 million to stand at $1.236 billion. This represents a 23.4 per cent increase from fiscal 2010/11. 

“We cannot continue with debt rising at a rate of 23 per cent per year. We can no longer tolerate the budget busting practices of the past. We cannot continue to use the global economy as an excuse for our own failures to properly manage the public purse.”

Mr Richards said Government was going to have to borrow a yet undisclosed amount of money for the 2013-14 year until the OBA can turn Bermuda’s economy around.

Accordingly, he said Government’s debt ceiling would have to be raised

Mr Richards also floated the idea of public sector pay cuts and a shorter working week, and said unions would need to be involved in the quest for solutions.