The House should have final say on Government borrowing

On Friday, Finance Minister Bob Richards will deliver the OBA’S first Budget.

Whatever he says, whatever numbers he puts together, there is one paramount over-riding action that he must take. Without doing this one thing, he will effectively start by failing.

Bob must make a promise. Bob must then state and implement a new policy and ensure that in the lifetime of this Parliament, that policy gets enshrined in the laws of this land.

The Promise: “I will not borrow funds on behalf of the people of Bermuda without first publicly informing and, after debate, receiving the permission of a majority of Parliamentarians.”

The Policy: Before borrowing funds whose repayment is planned for any period beyond twelve months from the date the funds are taken up, the Minister will table a request to borrow; the House of Assembly will debate that request; the House will give the Minister specific permission to borrow; and the House will agree a top limit on the funds that can be borrowed in the transaction debated.

This may seem a draconian step. But it is not. It is the most sensible step of all. It comes out of the mistakes of the past decade. It is taken in the shadow of the mountain of debt now confronting Bermuda. It is taken while 50,000 Bermudians struggle in an economy badly stress-fractured by decisions and non-decisions made during the Seventh Minister for Finance’s regime.

Yes, it attaches a heavy cross to the back of a Finance Minister. But that cross places that Minister under the real control of the elected members of the House of Assembly. Through the House, the Minister comes under the control of the people of Bermuda.

Obligations

And it is the ordinary people of Bermuda who are the ultimate payers-back of those financial obligations, and the people who suffer the most when the national economy declines.

Is this step really necessary?  Look at the past.

• July 13, 2010 – Seventh Minister for Finance borrows $500,000,000. Parliament is informed only after the fact and there is no prior debate.

• May 18, 2011 – Seventh Minister for Finance borrows $200,000,000. Parliament is informed. There is no prior debate.

• June 26, 2012 – Seventh Minister for Finance borrows $475,000,000. Parliament is informed only after the fact and there is no prior debate.

In just two years, without even a “Hey, you guys”, the Seventh Minister borrowed a grand total of $1,175 million ($1.175bn). In just two years!

The Seventh Minister is now kicked out and free to frolic. But the Seventh Minister left me, you, our children, and grandchildren to pay off the $1.175bn that she borrowed without even telling us why she was doing it. Or even what she was planning to do with that $1.175bn.

This style of financial management has caused serious damage to Bermuda’s fragile economy.

Now, as withheld and late delivered financial statements finally slide into public view, it is becoming clear and clearer, that there was a consistent pattern of questionable financial management; a pattern which I am quite happy to publicly identify and explain.  

That process of acquiring funding was and is wrong! Wrong! Wrong! Minister Bob needs to fix this, and fix it pronto — and to do so with transparency.

On Friday, I will listen for Revenue and Expenditure figures. But above all else, I will listen for The Promise.

So should you.