Created: Jul 02, 2022 07:49
David Burt, Premier and Minister of Finance, provided an update on the government’s finances. (Photograph by Akil Simmons)
Bermuda is in “a better financial position” than expected earlier in the year, Premier David Burt said. told the House this morning.
Mr Burt, who is also finance minister, said when the budget was presented in February, revenue for the coming year was expected to be $1.03 billion.
He said: “As additional information now becomes available, estimates have been adjusted to reflect a further $32 million increase in revenue and a corresponding $8 million increase in expenses.
“For the current fiscal year, notwithstanding the expected loss of revenue from the Aircraft Registry due to the fallout from the Russian-Ukrainian war, the government’s updated revenue estimates – tied primarily to occupancy levels of the better than expected cruises and hotels – expect the government to still be able to meet our deficit target.
“This updated forecast is encouraging, given the severe impact of the war on global economies.”
According to Burt, a shortfall of $245.5 million was estimated for the 2020-21 fiscal year, but the final figure was $184.2 million, an improvement of $61.3 million.
He said: “Therefore, compared to the initial estimates for 2021-22 as presented in the 21-22 budget, the updated forecast for 2021-2022 projects an overall improvement of $ 30 million in the deficit to $ 95 million. billion, with estimated revenue of $63 million. higher than original forecast and overall expenses of $32 million – including $21 million of unforeseen Covid-related expenses.
Mr Burt said there had been “significant” increases in revenue from stamp duty, business services tax and vehicle registration fees, and immigration revenue, while spending had remained “largely in line with revised February estimates”.
He added: “The policy of prudent fiscal management that this government has committed to following since its election in 2017 continues to be a positive factor for this economy.
“We are committed to reducing the budget deficit and moving towards a balanced budget.
“Our 2019 projections saw us with a deficit of only $7.4 million; however, the failure of the Morgan’s Point project inherited from the former administration and the unexpected outbreak of the global Covid-19 pandemic forced us to take significant action.
“These measures have not only protected the health and well-being of our residents, but have also provided relief and financial support to Bermudians, as evidenced by unemployment benefit payments of up to $500 per week to more than 10,000 residents severely affected by the fallout from this pandemic.
The Prime Minister trumpeted the continued success of international trade saying that during the pandemic it had offset the decline of the tourism industry.
He said: “As part of our economic strategy, to grow our economy in a careful and thoughtful way, we have already started to expand into other sectors to diversify our revenue base.
“Bermuda, recognizing the opportunities that could exist in the digital asset space, we built an infrastructure that would attract digital asset companies that wanted to be based in a jurisdiction that had a strong regulatory regime and encouraged innovation. .
“This sector has already experienced significant growth. Bermuda now has 15 licensed digital asset companies, with more companies in the pipeline.
“Furthermore, there are currently seven innovative licensed insurers in Bermuda leading the charge as we witness the beginning of the convergence between traditional insurance and digital finance.”
Mr Burt said jobs in international trade had increased by 10% over the past two years, from 4,020 to 4,441, with the majority of positions filled by Bermudians.
The Prime Minister also assured that other financial relief measures were in preparation.
He said: “This government will be true to that promise we made in February by presenting a package at the next sitting of the House that will deliver on our promise of more relief to come.”
But he added: “There are limits to the support the government can provide, as it is vital to Bermuda’s economic future that the government meets its fiscal targets.
“With global inflation set to continue for the foreseeable future and a growing number of economists predicting a recession in the world’s largest economy – and our largest trading partner, the United States, all residents must exercise wisdom in their spending choices.
“These are uncertain economic times, especially as we have to rebuild our economy after the coronavirus pandemic.
“This government will remain fiscally prudent while providing the relief that many Bermudians need.
“It is up to all of us in this honorable House and on this island we call home to work together to make Bermuda’s economy work for everyone.
“The continued implementation of Bermuda’s economic stimulus package has been good for Bermuda, and this government will work to ensure we do everything we can to minimize the impact of world events on our economy while bringing relief to workers to ensure this economy works for all Bermudians.