---

Larry Burchall in a recent series of excellent articles on education has clearly demonstrated that we are cheating our children by failing to educate them properly.

He stopped short of saying that parents who send their children to government schools should be charged with neglect. But only just.

The other way we are cheating our children is the massive debt that the Bermuda Government is accumulating.

I made reference to that debt on the David Lopes radio show on ZBM radio last week, and mentioned that by my calculations total government debt is in the order of $3,000 million.

The Minister of Finance has stated that my figures are wrong and exaggerated.

My figures were not pulled out of a hat but are based on the Government budget and the most recent actuarial reports on the main government pension funds. Let me explain further.

The latest government debt in the last Budget Statement (page 34) amounts to $539 million. In the financial year 1989/90 the debt outstanding was zero - this can be checked on the Budget Statement of 2000/2001, page 69.

With regard to pension deficits - meaning that what has been promised in benefits is significantly more than the amounts that have been set aside in a pension fund - the deficits can be summarised as follows.

On the Bermuda Contributory Pension Fund (or the Social Security Fund), the U.K Government Actuary's Department Report of June 2007 states on page 43 that "As at 31 July 2005, the Projected Benefit Obligation (what has been promised to members of the public) is $2,770 million.

This compares to the Fund market value of $996 million and so the unfunded liability in respect of accrued benefits is estimated to be $1,774 million".

On the Government of Bermuda Public Service Superannuation Fund as at March 31, 2004 it is stated on page 8 that "As at March 31, 2004 there is an unfunded liability of $533,981,600".

On page 4 of The Ministers and Members of the Legislature Pension Fund Actuarial Valuation as at March 31, 2004 there is a deficit of $4,998,600.

In summary the deficits are:

• Budget Deficit: $539 million;

• Social Security Fund: $1,774 million;

• Public Service Fund: $534 million;

• MPs Pension Fund: $5 million;

• Grand total: $2,852 million.

There is more bad news. The investments since 2004 have fallen in value.

On the Social Security Fund there was $722 million in equity investments and in the Civil Service Fund there was $302 million in equities. Total, just over $1 billion.

If one takes into consideration the fall in the value of equity investments since 2004, and adds a very conservative $150 million loss, it will be seen that the government debt is over $3,000 million or about $50,000 per head of the Bermuda population.

Who will pay that huge amount back? I know it will not be those over 65, or civil servants, or MPs or Ministers.

That task will fall to people mainly under 30, and most probably those under 15 going to school, happy in the knowledge that their parents and the Bermuda Government are looking after them.

We are cheating our children out of a decent education, and we are cheating them out of a financial future. Not something to be proud of.

---