Richards: 'New Bermudian hires show tax breaks are bearing fruit' (UPDATE)

The Hon. E.T. (Bob) Richards, Minister of Finance today provided an update on the number of new Bermudian Hires (NBH) following the passing of the Payroll Tax Amendment Act, 2013.

Minister Richards said: “Based on preliminary data, I am pleased to report that, between April 1st, 2013 and September 30th, a total of 420 new Bermudian hires have been reported in relation to the two year payroll tax holiday for the new Bermudian hiring initiative that the Government introduced effective April 1^st 2013. Clearly the stimulative measures taken by this Government to encourage and promote the employment of Bermudians is bearing fruit.”

Minister Richards explained that the two year payroll tax holiday for new Bermudian hiring was one of the tax initiatives introduced in the 2013/2014 National Budget to stimulate economic activity and employment.  It is pleasing to note that this proposal has clearly met its primary policy objective to promote job creation in our economy, specifically Bermudian jobs. The bill also stipulated that a person had to be unemployed for 3 months before they qualified for the exemption – thereby encouraging employers to hire Bermudians who were most in need of employment. 

Minister Richards added: “I am confident that during the next year and a half many more Bermudians will find employment as we work with the private sector to promote jobs and opportunity and get our economy back on track.” 

STATEMENT BY SHADOW FINANCE MINISTER DAVID BURT

The figures released today by the Minister of Finance must be put into perspective.  The Payroll Tax Exemption provides a tax break for any Bermudian who is hired, who may have been previously unemployed for 3 months or more. For the Bermudians who this applies to, congratulations! It is a tough job market, so you are to be commended for doing what it takes to secure employment.

However, this does not mean 420 new jobs were created. Many of these hires are to fill vacancies caused by retirement or regular turnover in the job market (terminations/resignations). Also, many of the jobs were seasonal/temporary jobs, in tourism related industries as we saw from the figures released in August. Additionally, it must be pointed out that tourism related industries (Hotels, Retail, Restaurants, Bars) have all enjoyed payroll tax breaks prior to this measure being introduced. Hiring in these areas provide no additional tax benefit to the employer and according to the august figures, these industries make up 45% of the new claims.

We hope that the Minister releases a complete breakdown of the figures so we can see the specific industries that have benefited. I also call on the minister to tell the public specifically how many new jobs have been created by this policy.

What is most important to Bermudians who are without work, are plans to stimulate the local economy to create new jobs for Bermudians. The OBA have failed to produce any plan to create new Bermudian jobs while our local economy continues to suffer under the weight of job losses, outsourcing, and shrinking pay cheques. Statistics mean nothing to the people out of work and who are losing their jobs due to the OBA's inaction on a jobs plan for Bermudians.