Missed opportunity: Gov't is raising taxes on cigarettes and booze – why not on fast food?  *File photo
Missed opportunity: Gov't is raising taxes on cigarettes and booze – why not on fast food? *File photo

My first impressions of the 2013 Budget, presented this morning by the OBA, are that it presents a mix of good ideas, missed opportunities — and some ideas that raise concerns. 

It also contains a hefty dose of political barbs towards the PLP, which rather undermines OBA talk of a new approach to politics (and Minister Richards’ own comments on unity within the Budget).

The initiative to reduce licence fees for non-Bermudians and PRC’s with regards to purchasing Bermudian real estate is interesting, and does have some merit. But I do the reduction for non-Bermudians (from 25% to 8% for 18 months, 12.5% thereafter) is far too much, and this alarms me. I would be comfortable with reducing it to 15% for the 18 month ‘sale’ period, and then increasing it to 20%.

PRC-holders see the license fees reduced to 4% (later to rise to 6%), and I would rather have seen them treated here in the same manner as Bermudians, and so to reduce their fee to 0%. I would rather have people who have lived here for decades and, for all intents and purposes, who have integrated into our society, to have the first opportunity to purchase properties rather than novel foreign owners.

On the vehicle license fees, and ‘sin taxes’, I think there have been some missed opportunities. For sin taxes, I would have liked to have seen their expansion to junk food, with the revenue generated to be ring-fenced and used to subsidise basic food staples such as rice, beans, fresh produce. 

This would help reduce our health costs in the long-term and lead to increased productivity too. There was also the potential to introduce a carbon tax on foodstuffs which can be grown in Bermuda to help boost local food production too.

With vehicle taxes, they should have created a new formula for the licensing fees, factoring in both size and fuel efficiency. If they had increased the fees for larger and more inefficient cars, and used the resulting revenue to subsidise hybrid and electric cars, then this would, over the long-term, reduce the amount of money leaking out of the island to pay for fossil fuel imports (seeing as power plants have a more efficient fuel to energy rate).  Similarly, it is a mistake to increase the public transportation fees. The objective should be to discourage private transport and encourage public transport, the result being less wear and tear to our roads and more efficient use of fuel consumption, all leading to savings for the Government and the island in the long-term.

I have concerns about the payroll tax holiday for new Bermudian hirings, in that it while it may encourage more Bermudian hirings, it does seem rather punitive to the new hire, who continues to pay out; only the employer is given the holiday.  Giving both the new employee and the employer a ‘holiday’ would be fairer, and help boost some local sales, in as much as it provides more disposable income to the workers.

I also would have liked to have seen a two-year holiday for small businesses.  Too often, the payroll tax provides an obstacle for small businesses, who, for the first two-years of incorporation are often running at a loss, and the payroll tax can become a severe obstacle to their long-term success. 

I am surprised at the extension of the debt ceiling to $2.5 billion. The Opposition was quite historically opposed to this when the PLP was in power, so it raises some eyebrows. I understand it, and I think it’s necessary, but I can imagine it raising eyebrows nonetheless.

I question some of the choices for cuts. I would have liked to have seen increases to Planning, Conservation Services, Sustainable Development, Energy, Correction Services Departments, the entire Ministry of Cultural and Community Affairs (with the exception of BHC).  Some of the increases, where they occur, seem unusual, with large increases to HQs – such as the HQ for the Ministry of Home Affairs which sees a 759% increase – this could do with some explanation.

I would also have liked to have seen a commitment to the Government revamping its energy infrastructure.  This would, indeed, require money to be borrowed, but if used to convert (whenever possible) Government lighting to LEDs as well as installing solar panels on all public-owned buildings, the long-term benefits would be save the Government money in the long-term.  And it would also help boost local businesses in this field, leading to additional benefits. 

Overall, the Budget misses the opportunity to develop a green route out of the economic crisis.

I am completely opposed to attempts to renegotiate compensation for Government workers. These rights need to be defended, and cutting them reduces disposable income, leading to a domino effect throughout society.


Jonathan Starling was an Independent candidate in last year’s General Election in Constituency 20, Pembroke South West.