Premier's candid chat with students

“We need to legalize weed” was one of the recommendations to Premier Paula Cox in this year’s Business Bermuda’s Student Essay Contest.

Other suggestions ranged from the recreational — waterparks and iPads for every student — to the serious, such as freezing civil servants’ wages and overtime.

Entries to the contest — now in its third year — more than doubled, from 40 to 100.

Students were asked to write an open letter to Ms Cox on the topic: “I want to ensure our future financial security, and this is how I suggest we help Bermuda stimulate the economy.”

Yesterday the eight winning students joined the Premier for breakfast, to discuss their ideas and ask her questions.

“I was impressed by the essays,” the Premier said. “When we talked about them in Cabinet we were pleased to see we share so many of the ideas you have.”

Cheryl Packwood, CEO of Business Bermuda, said: “Students are engaged in the future of this island and we need to listen to them.”

She praised the entry level of the essays, saying: “Even those who said ‘legalize marijuana’ — they put their arguments forward and it is part of the public debate.”

Yesterday at Harley’s Restaurant, Ms Cox spoke on a variety of subjects prompted by the students.

Crime & tourism

Bakari Simons of Berkeley Institute asked the Premier whether she felt the rise in violent crime would impact on tourism.

“Hotels are feeling concerned. But crime here isn’t an inhibitor for tourists coming to Bermuda,” Ms Cox said. “The issue which is more savage for us is the cost of coming to Bermuda and the on-island cost.”

She said Jamaica’s crime rate was worse but that destination is doing “very well”.

“In the global context, crime in Bermuda is just a blip on the horizon. Tourism is much more about having the right economic model. (Tourists think) is it value for money?”

Ms Cox said considerations ranged from airfares, hotel and transport costs, to “clean sheets” and customer service.

Ms Cox said a tourist may think, “Do people act like they want me here, or do they look at me when I walk into a shop and continue their telephone call?

On the shootings of recent years, she said: “It’s horrid and repugnant because it’s something we don’t consider is the Bermudian way.”

But she said a second Police Support Unit and the Reserves would help. “Crime has deteriorated when there is a higher police presence.”

She said Government was also conscious of the need to steer young people away from the ‘gangster’ lifestyle: “Young people are being used to run drugs, or as mules, or as pick-ups. That’s the concern, as to how we rescue the youth who may think this is a glamorous life.”

A ‘triangle’ of Government, police and individuals in the community working together was needed. But she was encouraged by more people speaking out contrary to the ‘no snitching’ mindset of the past.

“Over the last six months what we’ve seen is much more public participation. That’s what has to happen — the collective public conscience.

“People have gotten so fed up with the way things are happening, they are now starting to step outside their comfort zone and act on their conscience, and that’s how you change a country,” she said.

National debt

Some students raised the issue of debt in their essays.

The Premier said: “People like to talk about debt. My standard phrase is, ‘debt is not inherently good or bad. It depends why you spend money”.

As an example, she said if she was to fly to Paris to buy a pair of shoes, she would hope people “would want to run me out of town. But suppose we wanted to build a school because the old infrastructure or equipment wasn’t satisfactory?,” she said.

“You always have to look at the purpose. You always have to look at debt in terms of hard assets.”

Donald Scott, Cabinet Secretary, said: “One of the essays said Bermuda’s debt was ‘astronomical’. I ask you ‘what is the lifetime of a country’? It is our view our country has the ability to pay back the debt we take on.”

He said the public debt-to-GDP ratio in Bermuda was “less than 20 per cent”. In contrast, in the U.S. it is 50 per cent and in Italy, 100 per cent. “Does that mean Italy is going to disappear tomorrow because of that debt burden? It has been around for a long time,” Mr. Scott said. “When you take on debt, international investors will not loan money to countries if they don’t feel they can pay it back. Bermuda has one of the top credit ratings for a country of its size, just below triple-A, which is the best.”

Taxes

Commenting on the two per cent cut in payroll tax — estimated to return $50 million to consumers — the Premier said: “We want to stimulate the economy. We want people out there to have incentives to create jobs.

“I allow $50 million to go out of the door as it may mean you or your father or mother may feel, ‘okay, I can afford to keep these people working for me (in my business)’.”

On income tax, she said: “People look at Bermuda and see it as a tiny little island. They think, how could this small island compete with us in Europe and the U.S.? They think we must be doing something wrong. So you get (U.S.) politicians who just want to get votes, by saying ‘they’re allowing tax evasion’.”

Ms Cox said: “If at any time we were to introduce a tax on income and proposed that we will exempt those companies, to do that in the atmosphere that was occurring two to four or five years ago would have been absolutely stupid. It would have been throwing Bermuda under the bus.

“Since then Bermuda has got a lot of TIEAs (Tax Information Exchange Agreements) so we have some collateral. We have not only shown we are good citizens, we have shown a commitment in terms of our reputation and the type of business we do.”

Expenditure

Stevona Daniels of Berkeley Institute suggested spending cuts in the civil service and cutting “unnecessary overseas travel”.

Ms Cox said: “It’s a very, very good idea.” But she said civil servants had already been tasked with reviewing expenses. “It doesn’t stop. It is a rolling process,” she said. “Travel has been reduced across Government.”

On Stevona’s recommendation that overseas consultants could work from home via the Internet, Ms Cox said there was still a need for them to come to Bermuda.

She said: “We use them because of certain technical expertise. Consultants can often save money because it doesn’t make sense having someone for only three or four months and giving them a contract for a full-time employee, such as with pension benefits.”

The Premier said foreign workers made valuable contributions to the island.

“You must never think that as Bermudians we’re the only ones who can add value to the economy,” she told students. “That would be naïve and foolish.”

She said she would like to see schools to take advantage of international talent on the island, such as encouraging talks from expatriates in global insurance/reinsurance.

“Some of the people who come here are young and unmarried, who may have the odd hour to go into the Bermuda College or a high school,” she said.

“When we have such talent here it’s like burying your talents in the ground unless you use them. I don’t think the education institutions are making the most of these alliances.”

New ventures

Andrew Fleming of CedarBridge Academy asked the Premier: “Do you see any opportunities to bring in a new industry?”

Ms Cox said there were opportunities in green technology plus orbital and satellite technology.

On the satellite industry, she said: “That has the opportunity for a significant investment and the opportunity to generate tremendous revenue.”

Ms Cox said Bermuda also had “a cluster effect” in terms of “a conglomerate of insurance and reinsurance… We will find there will be a number of spin-off international business opportunities that will come of that cluster effect,” she said.

Download the winning essays

The winning essay: A student’s take on Budget priorities

January 26, 2011

Dear Premier Cox,

A budget is merely “mathematical confirmation of ones suspicions”. I ask that you kindly allow me to express my opinion regarding the security of Bermuda’s present financial position in addition to recommending effective ways in helping to stimulate the economy. As a young Bermudian student, I want to ensure our future financial security and the following bullet points [show] how I propose we can help Bermuda stimulate the economy in the hopes that we get back on target or close.

• Scale back on spending by implementing a stricter expense budget by ALL Civil Servants.

• Scale back on the usage of GP cars; that is, MPs to purchase their own fuel for GP vehicles and to only utilize GP cars for Ministerial duties only. A GP vehicle should not be used for Sunday or public holiday outings or as an additional family vehicle. They should not be used for matters not related to official Ministerial business. MPs [should] pay for their own parking tickets and traffic violations. You would see a decline in the aforementioned expenses if it had to come directly from their own personal budget.

• This may sound a bit strange coming from a teenager, but if we scale back on the unnecessary million-dollar concerts that do not benefit our island directly, only for the sake of lining the entertainer’s pockets, we would be in a better position.

• Reinstate public transportation fares for students, but at an affordable rate. Only children five and younger and seniors 65 and older to remain free.

• It is The Ministry of Finance’s utmost duty to ensure that all unnecessary spending be dealt with immediately and not to allow it to get out of hand and to the point of disrepair and to the taxpayers’ unfortunate expense.

• Cut back on unnecessary overseas travel. This can be combated by Government officials utilizing Skype, e-mail, text messaging, fax transmissions, BlackBerry messenger or the good old postal service.

• Take care of our own backyard, our own island home before accepting and taking on the responsibilities of other countries, especially during Bermuda’s current financial situation.

• Offer different payroll tax packages or percentages for different categories depending on the individual company’s profit margin. For example, a small business will be taxed according to their revenue intake, which I’m sure is far less than the International Businesses revenue intake.

• A freeze on Civil Servants’ and MPs’ wages and overtime. For example, do not increase wages for an agreed period of time until we can rise up from the sinkhole that we are currently in. The benefit is that there wouldn’t have to be any redundancies within the Civil Service.

• Cut back on overseas consultant fees. The Government should only utilize the services of overseas consultants when it is absolutely necessary. If a consultant is needed or required, rather then committing to paying for their housing allowance AND consulting fees, only commit to paying for their services if they are required to be on island. Have them pay for their own living expenses so that would appreciate the cost of living in Bermuda and not take our country for a ride and for granted. Many foreigners and/or consultants live far better than our own Bermudians because of this. If they remain and work in their own country while consulting for Bermuda, that is a great advantage because it would be far less of an expense on the Govermnent’s purse.

It is my hope that my suggestions will be taken into consideration.

Stevona F. Daniels
S4 Berkeley Student

Editor’s note: This letter was edited for length.