How much of SAGE will be in the Budget?

Today’s Budget will be the first one the One Bermuda Alliance has had a chance to fully prepare.

When they won the General Election in 2012, most of the pre-Budget had already been done.

This one they will have to own as their own.

It is expected that a raft of SAGE recommendations will be taken into account. Some of them have already been announced, like the amalgamation of the Rent Commissioners Office into the Department of Consumer Affairs. That will save Government $320,000 on paying for two salaries and the rent from having two offices.

There should be more of those types of measures in the 2014-15 Budget.

But the bigger issue will be the Mutualization of Government Departments. Finance Minister Bob Richards tipped his hand at the Chamber Of Commerce SAGE breakfast a few weeks back.

Mutualization as opposed to privatization will give workers in the various divisions that are being spun out of Government, a chance to be part owners in the new company.

The only questions will be how many departments will be mutualized and will they be protected through an incubator period?

Some taxes are expected to go up as well as cuts will not be enough to reduce the deficit between spending and revenue.

Last year the Budget deficit was estimated to be $332M.

In the intervening time, Bermuda’s debt ceiling was raised from $1.45B to $2.5B.

Shadow Finance Minister David Burt said the PLP are hoping it will live up to being a shared sacrifice across all of Bermuda’s demographics.

He said: “The PLP are waiting to hear a comprehensive plan that will lead to growth and diversification in our local economy. 

We also hope that he will bring forward sensible and balanced proposals for growth that we can support as we work together to expand opportunity for Bermudians.

“We are also hopeful that he will tell the country if his tax breaks, targeted to non-Bermudians, that were introduced last year to stimulate the construction industry, were effective. 

“We continue to experience weakness in the construction sector, and given the delays and controversy surrounding the Former Club Med site, this is a part of the economy that requires urgent attention.

“We are equally hopeful that the Minister will not give in to the demands of the Chamber of Commerce who seem determined to continue to push for tax breaks for their members and non-Bermudians,  while everyday workers are left to bear the brunt of the negative impacts of the budget.”

He added that Deficit reduction must be done in a balanced and achievable fashion that shares sacrifice across all sectors of the economy. 

“We await specifics on how deficit reduction will be accomplished, not with across the board cuts, but with specific actions such as consolidation of services and winding up of programmes.

“We are also anxious to hear about the OBA’s plans to control the health care cost crisis in Bermuda. 

“The OBA has ignored the issue of health care and abandoned the National Health Plan — while health insurance costs are rising, straining our budgets, putting stress on employers, and impacting the take-home pay of all employees. Action on this issue is well overdue and we expect for the government to address this issue.

“It should be noted that the Minster promised public consultation on the SAGE report and did not hold a single town hall meeting open to the public. 

“This lack of consultation is a slap in the face to all Bermudians who will be affected by this budget. 

“We hope that the Minister will finally tell the country what recommendations in the SAGE report his government supports and which ones they reject. 

“We expect that the Minister will keep the promises that the government has made to their workers and retirees. We understand that some may want the OBA to break even more promises, but with labour relations at a delicate state, any unnecessary provocation of workers would be counterproductive.

“Finally, on the matter of privatization, the PLP is already on record of standing side-by-side with the workers of this country to ensure that we stand up for the rights of workers. 

“We will support any and all initiatives to make the delivery of government services more efficient; but we will not support any action that compromises the rights of workers to organize and rolls back the hard fought gains of the labour movement.”

The PLP are scheduled to give their Budget reply on February 28, 2014.