National debt tops $1 billion

MONDAY, DECEMBER 12: The Bermuda Government overspent on its current account by $64 million in 2010-11, Premier Paula Cox said today.

The figure was 5.7 per cent over the original estimate of $1.12 billion, with $18 million extra being spent on servicing the island’s debt.

The net public debt also increased by $242.8 million over the financial year, leaving the national debt at the end of the year at $1 billion.

But Ms Cox said the extra cash was spent on health subsidies for the young, aged and the poorest sections of society.

An extra $9 million went on the increased cost of Financial Assistance and Day Care Allowance for children, while an extra $6 million went to the police.

In addition, an extra $5 million apiece was spent on the war veteran’s programme and salaries for substitute teachers and para-professionals in schools.

The three largest costs to Government were employee costs at $597.3 million (47.4 per cent of total costs). This included $150.7 million in non-cash retirement benefit expenses, grants and contributions ($2.67 million or 21.2 per cent) and professional services at $119.1 million.

Ms Cox added that professional services were not only fees for consultants, but included government contracts for cleaning, security and legal aid, as well as war pensioner medical claims and contracts like airport operations.

But capital expenditure – the money spent on bricks and mortar – dropped by $120.5 million, around $23 million lower than the original budget estimates.

Ms Cox added that the total revenue raised by the Consolidated Fund in 2010-11 was around $991 million, an increase of $74 million over the previous year.

She said: “The primary reason for this increase in revenue were the increases in payroll tax, foreign currency purchase tax, stamp duty on estates, vehicle licensing fees and the biennial review of government fees.”