FRIDAY, FEB 26: "Thank God for Paula Cox!" Derrick Burgess's opening remarks summed up the upbeat tone among PLP parliamentarians after the 2010 Budget was presented in the House of Assembly today.
At a post-Budget press conference, the Finance Minister was hailed by her Cabinet colleagues as the brave captain of a ship sailing her crew through difficult economic waters.
Gushing praise was heaped on Ms Cox for the way she had balanced the needs of the community with the challenging economic climate.
Words such as "masterful" and "pride" were generously dished out amid talk of a better and more prosperous 2010.
But after all the backslapping and positive talk of recovery, Ms Cox was quick to acknowledge that some of the proposals in the new Budget would not please everyone.
She said she expected "concern and criticism" in response to a hike in payroll tax, which foes up from 14 per cent to 16 per cent.
The Finance Minister added: "I thought most of the concern or criticism probably would be on payroll tax.
"But when it is looked at in its full context we have and have to have a sustainable public finance system.
"In that context it is equitable and fair and has been tempered with other changes, too."
Under the new budget payroll tax will increase from 14 per cent to 16 per cent and the portion paid by employees will increase by one per cent.
The payroll tax salary cap will be raisaed from $350,000 to $750,000 from April 1, and will be subject to regular review.
Ms Cox added: "Essentially the sharing of the burden between employer and employee means that the effective rate of increase in the payroll tax is one per cent.
"The tiered structure of the payroll tax has been maintained such that businesses with comparatively lower payrolls will pay a lower rate of payroll tax.
"Also, the payroll tax exemptions for trainees, interns and apprentices remain in force.
"Those who have been higher-earners, say earning $500,000 to $1m per year, have probably been more shielded from the adverse effects of the economic downturn and their payroll tax was capped at $350,000.
"It is fair and right that a greater and more proportionate contribution should be made."
The increase in payroll tax is expected to earn the government an extra $427m in the next financial year.
The 2010 budget will see motor vehicle licences go up by five per cent while land tax from properties above $110,000 ARV will go up from 18.23 per cent to 19.2 per cent.
But there will be no increase in bus or ferry fares.
And the Bermuda Police Service will be allocated just over $65m to help tackle gang-related crimes.
There are also plans for 24-hour monitoring of CCTV system and a national task force to tackle crime.
Ms. Cox said there would be no "quick fix" to the economic downturn and she warned that now was not the time to "cry and put you head in the soup".
Premier Dr. Ewart Brown joined in the praise of his Finance Minister and vowed the government would lead Bermuda through tough economic times with "robust" polices.
He said there were already signs of recovery in tourism.
Dr. Brown added: "I can share that 2010 is showing significant signs of rebounding.
"In fact the hotels are reporting increases in group bookings.
"Additionally, one of our airline partners providing daily service to Bermuda has reported this week that bookings from February 2010 through January 2011 are up 30 per cent."
Posted: Friday, February 26, 2010
Comment by:
Letariatpro
The budget is a joke. Paula Cox still has yet to get her head out of the sand. There is an unbelievable amount of wasteful spending in government. Cut that out first, then talk to us about taxing us more to bail her out of her mistakes and negligence.
Posted: Friday, February 26, 2010
Comment by:
thascrazytalk
Well Minister Cox, it is a pity you didn't consider the option of actually curtailing government spending. That way you could have avoided adding to the tax burden on ordinary working families, like mine. Can you believe the Premier chiming in with a comment that tourism is 'rebounding'? Does anyone actually believe this rubbish? They are mortgaging our future for decades to come.
