It was packed with emotion – too much sometimes as Finance Minister Bob Richards was either stopped from talking or had to remind the audience that Bermudians were renowned worldwide for their politeness.
It did not do much good as the chanting of ‘enough, enough, enough’ or ‘save our jobs’, plus the occasional placard waving march around Pier 6 still went on. The placards looked extremely well made, by the way, and all very similar ….. mmmm
Whatever. (I love and loathe that word)……
I watched the Bernews video of SAGE Town Hall meeting as I could not attend the meeting due to illness. However, the video was still very instructive.
Bob was good, apart from a couple of awful gaffes – pretending the mix up over the $35 million social insurance story was manufactured by the RG and how he tried to engender sympathy saying as a Minister he had taken a ten percent pay cut.
I was quite impressed with his performance although his constant playing with a XXX gave the game away a bit, he was clearly nervous, and he cannot be blamed. I would not like to have faced an audience like that, it takes guts.
However what he said was too often lost on the emotion and it clearly shows that the Government still has an awful lot to do in order to educate the population as to the severity of the Island’s position.
The debt stands at just over $161 million. That is by far the largest Ministry, it is the Ministry of Debt. And as Bob pointed out, before a cent is spent on anything else, the debt has to be serviced first.
We default and we go broke. The Island goes bankrupt and the repercussions of that are too awful to even contemplate.
And we are still racking up debt. We are, as Bob pointed out borrowing money to pay the debt. We are still spending more than we earn to the tune of $267 million.
If Bermuda was an Island blessed with resources that made our dependence on basically one stream of income unnecessary that would be OK, but we are not. We are a service industry island. It means we cannot afford to get into such debt. We do not have the economic base to deal with it.
Contrary to popular opinion, I am not an OBA supporter, nor am I a PLP supporter, but it has to be said that the OBA has inherited this position. It has been left with the tough calls that the PLP did not take…
You can see from the above graphic how spending started to outstrip revenue and for how long. There was only one solution and that was to borrow. A PLP Finance Minister’s (now forever known as The Cog) directive to reduce expenditure by 10 per cent per department fell on largely deaf ears.
Other than Col. Burch, the largesse continued. (Yes you will berate me, PLP supporters by saying you got a new dock at Dockyard, a new TCD, new ferries etc – but the dock was over budget, TCD was over budget, and we cannot afford to maintain the ferries. Then there’s the $500 million unaccounted for …. another story there altogether.)
It was becoming clear that a recession was looming, but we carried on spending, the debt started to spiral and for the first time, the Bermuda Government issued bonds as a means of raising money.
Now reality bites. The wallets are looking thin, the traditional Bermudian politeness has taken a back seat. People are feeling the pinch.
But I for one cannot see another option other than to scale back on spending, to take the really tough decisions that greatly impact people’s lives. Government cannot engage in quantitative easing – where will it get the money from?
As I said before, Bermuda does not have the broad economic base to sustain the debt. We default and you can be sure that IB will flee this Island quicker than you can blink. It will be Banana Republic time ….
And the situation cannot be turned around in the 18 months the OBA has been in power – that has to be appreciated. The situation that was inherited was dire. Spiralling debt, falling income, falling house prices, people leaving the Island in their thousands…..
I fear that the opposition of the BPSU and BIU to privatization or mutualisation of some Government services in a bid to trim the wage and salary cost that accounts for 43 percent of Government spending will inevitably lead to industrial unrest.
I am fearful, that as tensions and emotions rise, there could even be civil unrest.
It is going to get a lot worse before it gets better, but the alternative is that it just keeps on getting worse ….