Saturday, February 27, 2010

2010 Bermuda Budget

Now I'm no economist but, still the 2010 Budget raises some interesting questions in my mind.

1) Where are the spending cuts promised?

We were promised 10% cuts in departmental spending. Instead we've seen a 9% rise in total. With the Department of Education being one of the few that takes a cut.

The government blew through the good times with a spend spend spend attitude, putting very little aside for when times turned bad and now that we are in those bad times they seem completely unable to deal with it. The country's debt is going through the roof, passing this government's fiscal problems off to my generation to fix, and the Bermudian people are facing hard economic times to which the response of government is to raise taxes. That being said however we do see an increase in the amount of money being put towards financial assistance for lower income families which is commendable however how much can the government do when the very people they are trying to help are being forced out of their jobs by the taxes paying for the government's thrifty attitude.

On the point of the Department of Education's budget cuts it may not be as shocking as it may seem to be on the surface. While we do face major issues with the public educations system on the island one must take account of the fact that the number of students enrolled in the system has constantly decreased over the years (undoubtedly a symptom of the failures of the system). It will remain to be seen if the spending cuts are in line with the reduction in students and if the budgeted amount is enough to turn the failing system around but, for now I believe they deserve the benefit of the doubt.

2) Why tax employment when we already have a problem of unemployment?

Perhaps someone can explain it to me but, I always thought that the more someone has to pay for something, the less of it they will want. Since the budget includes a 1% rise in the amount of money employers will have to pay for every worker won't that actually discourage employing more workers? Or even force small businesses to lay off workers or close down? Perhaps I'm missing something, or our Government knows something about the economy that the rest of us are missing.

3) Why are they still claiming that no one saw this coming?

Again Ms. Paula "cog" C0x claims that this is something that no one saw coming, stating that it was a once in a 100 years event so they couldn't have been expected to prepare for this. As Shadow Minister of Finance Bob Richards retorted post-budget, apparently his name is No One. 3 years ago he warned that something was coming and was shouted down as a scaremonger... Oops.

As I have already mentioned there is also the question as to why the Government wasn't putting money away when the economy was booming to deal with even unexpected downturns? Save while you can, spend when you must should have been the motto of Ms. Cox's department but, then again, how can the head of the department tasked with managing the government's finances and spending do anything? It's not like it's her job or anything. She's just a cog in the wheel.

4) How much more of this kind of fiscal management can Bermuda take?

Who knows.. On this one there's not a lot of room for..

Wishful Thinking

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