I do not believe that this Minister for Finance can exercise the quality of financial control that Bermuda and good financial management requires. Here is why I believe that.

In Part One, I wrote that there had been “a consistent seven year track record of gross overspending (reaching its zenith in 2009/10 when the gap between revenue and spending was $365m)”. The chart below left shows the public record on revenue and spending. The annual Financial Statements of the Consolidated Fund give the actual revenue and actual spending for the period 1998 to March 31, 2010. This February Budget Statement gives the figures for April 2010 to this day in February 2011.

From this chart below, you can see a clear pattern of fiscal behaviour. The pattern shows a consistent lack of financial control and management. This pattern begins showing in 2004.

Chart

Every year, planned Government spending is set out in an Appropriation Act for that year. For financial year (FY) 2010/11, the amount was in the Appropriation Act 2010. For FY 2011/12, spending will be set out in Appropriation Act 2011. Appropriation Act 2011 will be passed on or before Friday April 1, 2011.

Comparing actual Spending (from Annual Financial Statements) with the relevant Appropriation Acts for each year, shows this pattern of behaviour — see the chart below right.

(The Financial Statements showing the actual spending related to Appropriation Act 2010 will not be ready until September 2011 — at the earliest.)

Between April 1998 and March 2004, the Bermuda Government had aggregate revenue of $3,769,000,000 and spent an aggregate $3,784,000,000. 

Put another way, average monthly revenue was $52.34m while average monthly spending was $52.55m — about $0.2m overspent each month. At the end of those six years, the Government was within $15 million or 0.4 per cent of government spending matching government revenue. That is almost perfectly ‘balanced spending’ or ‘balanced budgeting’. Debt, at $119 million, was at its lowest on 31 March 2004.

Between April 2004 and March 2010, the Bermuda Government had aggregate revenue of $5,277,000,000 and spent an aggregate $6,345,000,000. 

Put another way, average monthly revenue was $73.3m while average monthly spending was $88.1m — about $14.8m overspent each month.

At the end of these six years, the Government was an aggregate $1,068 million or about 20 per cent overspent. Definitely, that is ‘un-balanced spending’. Debt, currently reported at $1,157 million, is at its highest.

All three different examinations show the same pattern of saying and promising one thing while actually delivering quite another.

I do not believe that this Minister for Finance can exercise the quality of financial control that Bermuda and good financial management requires.

I have given you the DNA, fingerprint, video, eye-witness, and ‘smoking gun’ evidence.