The Government is to boost its capital spending to about $85 million, using revenue such as new cruise ship taxes, to revamp the island’s infrastructure in the 2020-21 fiscal year.
Curtis Dickinson, the Minister of Finance, made the revelation after opening a meeting this evening on the Government’s pre-Budget report.
He said the numbers of civil service workers had declined over the last five years and said it would be “irresponsible” to make further cuts.
Present in the audience were various MPs, including David Burt, the Premier, and Deputy Premier Walter Roban, as well as senators.
Mr Dickinson said his hope was for “a truly consultative process”, saying that “inevitably, no one is going to like everything” and that decisions would have to be made.
“There’s been a lot of concern expressed over the levels of debt over the last four to five years,” Mr Dickinson said.
He said fairness in the island’s tax system would factor into budgetary decision making — as well as “fiscal discipline and prudence”.
The economy is “slowing down” despite some positive developments, including moderate inflation and jobs growth over the last two years.
Mr Dickinson also refuted charges that the Progressive Labour Party was a “tax and spend Government”.
He said the present fiscal year would close with about $2.644 billion in the national debt.
The minister noted the Government had to borrow $182.4 million to pay off its obligations on the stalled development at Morgan’s Point.
Mr Dickinson said the obligations over the project also included having to buy the claims of local contractors who had not been paid for their work on the development.
Government expenditure will be kept “relatively flat” and tax collection is to be boosted.
A tax break is under consideration for workers earning up to $48,000 a year.
A dividend tax, which Mr Dickinson conceded was “not perfect”, could be raised, while temporary payroll tax breaks for job creators are likely to continue, as well as relief for small businesses.
There will be no increase in land taxes in the 2020-21 Budget.
At 6.30pm, Mr Dickinson opened the question and answer session for the audience on the Progressive Labour Party’s fourth pre-Budget report.
Responding to questions over unpaid taxes, Mr Dickinson said there was probably “$150-plus million” in arrears and that the Government was working to hone its enforcement.
A woman suggested “maybe what can be looked at is increasing productivity in Government jobs”,
Mr Dickinson said increased efficiency had been brought to the Department of Immigration using technology, which could be “used as an example” to the rest of Government.
One man asked to hear the best-case and worst-case scenarios regarding the Caroline Bay development.
Mr Dickinson said it was a “rather fluid” situation, adding: “What I can say is fairly limited.”
He said developers “should have scaled back the size of the project” when it became clear it was not fully financed.
“We are considering a wife range of options — we are talking with the developer, who is sharpening his pencil, trying to figure out how to make this work.”
He said he wanted to “get his money back” and protect the interests of the people of Bermuda.
Asked about the perception that businesses in Bermuda were “drowning in taxes”, Mr Dickinson said: “I do not think we are over taxed. I think we can probably do more to streamline.”
He said his preference for boosting government revenues was “to grow the economy”.
The meeting is being held in the Goodwin C. Smith Hall at the Heritage Worship Centre, Dundonald Street.
A spokeswoman for the Ministry of Finance said of the pre-Budget report: “It is a consultation document which allows the public to understand spending and revenue proposals for the new fiscal year and provides an opportunity for public input before the 2020-21 Budget is finalised.”
The pre-Budget report can be found on the government portal at gov.bm/prebudgetreport.
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