If the Governor’s right, the Finance Ministry must be wrong

On Friday, reading the Speech from the Throne, the Governor of Bermuda appeared to tell the whole country an untruth. Untruth, that is, if you believe the residential population [ResPop] figures put out by the Ministry of Finance.

In Friday’s Speech from the Throne, this is what the Governor read out: “The damaging impact brought about by the departure of thousands of international workers and their families is a warning Bermuda must heed. Their departures represent the outer layers of a sector of the economy that generates more than half of the Island’s total economic activity.”

 However, all of us should know that Bermuda’s Governors don’t actually write those Speeches from the Throne. The Speech itself is actually written by Civil Servants and Ministers. The Governor is then constitutionally required to read whatever script is thrust into his hands.

According to the Ministry of Finance, there has been no “departure of thousands of international workers and their families”.  So did others force the Governor into telling an untruth?

 To the whole world, the Ministry of Finance reported on ResPop in the July 2013 prospectus for the $750 million Bond issue; and again in the July 2010 prospectus for the $500 million Bond issue. These are the ResPop figures reported by the Ministry of Finance*:

• 2005 – 63,571

• 2006 – 63,797

• 2007 – 64,009

• 2008 – 64,209

• 2009 – 64,395

• 2010 – 64,566

• 2011 – 64,722

• 2012 – 64,867

• 2013 – 65,002

According to this Ministry of Finance data, Bermuda’s ResPop grew, and grew, and grew. Not even a hint of a suggestion of a “departure of thousands of international workers and their families”. These Ministry of Finance figures say no departures at all. Instead, just steady year-on-year increases in ResPop.

 From where, then, did this idea of a “departure of thousands” come? Could it be that after several Scotches the Governor’s loosened imagination decided to do a sneakily unconstitutional rewrite of the Throne Speech? 

 Or did the Governor read a correct statement? Is the Ministry of Finance correct? Both cannot be correct. One must be right. The other must, therefore, be wrong.

The crunch issue

National Debt currently sits at $2,324 million [$2.324 billion]. When the final $50 million is taken up, Debt will rise to $2,374 million [$2.374 billion]. Given an average rate of interest of 5.2%, the annual interest cost alone will be around $124m.

 The team of senior Civil Servants and technical advisers who were in place between 2003 and Election Day December 2012 are not substantially different. One will retire at month’s end. One was promoted from Assistant to the top post in Finance. The overseas technical adviser died in October 2012. The Bermudian Economic adviser left that post. Most of the remaining technical people are still in place.

These senior technicians and advisers were advising while National Debt mushroomed from the $119 million of 2003 to the $1,574 of June 2013; with Debt being added at an average $12 million a month for 120 consecutive months – ten years. The people who oversaw that massive 1,300% debt explosion are the same people who are now reporting that there has been no loss of ResPop. These people are still advising the Eighth Minister for Finance.

You can see the Ministry of Finance’s ten-year track record. You can see what I believe to be the Ministry’s most recent — and huge — error in Friday’s Speech from the Throne.

I have no confidence in the Ministry of Finance’s ability to provide good advice to the Eighth Minister for Finance. Given all the public facts that I have consistently and publicly set out, I believe that the Eighth Minister for Finance is consistently receiving bad advice, and Friday gave another clear example of that bad advice. The Minister needs to make a clear public statement about what he sees, why he sees it, and from whence cometh his advice.

Was that Throne Speech statement correct? Is the Ministry of Finance wrong?

If the Ministry of Finance is wrong — as I have consistently shown — what will the Minister for Finance do about it?

Will the Eighth Minister just muddle along, trying to manage Bermuda’s deeply troubled national affairs while knowingly receiving bad advice? If he does, then the Eighth Minister will help make Bermuda’s  problem worse. 

*Ministry of Finance ResPop figures are copied from pages 53 – 55 of the Cabinet paper ‘Bermuda Population Projections 2000 – 2030’. This academic research paper was produced seven years ago, in October 2006 and, now in 2013, is being misused.