Bermuda Government Facing Budget Crisis

Tax-news.com

10 January 2000

The Bermuda Finance Minister has ordered all government departments to cut their budgets by 5% before next month's budget in order to avert a potential budget crisis due to government overspending. It is has also been reported in the Bermuda press that at least three key government ministries - Health, Education, and Labour, Home Affairs & Public Safety have been named so far - have already told the finance minister that they may not be able to meet the 5% target.

If necessary, Finance Minister Eugene Cox can impose cuts on Ministers who cannot come up with the required savings, and the prospect of this has prompted concerns that key government spending programmes and essential services will be affected as a result.

Shadow Finance Minister Dr. Grant Gibbons was particularly critical of the government, saying that if the ministries fail to meet the required budget cuts then Bermuda could also face increased taxes and a higher national debt. "It's disturbing. It looks like they are already in trouble at the end of the first year," Dr Gibbons said. "We were very concerned clearly at the real increase in expenditure over the previous year - almost four times the rate of inflation. And it wasn't clear what they got for $36 million in additional spending. I was stunned at how little they accomplished in the first year. And it was clear in the Throne Speech that government has a long laundry list of things to do in the coming year. I am just concerned at how much that will cost."

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