March 15, 2023

Thank you, Madam
President.
I hereby present for the consideration of Senate the following draft Regulations: the Marine and Port


Bermuda Senate Authority (Pilotage Dues) Regulations 2023 proposed
to be made by the Minister responsible for Marine and
Ports Services under the provisions of section 71 of the
Marine and Ports Services Act 2021; the Marine and
Ports Authority (Port Dues) Regulations 2023 proposed to be made by the Minister responsible for Marine and
Ports Services under the provisions of section 40 of the
Marine and Ports Services Act 2021; and the Marine
and Ports (Seaborne Services) Regulations 2023 proposed to be made by the Minister responsible for Marine and Ports Services under the provisions of section 65 of the Marine and Ports Services Act 2021.
And I give notice that at the next day of meeting
I will move that each of the said draft Regulations be
approved. Thank you.
The President: Thank you, Senator Dill.

PETITIONS
The President: There are none.

STATEMENTS
The President: We have one Statement this morning,
and this is in the name of the Honourable Owen Darrell,
the Minister of Youth, Culture and Sport and Government Leader in the Senate.
Senator Darrell, you have the floor.

Sen. the Hon. Owen Darrell: Good morning, Madam
President.
The President: Good morning.

SUMMER EMPLOYMENT AND
ENTREPRENEURSHIP OPPORTUNITIES
Sen. the Hon. Owen Darrell: Madam President, in the
2021 National Youth Policy, the Government underscored a five- year commitment to develop and empower Bermuda’s youth . The policy highlights the need
to develop and empower Bermuda’s youth. The Minis-try of Youth, Culture and Sport, through the Department
of Youth, Sport and Recreation , will advance these initiatives which aim to increase employment and entrepreneurship opportunities in the following ways.
Madam President, the Government’s annual
Summer Day C amp Programme is now in its 52nd year.
As we have spoken before, it is a very popular programme which employs around 180 individuals and
hosts hundreds of young people across a number of
camp locations from east to west. The department has
started the proc ess of recruitment for enthusiastic, funfilled and hardworking individuals for various positions. The positions available are as follows:
• supervisors;
• assistant supervisors;
• counsellors; • specialist counsellors in the areas of art, dance
and sport; and
• paraeducators.
The department wants to note, Madam President, that the applicants must be 18 years and above to apply , and have valid CPR/First Aid and SCARS Certifications. The department’s Summer Day Camp Programme ensures students studying in the educat ion or
humanities have an opportunity to work in the field of
their studies, so we encourage interested individuals
who wish to be a part of our team to visit our online
platform www.sdcjobs.bm and apply. The deadline is
Friday , March 17, 2023. I just want to point out, Madam
President, that this is this Friday.
Madam President, the department is very cognisant that our camps cannot meet the needs of all and
are limited in space and time duration. That is why in
Goal 4 of the National Youth Policy the aim is to encourage and promote entrepreneurship . To that end
the Department of Youth, Sport and Recreation will host its first Annual Day Camp Conference on Saturday, the 25
th of March 2023 at Bermuda College. The
conference is for current and potential camp operators. This day -long interactive conference will focus on practical and hands -on facilitations to ensure attendees
leave with the skills and tips to enable their teams to
perform to the peak of their abilities and to push the
boundaries in delivering high- quality service and inclusive camps.
Madam President, the Youth, Sport and Recreation Department ’s Day Camp Conference will be delivered in collaboration with the Departm ent of Child
and Family Services, the Coalition for the Protection of Children, WindReach, Tomorrow’s Voices and the De-partment of Health. These collaborations will ensure
that the training provided is delivered by key persons
who are hands -on in their industry. There will be sessions on the following: building positive r elationships,
working with children with exceptionalities, safeguarding children, and safety matters. Additionally, there will
be a breakout session where attendees can choose be-tween the f ollowing: Marketing Your Camp, Being Resourceful with Art, Out of the Box Games , and Developing Youth through Sports. Each attendee will receive an electronic resource package including information
from each session and a toolkit on things you need to
do to run your camp successfully.
Madam President, as our camp operators start
to prepare for the busy 2023 summer camp season, the department want s to ensure that all are adequately prepared and have the tools to run successful camps. To
register for this f ree conference, visit our website at
www.youthandsport.bm or call the Department of
Youth, Sport and Recreation for more information.
Lastly, Madam President, after the Camp Conference, the Department of Youth, Sport and Recreation will host a Camp Expo the following day, on Sunday, March 26, 2023 also at the Bermuda College g ym106 15 March 2023 Official Hansard Report

Bermuda Senate nasium from 1:00 pm to 5:00 pm. If there are any parents looking for camps for their children and do not
know where to start, we have a one- stop shop to ease
parents’ needs. The expo’s purpose is to give parents
of campers the opportunity to explore other camps and summer activities for their children. Parents can visit
booths to receive information about camps that specialise in art, dance, sport , STEM and more. For more information on summer employment opportunities, the
Camp Conference for entrepreneurs and the Camp
Expo for parents, please visit our website at www.youthandsport.bm or call [295- 0855]
Thank you, Madam President.
The President: Thank you, Minister Darrell.

INTRODUCTION OF BILLS

The President: There are none.

FIRST READING OF PUBLIC BILLS

FIRE SAFETY AMENDMENT ACT 2023

POLICE (AMENDMENT
AND VALIDATION) ACT 2023

PUBLIC HOLIDAYS AMENDMENT AND
VALIDATION ACT 2023

MUNICIPALITIES AMENDMENT ACT 2023

LAND TAX AMENDMENT ACT 2023

STAMP DUTIES AMENDMENT ACT 2023

CUSTOMS TARIFF AMENDMENT ACT 2023

PAYROLL TAX AMENDMENT ACT 2023

PUBLIC TREASURY (ADMINISTRATION AND
PAYMENTS) AMENDMENT ACT 2023
The President: The following public Bills have been received from the Honourable House of Assembly and
are now read for the first time. Their titles are, respectively , the Appropriation Act 2023, Governor’s recommendation signified; the Fire Safety Amendment Act 2023; the Police (Amendment and Validation) Act
2023; the Public Holidays Amendment and Validation
Act 2023; the Municipalities Amendment Act 2023; the
Land Tax Amendment Act 2023; the Stamp Duties
Amendment Act 2023; the Customs Tariff Amendment Act 2023; the Payroll Tax Amendment Act 2023; and
the Public Tr easury (Administration and Payments)
Amendment Act 2023.
FIRST READING OF PRIVATE BILLS
The President: There are none.

QUESTION PERIOD

The President: Senators, we will now entertain questions on the Statement that has been given by Minister Darrell.
Would any Senator care to speak?
Senator Smith, you have the floor.
Sen. Ben Smith: Thank you, Madam President, and
good morning.
The President: Good morning.

QUESTION 1: SUMMER EMPLOYMENT AND
ENTREPRENEURSHIP OPPORTUNITIES

Sen. Ben Smith: I would like to thank the Minister for
providing us this update and information to not only
campers but people who are interested in getting involved with the camp, the young people whom we could get employed and also parents who would be interested in having their children take part.
I think it is important that we have these opportunities in the summer to have our young people participate in a healthy and structured programme that allows
them to enj oy themselves at the same time that they
are going to learn different things over the summer.
I just have a couple of questions. The main one
really is that I notice that there was specific mention of
the age 18 years old. I was just wondering if the Mini ster was able to give us any clarity on whether there was any way of having a programme for maybe students
who are 16 to 18.
And the reason I ask that question is because
a lot of times if you could start to prepare those young
people for these jobs, find ing out whether they were interested in being part of the important initiatives that
were laid out here. T his might be the opportunity to
structure something for them to learn so that when they [turn] 18 they are prepared to be able to take on these
jobs that are going to be available, whether it is a junior
counsellor or something to that effect , because they are
able to take the SCARS course at 16. They are able to participate and learn a lot of the skills in protection that
we are going to need. It would be important for us to
also give them an opportunity to get their feet wet of
what these jobs would be.
These might be our future teachers. These
might people who are going away to school, and what we want is to build a structure for them to come back
and be a part of. So, if the Minister could just give us a
little bit of information on why that decision is that way
and whether there is another programme that would support our young people to develop them toward being able to take these jobs, I think tha t would be helpful.


Bermuda Senate Thank you, Madam President.

The President: Thank you, Senator Ben Smith, Opposition Leader in the Senate.
Senators, the Minister would like to hear any
other questions that Senators may have.
Senator Tucker, you have the floor.

QUE STION 1: SUMMER EMPLOYMENT AND
ENTREPRENEURSHIP OPPORTUNITIES
Sen. Robin Tucker: Thank you, Madam President.
And again, thank you to the Minister for bringing this
Statement. I mean, I think it is a really good initiative.
I would just like to ask a couple of basic questions. I would like to know the total number of spaces
that are available within the camp. I think the public would like to know that.

QUESTION 2: SUMMER EMPLOYMENT AND
ENTREPRENEURSHIP OPPORTUNITIES

Sen. Robin Tucker: I would also like to know an example of the types of needs that the camps will be unable to meet. In addition, [I would like to know] if there are any plans for any specialised camps for children,
so children who have learning, behavioural or developmental needs , because this would be a good thing, in
my mind, for parents to be able to have that additional
support and the children for those specific types of areas.

The President: That is your second question, yes.

Sen. Robin Tucker: Yes.
The President: Do you have a third?

QUESTION 3: SUMMER EMPLOYMENT AND
ENTREPRENEURSHIP OPPORTUNITIES
Sen. Robin Tucker: Yes, just the cost of the camp,
please. Thank you, Madam President.
The President: Thank you, Senator Tucker.
Would any other Senator care to ask questions
on this Statement?
Hearing none, then it is over to you, Minister.
Sen. the Hon. Owen Darrell: Thank you for your questions, and I will answer them in order.
Senator Smith, thank you very much for pointing it out. Believe it or not, when we had a briefing i n
the office and they talked about 18- year-olds, the first
question I did ask was, Well, what about junior counsellors? And as you noted, in my Statement , 52 years
this Summer Day Camp has been around. And I think
we all remember when there were junior counsellors at the age of 16 who were getting paid as junior counsellors. And at one point there even may have been ones
as young as 14- year-olds who were volunteering.
Over 52 years I am sure much has changed in
society. And the d epartment has felt that, fi rst of all, the
demand to be counsellors and to seek employment is
really, really high now. There are some individuals
whom I talked about who are entering the education
field who are unable to get spaces in these camps. Second, we feel that it is a better place for 16- year-olds to
go to Workforce Development, which has a full summer
programme that caters to 16- year-olds. And without going into the weeds and the details, in recent years there
have been a few unfortunate incidents and issues, and
we felt tha t 18 would have been a safe space to start
hiring. So that [answers] the first question.
So, there are opportunities available again for
16-year-olds, but [they are] through the Workforce Development Programme. It may have placements that
are better suited for individuals just entering the workforce rather than working essentially with other children.
The second question was, What is the number
of total available camp spaces? The total number of spaces is 500. So throughout the camps we have 500
spots available. And if you know anyone who has ever
tried to register for camps, we put a website up and we
tell everybody that camp registration will go live at
9:00 am. And by 9:07 I can tell you that my phone is
ringing off and the Premier’s phone is ringing of f and
everyone else is upset that I went on at 9:07 and there
were no available spaces. And something has got to be
wrong with the website. But that is actually not the case.
That is how significant the demand is. So, if you are five
minutes past the regis tration time, we do start to put
people on the wait list, which is why we talk in the State-ment about looking for other alternatives.
And the next question someone asked, and
this ties into Senator Tucker’s question, while we cannot tell an entrepreneur w hat to charge for their camp,
at this juncture we are at least making other opportuni-ties available and highlighting other camps outside of
the Summer Day Camp Programme.
And to Senator Tucker’s question, the registration fee for Summer Day Camp ( and this would explain
why registration is completely full by 9:05) is $60. So it
is $60 per week to attend Government Summer Day
Camp.
So, I think those are the questions that were
asked, Madam President.

The President: Senator Tucker, you have a supplement ary question?

Sen. Robin Tucker: No. I just wanted clarity because
I did ask about if there were any plans for specialised camps.

Sen. the Hon. Owen Darrell: Ah, you did ask that, yes.
108 15 March 2023 Official Hansard Report

Bermuda Senate Sen. Robin Tucker: Thank you.

The President: Thank you, Senator Tucker.
Sen. the Hon. Owen Darrell: So, you had another
question? I am sorry.

The President: Senator Ben Smith.

QUESTION 2: SUMMER EMPLOYMENT AND
ENTREPRENEURSHIP OPPORTUNITIES

Sen. Ben Smith: Thank you, Madam President.
Just following on bec ause in the Minister’s response to my question he said that there is potentially
more demand for these jobs than there will be—there
are more people who want the jobs than the number of jobs that are going to be available. So, would the Minister say that t here is going to be a list of 18- plus [people] who are in this area that potentially other camps
could draw from? As an opportunity, what could hap-pen is, say, we have this list of people who have been
approved by the Government. But we just do not have
enough space within our programmes to [use them].
But we are opening this up. We have done the vetting
process for other camps, private camps to be able to
take in these young people to give them that opportunity. Because there will be more camps than just t he
government camps. And it would be important for us to
give that opportunity and share that information so that,
one, these camps now have access to qualified and hardworking young people; at the same time these
people get the experience.
So, if the Min ister can let us know whether that
is a possibility? And if so, where can camps look to find
that list ?
Thank you.
The President: Thank you.
Minister, there is a question and a supplemental.
Sen. the Hon. Owen Darrell: I will answer them backwards.
I will dare anyone say that we do not have collaboration in the Senate, Madam President , because
that is an excellent suggestion. And as the registration
does close this Friday, which is March 17, that gives us
an entire week and a bit to sort through those applica-tions. And I will pass that suggestion on to the director. And I think that is an excellent suggestion that at our
camp conference—well, not the expo, but at the camp
conference I think that would be a workshop or a portal
that could b e made available if other camp operators
are looking for quality staff. So, thank you.
I want to go back just to tag onto another question that was asked. And we talked about camp availability. Quite frankly, we always find ourselves in a holding pattern based on the availability of schools and school buildings, which gets a little trickier now with the
ongoing education reform and bringing on other
schools. But once we get a clear indication from the
Department of Education as well as collaboration with
Public Works as to which schools they are going to be
working on, then we can decide how many schools we
have available to put on Summer Day Camp, which
then may open up or decrease the amount of spaces
that we have available.
And the question about specia l camps. Not
only do we have a camp for students with exceptional-ities. The answer is yes, we do. But we also have special camps for pre- teens. There is one called Boys to
Men. There is another one that I think it was called
Women to Ladies. So, we do offer some summer day
camps based for special programmes outside of your
traditional Summer Day Camp that most people would be familiar with for the majority of these 52 years.
And I am actually made to understand that if
camps contact the department, they do give and they
have previously given r ésumés (if the person allows us
to) and names of potential staff members whom they can look into and research. So that has been done in
the past.
Thank you, Madam President.

The President: Thank you, Minister. And thank you,
Senators, for asking the questions. And I think that has
been a very fulsome coverage of the Statement. So,
thank you all. We are now moving on.

ORDERS OF THE DAY

SUSPENSION OF STANDING ORDER 71

The President: The Order item to be considered under
provisions of Standing Order 25, with the suspension of
Standing Order 71, the Senate will initiate debate on
the 2023/24 Estimates of Revenue and Expenditure.
Senator Arianna Hodgson, Junior Minister for
Finance, you have the floor.
[Motion carried: Standing Order 71 suspended.]

Sen. Arianna Hodgson: Thank you, Madam President.
Madam President, I move that the provisions of
Standing Order 25 be granted so that Senate may now
proceed with the second reading of the public Bill enti-tled the Appropriation Act 2023.

The President: Is there any objection to that motion?
No objection.

[Motion carried: Leave granted for the Appropriation
Act 2023 to be read a second time on the same day as
its first reading. ]



Bermuda Senate Sen. Arianna Hodgson: Thank you, Madam President.
I move the Bill entitled the Appropriation Act
2023 be now read a second time together with consideration of the Estimates of Revenue and Expenditure for the fiscal year 2023/24.

The President: Is there any objection to that motion?
No objection.

BUDGET STATEMENT IN SUPPORT OF
THE ESTIMATES OF REVENUE AND
EXPENDITURE FOR THE YEAR 2023/24

Sen. Arianna Hodgson: Thank you, Madam President.
Madam President, Bermuda stands at more
than the dawn of a new fiscal year. No society has been immune to the socioeconomic impacts of the pan-demic, foreign wars, inflation or disruption to the supply chain. Our growth aspirations and the promise of renewal have been somewhat frustrated by these lingering trials, but even in the midst of such unprecedented
challenges, Bermuda, this jewel of the Atlantic, has
demonstrated a determination to defy the odds.
Madam President, amidst the very real hardships that our people are experiencing, there is cause
for hope. This budget wil l use the mechanism of public
financing to harness that hope by investing in people,
advancing critical infrastructure projects, and continuing the work of change demanded of this Government.
Madam President, the Bermuda Progressive
Labour Party has alway s been about the politics of
hope. It is a mantra set up by the first PLP Premier, Dame Jennifer Smith, and it has been the guide for all
of those who would offer themselves for public service under our banner. In a 1997 speech to the then- International Companies Division of the Bermuda Chamber
of Commerce, Dame Jennifer said this: “A Progressive
Labour Party Government will create a Bermuda in
which the Government will not only serve the people,
but we will rekindle hope, heal its present divisions, and
replace apathy and alienation with vigour and a feeling
of oneness and unity. We will work steadfastly to create
a Bermuda in which one can grow up healthy, enjoy old
age and live to see children and children’s children do better than they did. We will work for justice in the workplace. We will work for a more peaceful and peaceful
community so we can once again feel safe on our streets and in our homes.”
Madam President, that call to action, that vision
applies equally today as it did 26 years ago when Dame
Jennifer said it. This 2023/24 budget addresses the
complexities of the 21
st century changed demands
while staying true to the core ideals that the people of
Bermuda have endorsed in five of the past six elections. Madam President, the year 2022 was one of
many challenges. Geopolitical conflict, inflation and food supply crises, supply chain bottlenecks and the
lingering effects of the COVID -19 pandemic have
caused shock waves across the global economy.
The International Monetary Fund estimates
that the g lobal economy will grow by 3.4 per cent in
2022, slow to 2.9 per cent in 2023 and then rise to
3.1 per cent in 2024. Growth in advanced economies is
expected to decline sharply from 2.7 per cent in 2022
to 1.2 per cent in 2023 before rising to 1.4 per cent in
2024. The United States’ growth is projected to fall from
2.0 per cent in 2022 to 1.4 per cent in 2023 and 1.0 per
cent in 2024. On the other hand, growth in emerging
markets and developing economies is projected to rise
modestly, from 3.9 per cent in 2022 to 4.0 per cent in
2023 and 4.2 per cent in 2024. Global inflation is expected to fall from 8.8 per cent in 2022 to 6.6 per cent
in 2023 and 4.3 per cent in 2024.
Madam President, in addition to projections of
slowing economic growth and lower inflat ion for 2023,
we are generally expecting higher global interest rates and tightened monetary conditions. Variable scenarios
include a boost in spending from pent -up demand and
faster disinflation. Overall, inflation is expected to continue on a downward tr end as international fuel and
non-fuel commodity prices decline due to weaker
global demand. The tightening of monetary policy is expected to continue putting downward pressure on core
inflation. An easing in advanced economies’ labour markets is expected to moderate wage inflation.
As consumer preferences revert to services,
prices of goods are expected to fall. Madam President, the pandemic has created an environment of higher
debt levels, lower growth and higher borrowing costs,
placing many emerging an d developing economies at
a high risk of debt distress. This exacerbates the vulnerability of these economies as global interest rates
continue to increase. Further, an escalation of geopo-litical tensions could lead to disruptions in the global
supply chai n, resulting in upward pressures on the
prices of goods such as energy and food, and the possibility of tighter monetary conditions. Navigating 2023
requires the prioritisation of actions to reduce inflation,
contain the re- emergence of COVID -19, ensure fi nancial stability, restore debt sustainability, address supply
chain constraints and strengthen multilateral cooperation.
Madam President, on to domestic economy.
Bermuda’s gross domestic product, the primary indica-tor for economic growth, is estimated to have grown between 3.4 [per cent] and 3.9 per cent in 2022. In 2022
Bermuda saw signs of economic growth supported by a rebound in quarterly GDP data in the first half of the
year. Positive economic performance was fuelled by
new international business registrations, visitor spending, higher employment income, greater levels of
household consumption and increased construction ac-tivity, indicating a continued trajectory of economic recovery.
110 15 March 2023 Official Hansard Report

Bermuda Senate As we have heard, Bermuda continues to see
growth in international business. The year 2022 saw
812 new companies and corporations and a 5.2 per
cent increase in jobs with 230 new jobs being filled. I am happy to report that for the second consecutive year the majority of the new posts were actually filled by Bermudians rather than guest workers, proving that the
balanced policies of the Bermuda Progressive Labour
Party Government create the catalyst for growth in IB
and ensure Bermudians benefit from that growth. This
sector now provides 4,642 jobs within our economy and
is the single largest economic activity group.
Madam President, with the continued easing of
border restrictions, the travel industry globally showed signs of a rebound in 2022. And Bermuda’s tourism
sector reflected this as demonstrated by a significant
improvement in air visitor and cruise visitor spending. We saw an increase in employment levels by 6.3 per
cent, bringing the total number of jobs in the accommodation and food service sector to 3,629.
Madam President, the construction industry in
2022 showed a decline in both building permits and
planning applications. However, during the first three
quarters the value of new projects started grew from
$83.4 million in 2021 to $100.6 million, an increase of 20.6 per cent. This figure for the first three quarters of
2022 surpasses the last three years’ annual totals and is above the pre- pandemic levels of 2019. This signifies
a strong recovery within the sector, which also saw jobs
increase by 1 per cent in 2022.
Madam President, despite the increasing inflationary pressures experienced throughout 2022, Bermuda’s overall rate of inflation remains relatively low
compared to advanced economies as reflected in the Consumer Price Index, which indicates an annual inflation rate of 3.8 per cent for November of 2022. The
overall rate notwithstanding, food price inflation is still registering at 10.4 per cent. However, the current trend
of inflation indicates that it has peaked and is beginning to abate.
Madam President, Bermuda’s balance of payments continues t o record relatively large current account surpluses, which are an important strength in the Bermudian economy. Bermuda’s total current account surplus over the first three quarters of 2022 was reported at $926 million. This figure is 25.8 per cent more
than the $736 million recorded over the first three quarters of 2021. Madam President, sustainable economic
growth cannot be achieved without an expansion of
jobs within our economy and a reduction in unemploy-ment levels. In 2022 the total number of jobs fill ed in
Bermuda increased by 402 posts, or 1.3 per cent, from
31,316 in 2021 to 31,718. This rebound in employment levels in the Bermudian economy comes as a result of
the robust growth in the IB sector, our recovering tourism sector, and the professional sc ientific and technical
sector, which collectively represented 76.1 per cent of
the total new jobs filled in 2022. For the second consecutive year, Madam
President, the job positions in public administration have declined. The number of jobs filled went fr om
4,008 in 2021 to 3,883 in 2022, recording a decrease of 3.1 per cent, or 125 jobs. Madam President, strong
growth was observed in employment income for the
first three quarters of 2022. It is estimated to have increased by 6.6 per cent, or $180.6 million, when compared with the same period in 2021. This increase was driven by the international business sector which saw
an increase of $94.3 million, or 8.9 per cent. Despite
the uptick in inflation, both personal consumption and
the retail sector showed si gns of growth in 2022.
Household personal consumption for the first three
quarters of 2022 was estimated to be $2.97 billion, reflecting an increase of 17.5 per cent, or $441.7 million,
over 2021. Total gross turnover in the retail sector saw
that $990.6 m illion, which represents a 3.1 [per cent]
increase when comparing the first 10 months of 2022
against 2021.
Madam President, the positive growth across
many major economic indicators signals a reversal of
the downward trends experienced during the midst of
the pandemic, with many indicators now nearing prepandemic levels. The growth of employment levels in
our key sectors is evidence of increasing confidence in
our economy. Inflation is downward trending and tour-ism is on the trajectory to reach pre- pande mic levels.
However, we face several external risks —higher global
interest rates, supply chain disruptions, geopolitical tensions, and the impact of climate change and its correlation with our insurance industry. We must therefore
remain focused on creatin g sustainable growth through
economic diversification and the strengthening of our
core sectors, such as international business.
Madam President, the international business
sector, particularly the insurance and reinsurance in-dustries, continue to be the bedrock of our economy. In
2020 they showed their resilience by avoiding contrac-tion and then followed that in 2021 with the fastest year
of growth in 15 years. It should be acknowledged that
much of Bermuda’s economic stability during the peak
of the pandemic and subsequent recovery, as evidenced by the consecutive quarters of GDP growth, is
largely the result of the contributions of our most signif-icant economic pillar. In 2021 the international business
sector contributed over $2 billion to the Island’s economy with the largest direct contribution being $235 million in payroll tax. However, the impact of the Island’s international business sector flowed beyond payroll tax,
as it also spent more than $74 million toward rent and
$7 million on local entertai nment, and they also donated $14 million to charities. [The international busi-ness sector] also provides educational scholarships
and internships for young Bermudians.
Madam President, the international business
sector has also significantly contributed to job growth.
Since 2019 jobs have consistently increased with 591


Bermuda Senate additional jobs created in the last three years representing growth of 14.7 per cent. Madam President, this
bodes well for our future and continues to reinforce our place as a leading international financial centre.
Madam President, an important aspect of
credit rating reviews is that they provide an independent and non- political evaluation of Bermuda’s ability
and willingness to serve its financial obligations. These
ratings are viewed as a global affirmation of where we
are economically and a metric to sustain existing busi-ness and attract new business to the Island. Madam President, we are pleased to see that in 2022 S&P,
Moody’s and KBRA all reaffirmed Bermuda’s strong
sovereign credit and senior unsecured debt ratings and
maintained the outlook as stable. The ratings indicate
that Bermuda’s bonds are seen to be of good quality
with a low credit or default risk and have been rein-forced by positive comments about Bermuda’s growth
prospect s.
Madam President, this 2023/24 budget is not
made in a vacuum. There is a context and a framework
to the fiscal decisions made by this Government, and
this context demands that we conduct a careful examination of the past in order to better understand t his present and future. I wish to reaffirm the record of the Progressive Labour Party in managing the fiscal debacles
left by the One Bermuda Alliance. And I want to do that
because the context is critical to understanding just how significant this budget is to Bermuda and her people. Despite the hand we were dealt in 2017 with the failed Morgan’s Point project and an unwise airport pri-vatisation that jointly have cost taxpayers over $250
million, I will take some time to remind the people of
Bermuda of the progress that has been made despite
a once- in-a-century pandemic. And Madam President,
I will use this speech to make clear the difference in philosophy between this PLP Government and the Op-position.
In July of 2017 the people of Bermuda voted to
change the direction of this country and entrusted the
PLP to bring about that change. The people chose to put an end to one of the most divisive periods of recent
memory and elected this Government to build a better,
fairer Bermuda. We are proud of what we have accomplished thus far, yet equally aware that more can,
should and must be done to ensure the dreams and
aspirations represented by that resounding win at the
polls in 2017, and to a greater extent in 2020, are realised. Governing through these unpredictable times has
not been easy. And just as I can admit that we have not gotten everything right, I can assure the public that we
have not lost sight of the mandate that we have been
given and that we have made progress on the issues
that matter to the people of Bermuda.
Bermuda’s high cost of living has been the primary issue of concern for voters well before the recent price increases due to factors largely outside of the
control of the Government. The world is experiencing
the highest rate of inflation in four years, and though our overall inflation rate may be less than many other
countries, we are already starting from a higher base
price, and therefore, working people in this country feel
the impact just as much as the rest of the world. The
people of Bermuda expect their Government to act to provide relief for the hardworking Bermudians and their
families. Madam President, that is what we have done,
and that is what we will continue to do.
That is why we reduced payroll tax for working
families from its highest level in history in 2016 under
the Opposition to the lowest level in history under this
Government. That is why in 2018 we reduced the duty
on essential grocery items, and in 2022 we eliminated
duty on essential goods while working with importers
and grocers to ensure their savings were passed down
to the customers. That is why we amended legislation
to address banking fees to help put an end to unjust banking practices. And that is why we provided direct
financial support to parents of public school students
and delivered a payroll tax rebate for workers earning
$96,000 or less. We have eliminated payroll taxes for
disabled workers and eliminated land taxes for registered charities and nursing homes. And that is why
while gas prices were soaring throughout the world, we
acted to freeze local fuel prices to protect families and
businesses against record oil prices.
That is why, Madam President, this Government also launched a flagship mortgage guarantee pro-gramme which will reduce mortgage rates for hundreds
of Bermudian families. Bermuda’s seniors may have
seen many decades come and go, but they have not
forgotten that in requesting a pension increase to maintain their standard of living, the former Government told them that money does not grow on t rees. Our seniors
can vividly remember being cast aside by the OBA during their 55 months of governing. And that is why in
2017 our seniors voted for a government that understands the challenges they face and will fight to ensure
they can live out their go lden years in the comfort they
so richly deserve.
That is why this Government continues to increase our seniors’ pensions at the rate of inflation and amend legislation to provide better standards in our
care homes. That is why we expanded the personal
home care benefit and introduced local radiation ther-apy coverage for FutureCare and HIP. That is why we
increased the FutureCare prescription drug benefit
from $2,000 to $3,000 a year and introduced interest -
free loans of up to $15,000 for families who need help
modifying their homes. And this is why this Government also approved funding to increase the stock of affordable housing for our seniors. And yes, we recognise that
we must continue to do more to help our seniors live in
dignity.
In 2017 our parents and students were discouraged by the state of the country’s education system and
the lack of opportunities the former Government provided Bermudians to enhance their skills and further
112 15 March 2023 Official Hansard Report

Bermuda Senate their education. Let us not forget that the former Government reintroduced fees at the Bermuda College
while cutting scholarships and short -changing our public education system. This Government has been com-mitted to undoing the damage done by the Opposition and restoring faith in our public education system. That
is why we i nstalled high- speed Internet and Wi -Fi in all
primary and middle schools and supplied all public primary school and M1 students with Chromebooks. That
is why we provided funding for new mathematics programmes, resulting in significantly improved outcomes in all of our primary schools.
That is why we advanced the most significant
public education reform in a generation and have suc-cessfully launched signature schools this year. That is
why we have ensured that every Bermudian who wants
access to further education at Bermuda College can do so. That is why we increased scholarship funding for
students attending overseas institutions and amended
legislation to allow Bermudian students with an ACCA
designation to be fully recognised as registered ac-countants in Bermuda. However, Madam President, we
recognise that more can be done, and this budget will
do more for public education.
In 2017, the call from our union partners and
other stakeholders was for the Government to put forth
policies that will protect the w orkers of the country, as
they are the driving force of our economy. That is why
we have provided government and hospital workers
and teachers with their first pay rise since 2011. And
why we will implement a minimum wage for the first time in this country , ensuring that all receive a basic
level of pay for their work. That is why we have imple-mented the youth employment strategy to facilitate greater opportunities for young Bermudians. And that
is why we introduced work permit moratoriums on 52 job categor ies, the most in Bermuda’s history. And that
is why we have passed new labour legislation that
strengthened trade unions while also increasing employee protections against bullying and sexual harassment. Again, Madam President, we recognise that
more can be done, and this budget presented today will
do more to advance the rights of workers in this country. We have decriminalised possession of up to
seven grams of cannabis and introduced a tax on dividend payments for the first time in history. We were the
first Government to implement roadside sobriety testing
and the first to provide public notification when sex offenders are released after their prison sentence. Our record will show that we have awarded over $1 million
in capital development grants to com munity clubs,
breathing new life into these facilities. I could go on,
Madam President, but as I have said we recognise that
more must be done, and this budget will do more to advance the progress the voters expect from their govern-ment.
The people of Ber muda so vividly remember
the One Bermuda Alliance doubling our national debt, having the largest deficits in Bermuda’s history and being downgraded by independent rating agencies. Bermudians are still feeling the effects of their failed Morgan’s Point proj ect, failed airport deal and furlough
days. In 2017, Bermudians looked to the Progressive
Labour Party to reduce our deficit, maintain our reputation as a global financial centre, diversify our economy
and encourage more economic parity. Despite the bad
hand we were dealt, and the devastating blows caused
by the pandemic, this Government is proud to see the
policies we have put in place since returning to office begin to bear fruit with the growing economy, declining
deficits, the strongest growth in our international business sector in 15 years and sustained stable outlooks
from rating agencies. We are also pleased to see our
net debt position lower than forecasted, and we are still
on track for a balanced budget in 2024/25. What is vital for this trajector y to continue is for this Government to
be laser -focused on creating the conditions required for
continued economic growth in Bermuda.
Madam President, our continued mission and
goal is to further advance the cause of balance and sustainable economic growth for the benefit of the people of Bermuda. Last year we spoke about the need to focus on economic growth, and that is what this Government has delivered. The economic growth we have
seen this year has been built on the economic growth we als o had last year. This means that we are successfully executing Bermuda’s Economic Recovery Plan,
and in line with that plan it is expected that Bermuda’s
GDP in 2022 will be back to pre- pandemic levels. Although this is good news, this economic recovery is not
touching all of our residents and many feel that they are going backwards. It makes no sense to brag about positive economic statistics when people do not feel positive about their personal economic situation. Economic
growth does not matter when any gains made in wages
are eaten up by increasing food prices or increases in
monthly mortgage payments.
Bermuda’s economic future is bright. Having
returned to where we were before the pandemic, we
must now look forward to growing the economy to ensure that it works for all Bermudians. We must move
forward with optimism knowing that Bermuda has weathered the economic storm of the pandemic. De-spite the challenges in our tourism sector due to the
closure of our largest hotel, all of the facts and statistics
indicate that our economy has continued to grow.
Madam President, this is what our budget is about, economic growth. It is about making sure that we invest in
our infrastructure, which is suffering after years of underinvestment. This budget is about ensurin g that the
people of Bermuda can build on the successes of the past, build on our successful navigation of the coronavirus pandemic, build on the successful execution of
Bermuda’s Economic Recovery Plan [ERP] and build a
secure future for all Bermudians.


Bermuda Senate Madam President, the Economic Recovery
Plan is a key feature of the Government’s comprehensive economic development strategy, which will be unveiled by the Minister of Economy and Labour in the
coming months. The economic development strategy will provide a strategic framework that will guide Bermuda to sustainable economic growth and development. The economic development strategy contains
strategic priorities and initiatives that will provide direction and drive the work plans of Bermuda’s economic
development organisations. In addition to the execution of the ERP, other strategic priorities include the retention and expansion of local and international business,
increasing foreign direct investment, marketing Bermuda’s value proposition and business ecosys tem, developing local entrepreneurship, increasing the working population and workforce development. The Economic Recovery Plan combines fiscal responsibility with a
clear path to sustained economic growth, employment
and greater economic development. The plan was developed in 2020 in response to the impact of the COVID -19 pandemic and has progressed to phase 3 of
its implementation. It is also worth noting that a dedicated project management office was established last
year to ensure the 31 priority initiatives under the Eco-nomic Recovery Plan are implemented efficiently and
in a timely manner. The team has been instrumental in
progressing these initiatives as they monitor, track, re-port and lend assistance where required.
Madam President, when discussing the Economic Recovery Plan, it is also critical that we acknowledge the plan’s benchmarks, which suggests
that the successful implementation of the 31 priority initiatives should deliver 1.3 per cent to 1.5 per cent per
year above baseline economic growth from 2023, leading to an improvement in Bermuda’s fiscal position. I am encouraged to see the mentioned priority initiatives advancing well, with 80 per cent on track and many already demonstrating positive results. For example, the economic investment cer tificate, which to date has generated over $369 million through direct investment into the Bermudan economy and the Work from Bermuda
Programme, which has seen 1,139 applications approved. As of November 2022, a full 259 Work from Bermuda certificate holders remain on the Island, positively contributing to our economy.
Madam President, almost nine years after the
previous administration passed the Gaming Act, Ber-muda does not have a casino. Amendments made
since that time have not been enough to address the obstacles that seem designed to prevent this industry
from taking hold in this jurisdiction. What is clear is that
having the integrated resort model as the only available
option for casino operation in Bermuda is a flaw in the
inherited regime. This law must be amended to permit
potential casino operators to choose the model that
best suits the intended venue for their casino. Likewise, the law must be amended to permit the Gaming Commission the flexibility to consider and grant licences on
that basis.
To reinforce the regulatory responsibilities of
the commission, Madam President, these amendments will be accompanied by a revised definition of “Minister”
in the Act to establish the Minister of Finance as the
Minister, similar to the Bermuda Monetary Aut hority,
and to allow the commission more flexibility in applica-tion of regulatory requirements. It is anticipated that
these changes will address impediments to operational and business support for gaming in Bermuda.
Madam President, the number of patient s
seeking medical care outside of their home country, popularly called “ medical tourism,” is growing at a rapid
rate around the world. And Bermuda is uniquely posi-tioned to take advantage of this opportunity. A commit-tee of stakeholders along with leading professionals investigated this opportunity further, and given Bermuda’s proximity to the US and Canada, its desirable
climate for medical treatment recovery and its positive
reputation for quality and standards, Bermuda was determined to be an ideal locat ion for a world- class medical tourism facility.
Madam President, this facility will create employment during the construction and operational
phase. It will also benefit existing hospitality facilities and restaurants and lead to an increased usage of the
airport and ground transportation. This will have a positive impact on Bermuda’s GDP from the financial benefits of thousands of new tourists, resort fees and medical professionals moving to and living on the Island. It
will also create opportunities for training Bermudians to fill technical positions within the new medical facility.
We are pleased to have received interest from leading
US academic medical centres and foreign investors,
and we anticipate making a further announcement on
this initiative dur ing the third quarter of 2023.
This Government continues to support small
and medium- sized enterprises through the Bermuda
Economic Development Corporation, which has pro-vided over $6 million in support through 334 local businesses in the forms of loans, grants and guarantees.
The office of the Uptown Development Authority offi-cially opened in September of 2022. The interim project team has been engaged with the Economic Development Department and the Bermuda Business Development Agency on the approved res idential schemes and
is in the early stages of connecting developers and investors with opportunities within the country’s economic empowerment zones.
This Government is also acutely aware of the
challenges we currently face concerning housing and
is pleased to see the interest from developers in the
approved residential schemes. The guidelines of the
schemes allow for large- scale residential and mixed -
use development in Bermuda’s economic empower-ment zones and also provide the opportunity for restricted p ersons to purchase units within the scheme.
114 15 March 2023 Official Hansard Report

Bermuda Senate Madam President, the Government also recently published a position paper regarding a minimum wage in
Bermuda which outlines what a minimum wage is, why
it is necessary and the proposed minimum wage rate of
$16.40 to come into force on the 1st of June 2023. The
Government has also put in place a mortgage guarantee programme as part of its work to lower interest
rates.
Madam President, we have invested in the
construction of electric bus charging facilities at the
Dockyard, St. George’s and the Fort Langton bus depots in support of the fleet electrification programme.
Additionally, both the national re- employment strategy
and youth employment strategy are currently being implemented. The Government, along with the Project
Management Office, will continue to work with the private sector and other stakeholders to ensure that the
31 priority items progress forward. The continued successful implementation of the economic recovery plan
initiatives will create better cond itions for sustainable
economic growth.
Madam President, Bermuda’s investment in
digital assets has shown steady and positive progress.
This year will mark five years since the passage of the
Digital Asset Business Act 2018. Bermuda set the tone early by being one of the first countries in the world to
have a comprehensive licensing regime for the digital
asset industry. We have been gradually attracting com-panies, building experience in navigating the risk of this
innovative new industry and refining our regime. This
strategy has borne fruit as Bermuda has developed a reputation for a clear, well -thought -out approach to the
industry that differs from other jurisdictions attempting to build industries in this rapidly changing space. Con-sistent with our prud ent and robust approach to regulation, Bermuda will carefully monitor developments in
this space and appropriately adjust our approach as
necessary.
In parallel, Bermuda has seen strong growth in
the digital asset insurance business through the innovative insurer regime introduced in 2019, with eight licensed insurers working with digital assets. Four of
those licences were issued in 2022, and they include
what may be the world’s first licensed insurer for digital asset licence insurance. Companies in the sector have
shown a promising and welcomed commitment to Bermudian job growth. The impact of a strong commitment
to Bermudian hiring cannot be [overstated], as these
Bermudians are receiving training and experience that
will be invaluable as the industry develops. This Government is confident that despite the challenges the
digital asset industry will survive. Bermuda will work
with regulators and industry players to achieve appropriate development of the sector in the context of robust
and effective regul ation. We will continue to build on our
excellence in insurance innovation and regulation to
promulgate and reinforce the positive impact of strong
and effective regulation in this sector as well. As noted previously, Bermuda’s economy relies heavily on the international business sector, in particular the insurance and reinsurance industry, thus making it vulnerable to external shocks. In an effort to
make Bermuda more resilient to such risks the Govern-ment will further diversify financial services on the Island, including the expansion of banking services that
support key initiatives within Bermuda’s economic recovery plan. The aim is to develop and implement a revised banking model for our country that reflects its
uniqueness and is consistent with our r eputation as a
quality international financial centre. To determine the
appropriate way to balance national interests against
commercial interests in the banking sector, a review
was completed by the Bermuda Monetary Authority in
2022. That review’s report is intended to assist the Government in managing not only the risks that come from
our economy but also the challenges that consumers
face from a lack of diversification in the banking sector.
In support of the above, the report envisions
that Bermuda’s banking sector will include domestic
and full -service banks, narrow purpose banks, specialised international banks, and credit unions. The Gov-ernment is fully supportive of the introduction of these
initiatives, and while incumbent banks have the competiti ve advantage of being more familiar with regulatory requirements, it is accepted that different innovations are required to enhance the banking experience
in Bermuda. This is supported by the number of related
banking sector initiatives currently underway within the
Ministry of Finance, working together with the Bermuda
Monetary Authority. In addition to banking sector diversification, work to further strengthen transparency and conduct -related obligations are at an advanced stage
of the policy development process, with rules due to be
tabled this year. Additionally, the Government will support the Bermuda Monetary Authority in advancing
open banking standards to Bermuda to provide better
services to local consumers while enabling appropriate digital banking services to be offered.
In October of last year the Government proudly
launched its Mortgage Guarantee Programme, a pilot
programme where the Government provides a partial
guarantee in support of local mortgages with Bermuda
Commercial Bank. The Government support reduces
the risk to the bank, and in return the bank is offering
not only a reduced interest rate starting at 5 per cent,
but also a reduced down payment requirement from the
standard 20 per cent to 10 per cent.
We are now reaching the end of the first phase,
and I am pleased to announce that young Bermudians are now on their way to earning their piece of the rock.
Beginning on the 1
st of April 2023 we will transition into
phase 2 of the programme where public officers with
mortgages at other i nstitutions will be eligible to transfer
them over and participate in the programme. But this
will not apply to mortgages where the public officer
owns multiple properties and does not reside in the
home. Also, as a part of phase 2 we will remove the


Bermuda Senate age r estriction so that any Bermudian applying for a
new mortgage is eligible.
After two challenging years in the world of tourism, 2022 became a pivotal year for the sector. Following the widescale deployment of COVID -19 vaccines
and boosters, business began to take advantage of the
resurgence of both domestic and international travel.
While Bermuda has not yet returned to 2019 visitor volumes, the Island saw significant year -over-year growth
in 2022 across key tourism measures including air ca-pacity, leisure air visitors and cruise travel. When comparing 2022 to 2021, the total number of leisure air visitors was up 80 per cent. The total air capacity increased by 50 per cent, and total cruise arrivals were
2,735 per cent higher. These significant increases were
seen in 2022. Year -end statistics underscore that more
work remains to be done before reaching the baseline
numbers of 2019.
In 2023 the Island can expect a historic increase in cruise arrivals which will positively impact tax revenue and generate more visitor traffic to businesses
at each port. This record cruise season will provide
more funds to the Bermuda Tourism Authority’s budget
to execute on the National Tourism Plan.
The Island’s hotel inventory has been a limiting
factor contributing to the challenge of securing a full return to 2019 air capacity levels. American Airline service from Charlotte and British Airways London Heathrow Gateway were bright spots in 2022, allowing
visitors additional connections throughout the US and
Europe. The Bermuda Tourism Authority will continue to support the Ministry of Transport through the Air Service Development Committee to identify needs, engage
new and familiar partners, and create demand in order to make the case for expanded airlift as more hotel
proper ties come online.
Madam President, there is the continued work
of opening the Bermudiana Beach Hotel, the completion of phase 2 for the reopening of the St. George’s
Club and the progress of the Ariel Sands properties. It
is clear there is significant pot ential for increases in employment in the hospitality sector in the coming years.
As in indicated in November’s Throne Speech, to support additional investment in Bermuda’s tourism econ-omy, the Government will make amendments to the
Tourism Investment Act to permit the Government
greater discretion in the granting of relief under the Act
to developers and those investing in attractions, restaurants and hotels. The aim of these amendments is to
provide incentives for establishments to invest in up-grades and refurbishments for their properties, and in
turn create jobs while enhancing the overall product
available to visitors.
The mission of this Government is to create
sustainable growth in Bermuda’s economy and to do
what we must to be competitive with other jurisdictions
competing with Bermuda for tourism and investment.
Right now Bermuda is not competitive, and these
changes will ensure that we attract investment to grow jobs and provide a brighter future for Bermuda’s tourism sector.
Madam President, the redevelopment of the
Fairmont Southampton Hotel is eagerly awaited. In the
months since we considered the legislation to support the project, lawyers, development consultants, bankers
and technical officers have been heavily engaged in the
preparation of t he various agreements that will provide
the framework for financing and development. Further, Madam President, we will be invited to consider
amendments to the Public Treasury (Administration and Payments) Act of 1969 to strengthen the protections for the Government of Bermuda in the provision
of the $75 million guarantee of local lending to support
the redevelopment project. The unique arrangement for
the repayment of that loan requires our legislation to be
modified to facilitate the structure of the loan agreement. Confidence remains high that construction will
begin in the second quarter of this year, and in preparation for this commencement the developers have
been repricing construction costs.
The volatility in capital markets delayed the
confirmation of financing, but it is a testament to the developers and their investors’ confidence in Bermuda
that the capital for the project’s completion has been
secured. A 2024 completion remains the target, and I
can assure the people of Bermuda that all parties have
demonstrably committed to advancing this project. Its economic importance has been magnified in recent
years as we have struggled to maintain key airlift and
grow Bermuda’s market share in the meeting and
large- group business.
Madam President, late last year we passed the
Morgan’s Point Company Bill which will enable the peo-ple of Bermuda to take control of the property. I am
pleased to note that we are now progressing the plans
to create a reimagined Morgan’s Point. Our advisors
have thoroughly vett ed and assessed a number of options and have provided well -supported recommendations on the best use of the site. Based on all of the
analysis and advice given, the development will not include a hotel with condos for sale, but instead we have
targeted thi s mixed- use site for the development of a
range of residential rental apartments including a com-ponent for seniors’ housing with an active and engag-ing amenities district filled with commercial retail and
restaurant opportunities at its centre, and accessi ble to
all. This plan represents productive and positive use of
the asset, generating appropriate cash returns, and also addresses several longstanding key goals of this
Government regarding economic stimulus and increasing housing supply. The plan will be executed in
phases, and the remainder of the development will be subject to existing real estate demand.
We see the 37- acre Morgan’s Point site and
plan as based on commercial principles. However, it
should also be viewed through an economic opportunity lens in the sense that this project will generate
economic activity for the country, specifically in the
116 15 March 2023 Official Hansard Report

Bermuda Senate western part of the Island. Investment in phase 1 will
serve as a platform for future phases around the Morgan’s Point land, and it is expected that future phases
will likely drive a higher commercial output for the Bermuda Government. Madam President, initial cost esti-mates for the first phase are $130 million. Discussions
about the fundraising process will be running parallel
with the design and defini tion of cost elements.
Our present assumptions on financing consist
of two debt tranches: a combination of a senior debt
tranche secured against Morgan’s Point land and ap-plicable assets as built, and a subordinated debt
tranche provided by a local Bermudian bank backed by
a government guarantee. Importantly, the construction
and operation of phase 1 will increase the value of the
remaining land assets under the control of the government and serve as a land bank for future development.
One of the most imp ortant and challenging
matters that the Government has to tackle this year is
the effective implementation of the Global Minimum
Tax Initiative, which has been advanced by the Organ-isation for Economic Co- operation and Development
(or the OECD). To achieve this aim, the Ministry of Finance has formed an International Tax Working Group with specialists in international tax matters and repre-sentatives of various parties whose members may be
directly impacted by this work. The group is tasked with
examining how Bermuda can appropriately implement this global agreement, taking into account the diversity
and complexity of our international business sector.
The global minimum tax will represent a fundamental change in the way that Bermuda does business and the
way that Bermuda’s Government raises revenue.
Madam President, the International Tax Working Group is set to report its findings and provide recommendations to the Government in July. After that,
the Tax Reform Commission will be empanelled to look at the changes necessary to our existing system of domestic taxation to ensure that it is in line with the requirements of the global minimum tax while also examining what other changes to our local taxes are needed
to ensure that Bermuda’s economy remains compet itive. Notwithstanding the perceived benefits, there will be risks to Bermuda’s economy with the implementa-tion of the global minimum tax, as there will be some
companies that decide being in Bermuda is not the best
option for them. Therefore, it is essent ial that we advance the reforms signalled by the Ministry of Economy
and Labour to grow Bermuda’s working population.
Bermuda is regarded by some as an offshore jurisdic-tion, but as the global minimum tax sets standard tax
rates throughout the world, we must adapt and become
a mid- shore jurisdiction.
When we refer to Bermuda becoming a midshore jurisdiction it means that Bermuda must be a
place where talented people from around the world de-sire to live and work. Simply put, we must make Bermuda a place that is more attractive to global talent
looking to relocate so that they can assist in powering our Island’s economic growth into the future. I know that
this perspective may cause fear in the minds of some
Bermudians, and I understand why some may feel that
way. Our costs are high, our labour market is tight, and
people are nervous about their futures.
However, Madam President, we cannot allow
this fear to prevent us from doing what is necessary to
fulfil our obligations to future generations. The Minister
of Economy and Labour has made it painfully clear what will happen if we are unable to grow our working
population. Instead of further reductions in taxes as we were able to deliver in this budget due to the economy
growing and our working population expanding, taxes
in the future would increase. An increase in taxes would
mean an increase in the cost of living in Bermuda. And
this is something that Bermuda’s residents and businesses simply cannot afford.
While some will say that the Government’s approac h is similar to that of the Opposition, I could not
disagree more. And I think it is important that we note the difference in approach between this PLP Government and the Opposition. This Government recognises
the importance of wide, careful and methodical consultation. And unlike the Opposition, who spring changes upon the electorate without any consideration, we kept
our election promise to form a Bipartisan Committee on
Immigration Reform, something our Minister of Finance called for back in 2013 when we were the Opposition.
That bipartisan committee worked through the first
stages of comprehensive immigration reform that enabled us to make sure we eliminated the problem of
mixed- status families, made it easier for Bermudians
going overseas to claim Bermuda status and extended
permanent residency to all long- term residents for the
first in this country’s history. These changes have had
a positive effect, but as the statistics show, we must do
more and we must move quickly.
As some will know, we are currently engaged
in the vital process of consultation, and so I encourage
all persons, particularly the Opposition (who have had
a lot to say in the media) to participate in this process
because it is vital that all views are heard as we aim to
expand our worki ng population in Bermuda in a fair and
balanced manner. Given the need to grow our working population, we must ensure that there is more housing for more people to live and work in Bermuda. Currently
there is an acute housing shortage which is being
driven by growth that we have seen in international
business over the past few years. That is why this Government is committed to providing $50 million over the
next three years to build more affordable housing units,
and why it has also delivered 48 units of af fordable
housing over the past five years. The transition of Mor-gan’s Point to a residential community and the initial
plan for 101 residential units will also provide additional
housing in Bermuda for an expanding mid- shore economy.


Bermuda Senate In 2019 the Government changed the Economic Development Act to allow for the building of approved residential schemes to further expand the housing stock. Currently, approved residential schemes are
restricted to the economic empowerment zones in Somerset, St. George’s and Nor th East Hamilton. However, those areas have not seen the progress that we
sincerely desired for this initiative designed to provide
more housing units. Though the team at the BEDC continue to work diligently to advance this initiative, it is
necessary that we expand the areas where approved
residential schemes can be constructed.
Therefore, Madam President, the Government
will advance a Bill that will amend the Economic Devel-opment Act to expand the eligibility for approved residential schemes from solely the economic empowerment zones to the entire City of Hamilton. We must do everything in our power to provide a base for additional
private sector investment to develop additional housing
in Bermuda to complement the Government’s efforts to
provide affordab le housing. This change does not
mean that we are abandoning our vision for a vibrant
North East Hamilton economic empowerment zone.
There will still be benefits to building approved residential schemes in Bermuda’s economic empowerment zones that will not apply throughout the City of Hamilton. However, units in approved residential schemes in the City of Hamilton will now be able to be purchased by residents, businesses and international persons,
without restrictions.
It is the duty of the Government to l ook at what
is working and to see what can be done better. And so
as we take concrete steps to increase the working population in Bermuda, we must ensure that this does not further raise the cost of housing, causing distress for
many working families. This change will increase the
available spaces that can be developed for approved residential schemes and incentivise the private sector
to start developments that may have been stalled due
to a lack of possible purchases.
From a fiscal perspective the primar y focus of
this Government is to continue on our path toward a
balanced budget and to meet the targets set by the Fiscal Responsibility Panel of a $50 million surplus by fis-cal year 2026/27, all while ensuring fairness in our tax
system and promoting economic growth to increase
Bermuda’s tax base. To achieve this, we must continue
to make the difficult and sometimes unpopular decisions required to demonstrate to external stakeholders
that the Government of Bermuda can be trusted to ex-ercise fiscal prudence. I am pleased to report that the
Auditor General has issued a clean audit opinion for the
last fiscal year. A key highlight for this fiscal year was
that the budget deficit narrowed significantly, with the
actual budget [deficit] recorded at $66 million.
Madam President, total revenue for fiscal year
2021/22 was $1.086 billion, which was $86.8 million, or 6 per cent, higher than estimates and $87.4 million higher than the previous year’s revenue of $998.3 mil-lion. Total current account expenditure on a modified
cash basis was $1.076 billion, which was $9.1 million
less than adjusted estimates. Total capital account
modified cash expenditure was $75.9 million, which was $16.9 million lower than the original budget estimates. Total capital and current account modified cash
expenditure for 2021/22 was $1.152 billion, which was
$28 million, or 2.5 per cent, higher than the original
budget estimate of $1.124 billion.
As a reminder, the deficit for fiscal year
2020/21 during the peak of the global pandemic was
$184.2 million. The following year ended with a deficit
of $66 million despite the continued payments to
Skyport and costs incurred due to the Morgan’s Point
project. The improvement is reflective of Government’s
policies pursuing economic growth and commitment to effectively managing the public purse. However, as I
will address later, this excellent budget performance
masks significant underfunding of the hospital, which
the Government has remedied in this current fiscal year
and will address further in the next fiscal year.

The President: Senator Hodgson, I just would like to
remind you that you have 10 minutes left of your hour
presentation.

Sen. Arianna Hodgson: Thank you, Madam President.
I will actually go on to the highlights of our current expenditure. Current account expenditure for fiscal
year 2023/24 is estimated at $972.6 million. This figure represents an increase of 2.9 per cent over the last year’s original estimate. This increase is in line with the
figure projected by the Fiscal Res ponsibility Panel,
which stated that a more realistic level of spending for
this year’s budget would be $973.4 million. The Cabinet
is aware that the current expenditure level this year will
carry over into next year and that any new programmes
will need t o be offset by revisions to existing ones,
which in essence makes this a two- year budget. Current expenditure is projected to increase by 1 per cent
over the next two fiscal years, which has been inserted
solely to take into account possible negotiated sal ary
increases for public officers.
All ministries except for Home Affairs received
a boost of funding levels this year. The level of current account spending set this year is a realistic baseline for
future budgets as it adequately funds government ser-vices that have not properly been funded in previous
years, including Public Works, National Security, public transportation, Economic Development, health care
and hospital funding, youth services, the judiciary, [and]
services for seniors. This level of spen ding is necessary to advance key government initiatives such as health care reform, education reform, continued implementation of Bermuda’s economic recovery plan and
the implementation of Bermuda’s privacy protection
legislation.
118 15 March 2023 Official Hansard Report

Bermuda Senate This budget increases th e child day care allowances for parents and transitional living for young persons ageing out of care and care homes. It also funds
the reintroduction of public health scholarships and air
quality monitoring for those affected by BELCO emis-sions while expanding social protections for families via
Financial Assistance.
Bermuda’s infrastructure has been challenged
due to years of under -investment. This inability to maintain basic infrastructure is not in keeping within an Island that has become an important international finan-cial centre and aspires to have an even greater impact
in the future. We recognise that we cannot be starving
our Island of needed investments in infrastructure in the
name of achieving a balanced budget. Therefore, this
budget contains $96 million in planned capital account
expenditure, the highest budget in capital spending in 13 years.
The most significant items of capital development expenditure in the 2023/24 budget relate to fur-ther investment in the Tynes Bay Waste to Energy fa-cility, additional affordable housing units, 40 additional
electric buses and infrastructure to support their recharging, refits to our fast ferries and investment to accommodate students at Bermuda’s new parish primary schools at Francis Patton and Purvis Pr imary. Additional funds have also been allocated to develop a new community health clinic in Somerset; purchase new Public Works equipment to reduce maintenance costs
while providing key services like clearing seaweed from
beaches, upgrading facilities that house public offices at the government quarry, depot and Marine & Ports
work shed; and replace ageing vehicles and equipment
for the Bermuda Police Service, Fire Service and the Department of Corrections. Finally, this capital budget
funds upgrades to Bermuda’s court facilities, additional investments in the government’s IT systems and an in-crease in funding to repave the roads in Bermuda.
In October of last year we announced support
for the $21.6 million grant to the Bermuda Housing Corporation to refur bish 137 older housing units inclusive
of 77 additional units, which represent the entire vacant
and derelict inventory owned by the corporation. This
project will again not only create jobs and stimulate economic activity, but also ultimately increase the stock
of affordable housing as promised in both our 2017 and
2020 general election platforms.
Madam President, the following items are the
revenue changes that form a part of the revenue estimate for fiscal year 2023/24. The payroll tax changes in this b udget come as a result of meaningful consultation that has taken place following the release of the
prebudget report. With our commitment to a transparent budgeting process the Government shared its considerations and the challenges faced when putting together an annual budget that maintained our path to a balanced budget in fiscal year 2024/25 including the
loss of a combined $40 million in revenue from the aircraft registry due to Russia’s invasion of Ukraine and the lost funding as a result of ending the travel authorisation. This is a budget for growth, and what is necessary for growth is that you support the businesses that
can provide growth in the economy. That means not
just international business but also local businesses both large and small, our t ourism establishments and
our retail outlets.
The headline is that no business in Bermuda
will pay any more in employer payroll taxes in this
budget than last year. All employer rates will either stay
the same or they will go down. Small businesses, the lifeblood of most economies, will see their payroll tax
liability decline by as much as 43 per cent. And we will
deliver payroll tax reductions to retailers, gyms, convenience stores, construction companies and truckers.
Our hotels and restaurants, which ar e still recovering
from the impact of the pandemic, will see their payroll
tax liability decline by 17 per cent.
Any individual making $132,000 or less per
year will pay less in payroll taxes next year. This repre-sents 86 per cent of Bermuda’s workforce. That is, 86
per cent of the workers in the economy, who give their time and talents to produce for their employers, will pay
less in payroll tax next year. [For] businesses with an
annual payroll of up to $200,000, their employer payroll
tax rate will move from 3.5 per cent to 2.5 per cent, a
29 per cent reduction. Actually, let me move forward.
(Sorry, Madam President.)
While Bermuda’s system for employee payroll
tax is regrettably complex, one of the hallmarks of a
good system of taxation is that it is s imple to understand. Unfortunately, the current structure of our em-ployee payroll tax is anything but simple. Although the Government desires to simplify this tax system in the
future, while we are in the midst of a review of our tax
policies due to the re quired implementation of the
OECD Global Minimum Tax, that necessary simplification will not be delivered this year.
Before this Government was re- elected in
2017, workers making $48,000 a year were paying
$2,280 a year in payroll taxes. And since then, t his Government has steadily reduced the tax burden on Bermuda’s workers, and we have continued to do so in this
budget. Next year the same worker will pay only $240
in payroll tax, a reduction of $2,040. This means that since this Government was elected, w orkers earning
$48,000 have paid nearly $7,000 less in payroll tax,
meaning $7,000 more in their pockets to spend on
things that they and their families actually need.
There are other changes in terms of customs
duty. We have made adjustments to fees to s upport the
Government’s necessary infrastructure investment,
and many of these fees are expected to actually generate an additional $500,000 in revenue for the Government.
I am proud to share that we are still on the path
to achieving the goal of a balanced budget by 2024/25,
and while it is true that we could have achieved a balanced budget on paper this year, to do so would not


Bermuda Senate have been economically wise. The Ministry of Finance
could have held to last year’s current expenditure target
rather than increasing current expenditures to ensure
that we deliver on key initiatives in the Government’s
platform and Bermuda’s Economic Recovery Plan to improve the lives of Bermuda’s r esidents. We could
have chosen not to reduce taxes on persons making
less than $132,000 a year and chosen not to reduce
taxes on local businesses while working families and
local businesses struggle with the highest global inflation seen in years.

The Pre sident: Senator Hodgson, you have less than
one minute left, so you need to finalise this.

Sen. Arianna Hodgson: Thank you, Madam President.
In closing I will say that I am proud to commend
to this Chamber a budget that will stay true to the mantra of hope set out in those early days of Dame Lois
Browne -Evans, Eugene Cox and David Allen. Of my
grandfather Arthur Hodgson, Nelson Bascome and
Walton Brown, and so many others who dedicated their
lives to service and the pursuit of that fairer and better
Bermu da that we continue to build.
I submit this budget with the greatest of conviction that we are on a good path toward continued eco-nomic growth and the better, fairer Bermuda that we all wish to see. Thank you, Madam President.
The President: Thank you, S enator Ariana Hodgson,
Junior Minister of Finance.
Would any Senator care to speak?
Senator De Couto, you have the floor. And you
have an hour.

GENERAL ECONOMIC DEBATE
BASED ON GOVERNMENT’S 2023/24
BUDGET STATEMENT

I am pleased to be here
with you today to discuss Bermuda’s current economic
situation and the Government’s proposed budget. We
will scrutinise the facts and figures, we will look at supporting data and we will ask questions. But ultimately, Madam President, while we talk about numbers, what
we are really talking about is, How is this Government
taking care of the people of Bermuda? How have they done so far, and how do we think they will do? What
are this Government’s priorities, and are they the right
priorities? Unfortunately, the picture of Bermuda’s economy is not pretty. The experience of Bermudians is not
a good one. And the track record and outlook of the
PLP Government’s performance does not leave much
to hope for. Madam President, we will discuss that while the PLP Government speaks often of confidence,
this confidence is not suppor ted by the facts and what
the people are feeling on the ground. And while there have been a few external factors driving this, the main factors have been the Government’s mismanagement
of the country’s finances and the numerous failures of
their misguided initiatives. In short, Madam President,
when people are asked, Are you better off today than
five years ago?, the answer is a resounding no.
The One Bermuda Alliance would improve our
Island’s economy by a responsible growth and a solutions -focused approach to create jobs and opportunity
for Bermuda and her people. We have a demonstrated
track record of this and look forward to turning our
country’s economy and, more importantly, our people’s lived experiences back into a positive direction.
Madam Preside nt, let us turn now to a survey
of the general economic situation. I would like to start
by expressing my thanks to our civil servants who compile, calculate and produce a wide variety of data and reports that we can use to better understand our country. A nd that includes the Budget Book, which I have
mine here in front of me. And so I would like to thank
them for their hard work and attention to detail, which
is much appreciated and certainly not taken for
granted.
Madam President, we will start with the GDP
(or gross domestic product) statistics, one measure of economic output. And just for clarity I am using here amounts adjusted for inflation or sometimes known as
real dollars . From 2017 through 2021 Bermuda’s GDP
has decreased by minus 1.8 per cent. Al though there
was strong uptick of 5.8 per cent in 2021, it was not
enough to make up for the reduction caused by COVID -
19 and the lacklustre growth in 2018 and 2019 of minus
0.2 per cent and 0.5 per cent, respectively. And unfortunately, because to me and many other informed observers, our official inflation figures seem a bit low, I am of the opinion that last year’s GDP growth was in fact even lower on a real basis.
By comparison, other jurisdictions have seen
more positive growth both before COVID -19, l ess
downturn during COVID -19 and even more growth
since COVID -19. For example, from 2017 to 2021, the
OECD in general saw a 2.2 per cent increase. The Euro area was slightly down at minus 0.4 per cent and the
USA, our major trading partner, saw 4.7 per cent. Compare that to our minus 1.8 per cent over the same period. As you can see, Madam President, while the world
economy has moved on from COVID -19, we have yet
to get up to speed here in Bermuda. And unfortunately
for the average Bermudian or Bermudian business, the impact of that slow economy is even worse. As we
120 15 March 2023 Official Hansard Report

Bermuda Senate learned from the Premier’s Budget Statement, international business is an important linchpin of our economy.
And the economic growth that we have managed to see
in our statistics is driven primar ily by that international
business.
Madam President, IB in 2021 provided 29 per
cent of our GDP, up from 26 per cent in 2017. Real es-tate, 17 per cent. Financial and insurance activities, 14
per cent. And all else combined, 40 per cent of our
GDP. From 2017 to 2021 international business GDP
was plus 11.4 per cent. Real estate was plus 7.9 per
cent. Financial and insurance was down minus 8.6 per
cent. And everything else was also down minus 10.7
per cent. For example, wholesale and retail down minus 9.8 per cent. Accommodation and food service
down minus 50 per cent. Professional scientific and technical activities are down minus 6.4 per cent. Madam President, I will spare you and the listeners the
rest of that table, but as you can see, outside of i nternational business, the Bermudian working in or running
a local business is hurting economically.
Madam President, let us turn to retail sales, another key indicator we can use to illustrate this tough
economic situation. For example, the November ret ail
sales index was down minus 10.3 per cent since 2017.
And in fact, the only annual increase was the post -
COVID -19 rebound of 9.5 per cent in 2020 in that time
period. All other years were negative.
This is no surprise for anyone walking through
the City of Hamilton these days who can see the closed storefronts. I have the greatest respect for our local businesses who are applying all of their creativity, ingenuity and elbow grease to stay up and running and
growing however they can in this tough environment. Meanwhile in comparison, in the United States retail
sales have grown 15 per cent since 2017. That is inclu-sive of the impact of COVID -19.
Madam President, unfortunately we see another grim stat istic in our jobs numbers. From 2018 to
2022 total jobs in Bermuda are down, minus 6.3 per
cent, from 33,855 to 31,718, a loss of 2,137 jobs. But
as with GDP, the impact on the average Bermudian is
worse. International business, which makes up 15 per
cent of the jobs and is the largest category of employment, grew the number of jobs by 14.6 per cent. Wholesale and retail lost minus 7.5 per cent, or 320 jobs. Accommodation and food service lost minus 28.1 per
cent, or 1,277 jobs. Human health and social work lost
minus 11.6 per cent, or 325 jobs.
Meanwhile, for comparison to our minus 6.3
per cent in total jobs, from 2017 to 2021 the Euro area
grew plus 0.5 per cent. The OECD grew plus 1.8 per
cent. And the USA grew in jobs 0.6 per cent. Madam
President, these jobs numbers are yet another indicator
of where our economy has not kept up with the rest of
the world with an unfortunately direct negative impact on thousands of people in Bermuda.
Madam President, let me round out these statistics with inflation. O ur current official rate in Bermuda is a touch under 4 per cent. Of which, food is plus 10
per cent, which everybody feels in the grocery store
each week. And we know that inflation in the US is still
over 6 per cent. So despite the official statistics, most
people in Bermuda are feeling a historically high cost of living. Bermudians are being squeezed from both sides
by high costs and a slow economy, a double threat.
Madam President, all of those statistics make
the case that while Premier David Burt and the PLP
Government profess hope and confidence, those
words ring hollow for most in Bermuda. But it is not just what the statistics are telling us. It is what my colleagues and I are being told on the doorstep. And,
Madam President, for the avoidance of do ubt, my colleagues and I do want everyone’s vote. We are out there talking to and listening to people and earning that
vote. And we have yet to hear anyone with hope or con-fidence in this Government’s ability to turn around the
economy.
Madam President, t his PLP Government
claims that it has created many initiatives to help the
people of Bermuda. And I will grant that it is true that
they have been able to provide a helping hand to some
of our fellow Bermudians, for example by shifting the
tax burden to hi gher earners. We have no argument
with that per se, and [we] support progressive taxation. And because so many in Bermuda are hurting right now, it is the right thing to do.
However, Madam President, the even better
thing to do would be to grow the econo my and create
real opportunity and jobs for people. Instead of reacting
to the symptoms, this Government should also be attacking the disease —our faltering economy. The PLP
Government is playing a zero sum game with the economy by increasing taxes and shif ting money around. Or
putting it another way, Finance Minister/Premier Burt is
simply finding ways to slice the economic pie thinner and thinner. The One Bermuda Alliance, Madam President, would grow that economic pie so that fewer people would need assist ance, and create a more vibrant
and dynamic economy.
Madam President, Premier Burt claims that 80
per cent of the economic recovery plan initiatives are on track. However, our own evaluation leads to a somewhat different conclusion. Here is our view on the top four initiatives as listed by the Minister of Economic Development earlier this year.
Vertical farming: As you know, earlier this year,
based on our research and speaking with local farmers,
we predicted that vertical farming as proposed by the
Government did not make sense for Bermuda due to
the excessively high energy costs it would require and
the fact that existing capacity in Bermuda was not fully
used. We suggested that instead the Government
should pursue right tech solutions in conjunction wi th
local farmers. Sure enough, this initiative was cancelled when the overseas partner pulled out due to financial
issues.


Bermuda Senate We were disappointed that the Government either would not or could not answer our questions about
this project, which we feel were particularly important
since the project failed and would provide insight on
how to improve similar projects going forward. How-ever, we were glad to see that the Government will follow our suggestion by hiring an agronomist to work with
local farmers.
Mada m President, the Tyne’s Bay Incinerator
Refurbishment Project: While we support the capital
expenditure required to update this vital piece of na-tional infrastructure, it is our view that this does not do
much for local economic stimulus compared to the
amount of money involved in the total project. We
learned [there was] $22 million budgeted for this project, [and] 70 per cent [of that] will be spent overseas.
Of the remaining 30 per cent, over half of that will be spent on existing Works and Engineering s taff, leaving
only 12.5 per cent, or $2.75 million, to be spent locally.
In addition, this project only came about due to the Government’s lack of attention to the incinerator and its fail-ure to properly maintain it. If anything, this project is really def erred capital spending, not stimulus.
Madam President, let us turn to gaming. We
now know that there is little to nil chance of gaming happening at all on the Island due to at least one of our
main hotel operators pulling out of its initiatives and others unlikely to continue for now. And as was predicted,
when the PLP Government changed the accountability
of the Gaming Commission, the main problem remains —the direct political control of the Commission,
which prevents operators from getting the appropriat e
banking support.
The Premier and the PLP Government are
doubling down on their bet here by putting the Commission under the control of the Minister of Finance, who is also currently the Premier. This, Madam President, is a losing bet for all of us. Inst ead, the Premier should
know when to walk away from the table and let the Gaming Commission become independent again as it
was originally constituted. To add insult to injury, the
Government is guaranteeing $9.8 million in loans to the
Gaming Commission. S ince there is no gaming industry on the Island and there is unlikely to be one at this
rate, the Commission will never have the income to repay these loans and Government is certain to have to
step in. That is a $9.8 million bad bet.
Madam President, turning to North East Hamilton: This initiative is the most sensible and the one we
can clearly support. We hope for its great success, along with the intention to allow further residential development throughout all of Hamilton. We believe this
increased deve lopment for housing will be essential to
go along with increasing our population. However, success here requires investors to be enticed by an improved economy, and without any realistic initiative from the Government to grow our population, this does
not seem likely to take off. Madam President, the Government also introduced several new initiatives in their Budget Statement
and reiterated others from prior Throne Speeches of
prior years. It is hard to know what to say about many
of these, as a few of them seem to have sprung from nowhere with little to no information, and they raise
more questions than answers. Madam President, I suppose we could see a possible path to success with
medical tourism, but it seems complicated and risky. I
note that our curr ent hospital is often at capacity. We
struggle to get the right medical expertise on the Island
and our health care is very expensive. How can we expect to provide expertise, resources and facilities to
people from overseas at an attractive price and with
convenience? It seems to me that we would be in competition with other jurisdictions where it is far cheaper
to operate or where it is much easier to access medical expertise. So, at first blush, medical tourism does not
seem practical to me. And important ly, as always when
evaluating these types of initiatives, we need to know,
Who are the advisors and who are the stakeholders?
That may tell us more about the likely success of this
initiative than anything else.
As we know, a major theme behind many of th e
Government’s failures has been its poor choice of partners. Many of them have been businesses that were
poorly conceived themselves or outright scam artists or
criminals —Arbitrade, Savvy, Kalera.
Madam President, I hope you enjoyed the
lovely picture of the proposed Morgan’s Point development in the Budget Statement. I am personally of the
view that this may be as much detail as we will ever see
about this project, based on this Government’s track record of transparency and accountability or, as I would
say, lack thereof. If I understand correctly, the Government and Finance Minister Premier Burt, which have
been staunchly against government guarantees, are
now proposing another new, large guarantee. This is
the definition of a flip- flop. The Morgan’s Poi nt property
was always a bit of a poisoned chalice due to its long
history of use by the US Navy and the pollution that engendered. Once the PLP Government swapped Morgan’s Point for Southlands, the Government, whoever
that may be, was always going to be o n the hook for
that liability.
Madam President, we agree that it is of the upmost importance to do something constructive with the Morgan’s Point property. However, we struggle with
this proposal in two ways. First, the Premier was abso-lutely clear that t his would not be a hotel. I would suggest, however, that if we want to stimulate a third leg of our economy and provide a range of jobs for Bermudians, would not a hotel in fact be what we would like to
see here? Secondly, Madam President, this development seems as if it would be in direct competition with
exactly the same investors and potential customers as we would like to see in North East Hamilton, Somerset,
St. George’s and Hamilton in general. This development with guarantees and, no doubt, concessions
122 15 March 2023 Official Hansard Report

Bermuda Senate would steal customers from the private developers that
we would like to see in those other areas. Finally, where
are the people for this development? Once again, we
believe that the success for projects like this will be connected to the real immigration reform that will let us grow our population by the 8,000 to 10,000 people that
are required.
Madam President, let us discuss digital assets
and FinTech. As we know, the Premier is frequently on
the road . . . excuse me, he is on the road and on the
record touting FinTech and digital assets as the solution to our woes. While there is a place for FinTech and
digital assets in our economy, we must tread very carefully and always be mindful of what Bermuda’s
strengths are and how they match up with potential
businesses that look to come to our Island. Our strengths as a jurisdiction are tax efficiency, a quality regulator and the associated good reputation, and our
natural charms and convenient location. We can always debate later in which order to place thos e
strengths, but I would put to you that our regulator and
good reputation are paramount and essential to the
long-term health of our economy.
Madam President, we must be very discerning
about which businesses and operators we allow into
Bermuda. While we support FinTech and digital asset
businesses as a concept, we would make sure that the Bermuda Monetary Authority exercised the highest dil-igence possible and that we fully understood why each
business wanted to come to Bermuda. We would stay
away from fancy promises and flashy MOUs, and en-sure each business made sense as a business and was
run by reputable stakeholders. This selectiveness is vital because right now the FinTech and digital asset in-dustry is filled with a wide variety of frankly confusing
technical activity from legitimate businesses to shady
characters and straight -up criminal activity like Ponzi
schemes. And there are many unsavoury operators out
there taking advantage of the hype.
Madam President, frankly we are lucky to have
avoided a d ebacle like the FTX scandal that has impacted the Bahamas and in fact the entire world of crypto and FinTech. But we have had our own disappointments. Every time I am in the city hall parking lot or by the bus terminal and I see Victoria Hall, I am reminded of Arbitrade. If you recall, Arbitrade was very
publicly and effusively welcomed to Bermuda by the
Premier in 2018 only to end up accused of fraud by the
US Securities and Exchange Commission and the Toronto financial regulator in late 2022. And unfortunately, Arbitrade’s fall from grace was no surprise to informed
individuals who had been paying attention to things like
their claims of gold bullion and the like.
Madam President, I have no doubt you have
heard of the failure this past weekend of the Sil icon Valley Bank that has been taken over by the US regulators.
And at the same time the regulators have also taken
over a bank called Signature Bank in New York. Now,
this situation is still unfolding in real time, but I think it is safe to say that Silic on Valley Bank and Signature Bank
may not have had the most prudent risk management.
As we know, in February 2019 the Government touted
Signature Bank as Bermuda’s FinTech banking solution via a press release. I would presume this is no longer the case, an d I wonder exactly how this will affect the Government’s specific plans for this industry
and how carefully Government vetted this partner.
Madam President, I provide these examples
not to say that we should avoid FinTech and digital assets but to demonst rate how easy it can be to set a foot
wrong if we do not properly pay attention. The One Bermuda Alliance would pay attention. Madam President,
we can all support a vision of a more efficient, customer
friendly and modern banking industry here in Bermuda.
However, the Government’s reform items do not add
much to what we have today, or raise some serious red flags.
Let us take the narrow purpose banks for which
there is already legislation to provide such licenses, but ultimately no banks [are] using them. The problem remains of getting correspondent banks for the relevant industries such as cannabis and gaming, both of which
initiatives are dead in the water in Bermuda. For credit
unions, we would welcome anything to support and
strengthen the Island’s exis ting credit union, and I am
not sure more competition would do that. For specialised banks, I repeat my concerns around FinTech. We
would need very carefully to consider and understand
why they want to come to Bermuda and what value they
would bring to our domestic market, if any.
Madam President, as for the Bermuda Digital
Bank [BDB], referred to as Government’s flagship initi-ative, we should be very concerned. I can do no better
than quote the Fiscal Responsibility Panel here from
their 2021 report, and I quote: “The BDB [Bermuda Digital Bank] must be fully independent of government and
subject to all the normal regulatory supervisory requirements and procedures of the Bermuda Monetary Authority.”
Also, I quote, “Any initial government start -up
capital s hould be strictly limited, and there should be
clear legislative and/or contractual provisions making clear that there is no scope for additional Government
finance provided directly or indirectly, and that the BDB does not benefit from any Government guar antee, direct or implicit.”
Madam President, the Government’s role here
is to create the regulation and circumstances that would allow a new banking entrant or an existing bank
to create a digital bank if that made business sense.
We of course in the OBA support creating a nation of
owners, one of the stated goals of this initiative. But in
our view, the best way to do that is to create a good
economy so that people have money to invest rather
than sprinkling digital pixie dust on everything.
Madam Presi dent, the last initiative I wish to
discuss is the Fairmont Southampton . Let us be crystal
clear: We want this project to succeed, we need this


Bermuda Senate project to succeed, we are hoping desperately for this
project to succeed. But to be honest, it is hard to know
exactly what is happening. It seems every time the
Government makes an announcement or expresses
confidence, nothing happens, or the project is changing and so forth. And as of today, I frankly cannot believe
another promised start date from this Government until
I see workers and hardhats up there.
Madam President, in September of 2020 the
hotel closing was announced, and a reopening was
promised in April 2022. That is almost a year ago. In March 2022 we heard the Premier say, I am confident
this transaction will close next month and construction
will commence . The grand reopening was promised for
2023. Madam President, I refer back to my comment about workers and hardhats. In October of last year the
Premier told delegates at the Progressive Labour Party Annual Conference that, “The deal has been don e. The
deal has been signed.” That is a pretty definitive statement, Madam President. In December last year, however, in the other place the Premier was unable to con-firm when the deal would be finalised.
Madam President, I am sorry for all of those
detai ls, but I thought it would be good to illustrate why
precisely we cannot be particularly confident in any promises from this Government and the Premier about
this hotel. Madam President, we are in agreement with
the former Finance Minister Curtis Dickinson when he
stated that the Premier’s deal for Gencom on the hotel
was a “dangerous gamble.” However, the dice have
now been thrown and we can only hope that they come up with a good result.
My last comment on the Fairmont Southampton project is to highlight the reckless way in which the Government has provided a freebie to Gencom with the
condos. Regardless of whatever promises have been or may be made, Gencom is going to build hundreds of condos and sell them for hundreds of millions of dollars
of revenue. They are going to get whatever SDOs [special development orders] they want, and they are going
to build them tax -free, and the people that buy them are
going to have them free from land tax for 10 years. And
there is no guarantee they will even be used for hotel
rooms. And what will the Government get from all of this? No tax revenue, that is for sure.
Meanwhile, Madam President, your local developer, or homeowner who wants to do a little project, maybe add on an apartment for Airbnb, they are going
to be paying more taxes. They are going to have to
jump through all the hoops. Meanwhile, Gencom will be
profiting from building on our protected lands and walking away with hundreds of millions of dollars in revenue.
Madam President, that is not right!
So that took a little while, but I think I have
given a relatively thorough overview of many of the
Government’s initiatives and highlighted exactly why unfortunately we should not have confidence in the
Government’s ability to successfully grow Bermuda’s
economy. Madam President, let us turn now to some of
the budget facts and figures, and what that means for
our country. The most pressing concern is our staggering, humongous, oppressive national debt that is hanging over our heads and the heads of our children . This
was a debt that was incurred almost wholly due to the
actions of successive Progressive Labour Party Governments. In 1998 our debt was $150 million and there
was a $15 million budget surplus. Five years later in
2003 deficit spending had begun, and by 2007 the deficit was $136 million. From 2008 to 2012 annual deficits were well over $200 million per year, and in 2012 the
deficit was $226 million with a net debt of almost $1.5
billion.
From 2012 to 2017 the OBA Government was
able to rein in the def icit spending, reducing it to only
$70 million, which sounds like a large number; but remember, it is less than a third of where it was when the
OBA Government started. And did you know that when
the OBA first became Government, they had to take a
loan jus t to make the payroll for the government workers? Madam President, today that debt is projected by the Government to be $3.14 billion.
On a humorous note, I will note that yesterday
was March 14, also known as Pi Day, after the special
number pi, which is 3.14. Anyway, $3.14 billion— that
is $50,251 per person in Bermuda. What does that
number mean? The median income for Bermudians in
November 2020 was $61,000, not much higher. That
means if everybody worked for a year at the median
income and took all of that money, we would just about
pay the debt and [have] some left over.
Madam President, the amount it costs us to
pay for that debt is $130 million a year just in interest costs, and almost all of that leaves the country. Putting
it another way, that is $130 million extracted from Bermuda residents as taxes that serve no productive use
in our economy. That is an average of $4,099 in taxes
paid per working resident, per year that just leaves the
country to go overseas to pay interest. And while we
are stuc k paying that debt interest, that money is not
available to pave roads, support health care, improve
education or provide any other critical services or resources [for] the people of Bermuda.
Also troubling, Madam President, the population to support these taxes and to support the debt is
decreasing. From 2017 to 2021 deaths increased from
422 per year to 727 per year. Perhaps that was COVID -
19, but at the same time births decreased from 648 per
year to only 494. So while we have not had a census in
a whi le, one thing is clear: The population is not growing and the cost to support our debt per person will only
increase. In general, the Government’s approach to
this problem has been to increase various taxes. And
while many people will see some decrease in payroll
taxes and some businesses too, which we support, government fees will be rising in many areas, and that
will be felt in people’s pockets. Madam President, I
124 15 March 2023 Official Hansard Report

Bermuda Senate have not even mentioned the unfunded pension liabilities, an effective debt for this Govern ment. It is projected that the public sector pension fund will run out of money in 2044. I would suggest that all civil servants
carefully watch this space. It is an area where Govern-ment’s financial mismanagements will hit [all civil servants] hard and very personally.
Madam President, turning to international business, one thing that the Government and the Opposition agree on is the vital importance of international
business to our economy. And we have discussed how IB drives a large chunk of the economy and jobs and
services in other ways, including a big chunk of Government’s tax income. And if my calculations are right,
I think about 23 [per cent] or 24 per cent of the government’s total revenue comes straight from international
business payroll tax.
We also know through consultation with IB and
through numerous statements from executives that the
increased payroll taxes are going to be a drag on IB’s
appetite and ability to hire and pay for talent in Ber-muda. In the new world of remote work and global interconnectedness, every job that IB might hire in Bermuda will be subject to intense scrutiny versus many
other, cheaper jurisdictions. Therefore, Madam Presi-dent, we ask that the Government be careful in how it
approaches this pillar of the economy so that it continues to work for Bermuda for a very long time.
Madam President, speaking of international
business, there are some who view the potential forthcoming Global Minimum Tax as a potential windfall for Bermuda that will solve our country’s revenu e problems. However, should this tax come into play it would be a true poisoned chalice. While it is too soon to know where this will truly end up, there are three main points
to keep in mind. Should this global tax become a reality, we would lose one of o ur critical competitive advantages —tax efficiency. We should not realistically
expect all of the businesses that are here today to re-main.
Also, please note that in some years insurance
companies do not make money, and therefore they
would not pay any tax on profits. Adding to this, the
losses in one year can sometimes carry across multiple
years, meaning that we as a country could not reliably
budget or count on this income. And finally, it is unclear
that all countries will sign onto or implement this Gl obal
Minimum Tax, including the United States. So while we
must watch this space closely and engage carefully, by
no means should we expect this Global Minimum Tax to be a solution to our problems.
Madam President, in addition to the sheer
amount of debt that we have, the other concerning thing
is that this budget makes no concession to reducing the
deficit. The Premier claims that we are on a glide path
to a budget surplus, but we doubt this glide path has a smooth landing. As I laid out earlier, Government has
provided no credible initiatives for serious economic
growth. There is no plan being shown for growing the population. And yet this Government continues with a
deficit budget.
Madam President, we can accept the hard
math that part of reducing our c rushing national debt
will require raising revenues as taxes. But we must also
accept that we have to adjust the other side of the
equation and reduce spending so that it is more focused and effective. This would not be surprising for
any family that has had to struggle with debt. They
would recognise that not only may family members
have to find more work and hustle for more income, but the family also has to tighten its belt, hold onto their car
for a few more years, stop eating out, cancel the vacations and really focus on the most important things. It is
not enjoyable, but it is common sense.
However, this PLP Government seems to be
ignoring that side of the equation. Under the PLP Government since 2017, government spending has risen
every single year s ince 2017 except for one. And 2023
spending will be $119 million more than in 2017, or 13
per cent.
Madam President, about half of this government spending is for employees and consultants. From
2006 to 2012 this category of spending grew 18 per
cent under the Progressive Labour Party. From 2012 to
2017 the One Bermuda Alliance managed to reduce
these expenses by minus 11 per cent. Without, I may add, laying off any workers. From 2012 to 2023, however, those expenses have increased again by 13 per
cent under the Progressive Labour Party, from $491.5
million to $556.6 million.
Since 2017 the Government has seen an increase in both workers and consultants. From 2012 to 2017, under the One Bermuda Alliance, the number of
consultants decreased by minus 57 per cent, from 96
to 41. But since 2017, under the PLP, the number has
increased again to 64, or plus 56 per cent.
Madam President, I know the Premier was
quite adamant that he has decreased the number of people employed by the government. However, I must
admit that I do not have access to the same numbers
as he does because the Budget Book tells a different
story, as I just laid out. In fact, according to Budget
Books the actual number of employees in 2017 was
4,764, while the number budgeted for 2023 is 5,055. I suppose the Government will claim that is because the
budgeted headcounts may not be filled. Madam President, how can the Government claim to take credit for
reducing staff when it is planning to hire even more? And if it is not actually hiring the number of staff in the
Budget Book, where exactly is that money going?

ANNOUNCEMENT BY THE PRESIDENT

SENATE VISITOR
The President: Senator De Couto, while you take your,
take your drink of water, I would just like to acknowledge the presence of the Honour able N. H.


Bermuda Senate Cole Simons, JP, MP, Opposition Leader and Shadow
Minister of Finance, who is in the gallery.
Welcome to you, sir.
Do continue, Senator De Couto.

[Budget Debate continuing]

Thank you, Madam President.
Madam President, we have spoken about the
impact of the staff and consultants on the budget. But I
would like to ask why, when we have a Premier who
promotes FinTech and touts innovation at conferences,
I have to go to Works and Engineering and pay a bill in
person? Or mail a cheque? I do not even have a chequebook anymore, Madam President. Why does
every single government department have a different way to pay? Why do land tax bills not come by email?
Madam President, I think you get my point. And certainly every resident of this Island who has had to deal
with government at the retail level knows what I am try-ing to say.
There is a massive opportunity for Government
to make it easier for people on this Island to pay their bills, get their information and interact with the government services. And this would make government more
efficient and cost -effective. I do not blame the civil service. We know that many departments have made their
own individual initiatives to create innovative services.
But where is the direction from the top down and the
resources so that government services can operate like it is 2023?
We have heard about PATI fees proposed by
the Government, and we have heard about the alleged $300,000 cost to field a query. Those costs are not issues with PATI; they are issues with how government works and are further indicators of the needs to mod-ernise and improve government processes.
Madam President, as another example of Government inefficiency take this heav y Budget Book sitting in front of me now. As you know, we have specifi-cally requested the information contained in this book
to be provided in a modern, digital format like a spreadsheet. But the Premier has explicitly directed for us not to be provided that information. I cannot fathom it. The
Government has the information in a spreadsheet. The
civil servants running the briefs have the information;
they provided it, after all. But we are denied that information.
Madam President, this is an incredibly ri diculous way of operating in 2023. If someone in a modern office job was to receive information this way, they
would not even bother to look at it. In my view, the
Premier should be embarrassed! And I have to wonder:
What is he worried about that is contai ned in this
Budget Book that is the people’s business? But do not
worry, Madam President. I have acquired a good pencil
sharpener, an automatic one I might add. I have changed the batteries in my calculator. And I have ap-plied orange tabs to all of the rel evant sections of the
book. We will find out what is going on in this budget.
Madam President, as another example I noted
that the InnoFund guarantee seems to have gone
away, and I understand that there is a court case with
Government. It is hard to understand how innovators
are going to be attracted to work with this Government
when it allegedly cannot seem to honour its agreements with them.
My final example of efficiency and value is the
Government’s takeover of the municipalities. Take the
City of Ha milton. By all accounts, the city works well.
The roads are paved, the streetlights work, the trash
gets picked up and so forth. Now the Government is
going to cut the revenue the City of Hamilton receives
from parking tickets due to administrative costs. That is fair enough on the face of it. But then we learn that the
corporation has in fact been trying to work with the Government since 2017 to streamline the process and find
alternative and more efficient ways for the fines to be
collected, including off ering to pay to help collect the
fines. However, Government has ignored them. This is
yet another example where there are obvious ways to
become more efficient, but the Government for some
inexplicable reason refuses to make improvements.
Madam President , what possible value does it
bring to the people of Bermuda for the Government to take over the municipalities? How will that grow the
economy, improve education or make health care better? It will not, and it is a waste of the taxpayers’ money.
If anythi ng, the Government should learn some lessons
in administration from the city and get to work boosting
the economy and tourism for the benefit of Somerset
and St. George’s.
Madam President, we remain very concerned
about the financial situation of the hosp ital. The Government provides a guarantee of $785 million to Paget
Health Services. This is the largest government guarantee by a factor of 12. This guarantee is used to support the debt financing of, and regular payments to, the
public/private partnership put in place by the PLP Government in 2010 to build the hospital. The Government currently pays Paget Health Care Services fees for this
debt and for maintenance, and will be doing so until 2044 —twenty -one more years. In 2022 this annual fee
was $28.3 mil lion. And unlike the airport, this fee does
not go away if the hospital has more revenue or sees more patients.
Madam President, in 2018 the Government
changed the hospital funding model to a flat grant of $322 million per year. However, in the Premier’s words,
he is saddened that the Government has never fully
honoured that commitment. Madam President, we
should all be sad that this Government does not have
enough money to pay the hospital what it needs. In fact,
the hospital has been operating on an overdraft. It boggles my mind that this vital grant was not paid in full
126 15 March 2023 Official Hansard Report

Bermuda Senate each year, and I really cannot understand it. I also cannot understand why the hospital, one of Government’s
biggest budget items, has not even provided audited
accounts since 2018. Thes e are further, concrete examples of how the Government’s financial mismanagement negatively impacts the vital services that Bermuda and its people rely upon daily.
Madam President, I think I have provided a relatively comprehensive overview of the many is sues
with this Government’s budget and its leadership and
management of our country’s finances. There is more to say, but I am conscious of time. And it is fair to ask,
What would the OBA do?
First of all, Madam President, the One Bermuda Alliance is comm itted to our vision of a prosperous future for all Bermudians with ample economic opportunities, accessible health care, world- class education, a safe and strong community and a healthy environment. And we remain guided by our values of inclusion; we work for and welcome all Bermudians. I think
that is a particularly important point given the state-ments by Government Ministers last week.
Integrity —we prize the public’s trust by being
fair and transparent in all dealings and leading by ex-ample. I would cont rast that to the examples of Government obfuscation I spoke about earlier. Financial responsibility for social benefit —we would prudently
manage the public’s funds to address social issues and
create opportunity.
Madam President, we would focus on high- impact initiatives with quality partners that are likely to succeed to help turn this country around. We would not
be distracted by vanity projects and power plays such
as pursuing independence and fighting with the munic-ipalities. We would avoid meddling in and competing
with the private sector by trying to pick winners. In-stead, we would create fair and transparent conditions
to attract private investment in areas that are most likely
to grow our economy in a meaningful way —tourism, international business a nd FinTech, where it makes
sense and the operators are high quality.
Madam President, we would tackle the country’s debt by focusing government expenditures on the
most important areas for our people and carefully con-trolling our costs and the size of the government to provide impactful and efficient services to the country.
Madam President, we would follow through on the vital
problem of growing Bermuda’s population. As the Government said in [September] , and I quote, “It is predicted that Bermuda’s current working population will
be unable to support the local economy in years to
come.” We would work to grow the working population
by the 8,400 people suggested by the Government, or
some people suggest 10,000, by making Bermuda an
attractive place for Bermudians to return to and welcoming overseas talent where it is in the economic in-terests of Bermuda and Bermudians. In its short time as Government, the One Bermuda Alliance assembled a track record of several suc-cessful projects. Not everything was perfect, but in balance, investment was increased, the economy was improved and government spending was brought under control. But ultimately, Madam President, it is not really
about the money, but the jobs. Those are just the tools
that we will use to make Ber muda a place where we
can all live with dignity, in safety and in a strong com-munity. That is our goal, Madam President.
To conclude, I am reminded of two quotes that
I believe apply to this Government’s budget. The first
quote is from Ernest Hemingway’s book, The Sun Also
Rises . And in the answer to one character’s question of
how did he go bankrupt, the answer, Madam President,
is “Two ways. Gradually, then suddenly.” When the
consequences arrive for the PLP Government’s inac-tion, they will arrive very s uddenly. And it will be too late
for us.
Madam President, the other quote I had in
mind is one that I was not able to properly attribute but
which will be familiar. The definition of insanity is doing
the same thing over and over and expecting different
results .
This Government’s budget is the latest example of its inability to face reality, learn from mistakes and
do better for Bermuda. The Government and its leader-ship have shown it is unable to change how it operates.
In my opinion, Madam President, and that of a rapidly
increasing fraction of the population, the only way for
us to get a different result is to change the Government.
Thank you, Madam President.
[Desk thumping]

The President: Thank you, Senator De Couto.
Senators, it is now 20 [minutes] past [noon] .
Does anyone have a short presentation of 10
minutes? Because I will allow the person . . .
Senator Wight, you have the floor.

Sen. John Wight: Thank you, Madam President.
I read this year’s budget in detail and intend to
offer my balanced views on it, perhaps not as rosy as
Senator Hodgson’s, but perhaps not as dire as Senator De Couto’s.

[Laughter]

Sen. John Wight: Ministers of Finance over many
years in Bermuda have been challenged to present a budget t hat provides the many stakeholders and interested parties in Bermuda’s forecasted cash flows a sense of optimism. The upcoming 2023/24 year is no
exception. And this situation is not unique to Bermuda.
Governments globally are faced with similar issues. We
have had a succession of Finance Ministers who have
forecasted a balanced government budget in the folBermuda Senate lowing three years. We have yet to achieve this milestone, and I am very hopeful that the Finance Minister’s
forecast of a balanced budget for Bermuda wi ll be realised in 2024/25 as he has declared.
It is so very important that the large government debt of approximately $7 billion, including unfunded pension and health liabilities, begins to start to
be paid down. Bermuda so desperately needs the $130
million of annual interest on our debt to be prioritised
and reduced so that these funds can be allocated to health insurance for the uninsured and underinsured, to strengthening our public education system so that
our youth can achieve their career goals and to elderly
care for our increasingly ageing population.
Madam President, in analysing Bermuda’s current financial situation, I view two separate but related
buckets of taxpayers. The first is international busi-ness —i.e., those businesses domiciled and operating
out of Bermuda with customers largely or entirely outside of Bermuda. Clearly, international business (or IB
as we refer to it) continues to grow and thrive and is hugely the driving force behind our economy. This is
good news, and I give the Bermuda Monetary Authority
the greatest praise in creating and maintaining the regulatory framework where insurance and reinsurance companies in particular, but all financial institutions
governed by them, want to call Bermuda their home.
Setting aside future risks and uncertainties, such as the Global Minimum Tax issue, which was referenced in
the budget, I am confident that this sector will continue to go from strength to strength.
If the first bucket of taxpayers, Madam President, is international business, the second bucket is local business —retail, hospitality and other businesses
operating in Bermuda with Bermuda customers. I am
less confident about the fortunes of future success for those businesses. In essence, their operating costs are increasing, but their revenues are not, at least not at
the same pace. Madam President, there are generally
considered to be three ways to improve a jurisdiction’s
finances. Number one is to increase revenues by increasing fees, for example to increase the rate of payroll taxes, which was attempted about 15 years ago unsuccessfully as it resulted in jobs leaving Bermuda and
going onshore.
I am pleased to see in the 2023/24 budget that
this is not the case for employers. Although we will ob-serve over the coming year whether those employees
in higher tax brackets will be facing more out -of-pocket
payroll taxes often paid for by their employer [and] will
cause jobs in Bermuda to again go onshore.
Madam President, if increasing revenues by increasing fees is the first of thr ee ways to improve our
finances, then decreasing expenses is the second. Parties on both sides of the aisle have over many years
been reluctant to address this. Redundancy of jobs in the civil services, particularly in a small community such
as ours, is di stasteful. And in addition, there are not enough open positions in the private sector to accom-modate the transfer of these jobs from the public to private sector if that did happen.
And last, Madam President, if increasing government fees is not a good option, nor is reducing gov-ernment expenses through civil services downsizing,
then we are left with one alternative: Generate more
economic activity by having more people in Bermuda
paying into our tax system and using products produced by Bermuda businesses and services offered by
Bermuda businesses and proprietors. This has often been a contentious issue in our community for whichever party is in power.
I was very pleased to see the Budget Statement reference the need for more people in Bermuda.
And I applaud the Minister of Economy and Labour for
having said this publicly many times. What is missing in my view, although touched upon in the Budget Statement, was the economic recovery plan which we are
told is forthcoming. What is the gameplan for attractin g
more people to Bermuda who will benefit local busi-nesses by buying their products and using their services?
These are my high- level comments on the
budget, Madam President. I will just briefly now comment on some of the other items that were noteworthy
to me in the budget.
In reviewing the larger ministries in particular, I
was surprised to see the number of employees going
up, not down, thereby increasing the cost of government. For example, the Department of Education, Head
17, is budgeting in the 2023/24 year to increase the
number of full -time staff by 36, from 1,034 to 1,070. The
Department of Health is looking to add five new staff.
Not a large number, but nonetheless we are increasing
not decreasing the cost of government in this regard.
And while I highlighted Education and Health, which
are our two largest Ministries, I was also surprised at the expenditure increases for some of the smaller
heads such as Marine and Ports, which is going up
year-on-year by $2.3 million, or 12 per cent.
On the rev enue side of the equation, I was curious, Madam President, to see some of the assumptions for the coming year. In the Office of the Tax Commissioner, Head 38, I note that Government is budget-ing for additional receipts year -over-year of $59 million,
or 13 per cent. This seemed aggressive to me in light
of the rate decreases that the Minister of Finance had presented. And while on the issue of the Office of the Tax Commissioner, Head 38, we know that tax collection has always been a thorny issue for Bermuda. And
while the majority of businesses and individuals pay
their taxes on time, we also know that many do not.
The first department objective of the Office of
the Tax Commissioner listed in the Estimates of Revenue and Expenditure for the year 2023/24 was to “administer the collection of taxes and stamp duties in ac-cordance with tax legislation.” This makes perfect
sense; there is no point in setting tax rules if we do not
128 15 March 2023 Official Hansard Report
B ermuda Senate ensure that the taxes are actually collected. Yet when
reviewing the performance measures for the depart-ment, the performance measure for reducing taxes owed to the government has now been discontinued for the 2023/24 year. This I do not understand.
In summary, Madam President, I recognise
that these are challenging times for Bermuda and for
virtually every government around the globe. There is always a delicate balance for governments to budget expenditures, which they have 100 per cent control over, versus the uncertainty of the revenues, which they anticipate they have forecasted appropriately.
Madam President, we need as a matter of some urgency for the Government to balance the budget and start to pay down, not increase, Bermuda’s debt. I, along with every other Bermudian and interested stake-holder will watch closer as the 2023/24 year unfolds.
Thank you, Madam President.
The President: Thank you, Senator John Wight.
Senators, it is that time now. It is 12:32. So we
will now break for lunch until 2:00.
Senate stands adjourned until 2:00. Thank
you.
Proceedings suspended at 12:32 pm
Proceedings resumed at 2:00 pm
[
Sen. the Hon. Joan E. Dillas -Wright, President, presiding]
The President: Good afternoon, Senators, and the listening audience.
The Senate is resuming the debate on the
2023/24 Estimates of Revenue and Expenditure with the second reading of the Appropriation Act 2023. In the debate this morning we had three Senators who re-sponded. The floor is now open for any Senator to speak on this debate.
Senator Robin Tucker, you have the floor.
GENERAL ECONOMIC D EBATE
BASED ON GOVERNMENT’S 2023/24
BUDGET STATEMENT
[
Continuation thereof]
Sen. Robin Tucker: Thank you, Madam President.
Good afternoon to my Senate colleagues and
to the listening audience. Madam President, the Gov-ernment’s Budget Statement mentions that amidst the very real hardships that our people are experiencing, there is cause for hope. I generally agree with that statement, but will say that it is challenging to be opti-mistic about Bermuda’s future when the Island’s debts
continue to be outpaced by its revenues, where the cost of living has inflated to the point where increasing numbers of people, even residents considered in the middle class, are challenged or unable to make ends meet, when the population is ageing and we have an inade-quate working population needed to contribute to future benefits and services.
Madam President, overall, I think the Budget
offers some sparks for optimism. For example, additional funding being set aside for mental health ser-vices, the reintroduction of the public health scholar-ship, shifting the tax burden to make sure that it is more evenly spread so that everybody contributes, to not
have an increase in payroll tax payments for employers [and] self-employed farmers and fishermen will have a
zero payroll tax obligation. But I ask about what happens to the other self -employed persons and why
hasn’t [this] benefit been extended to them so that they
can also get some additional relief?
Two other especially noteworthy items that are
receiving support from the Government are funding for independent living coordinators needed to support young people ageing out of care of the Director of Child and Family Services, and the other highlight relates to
the Opposition’s call for the reintroduction of water and
air quality testing which has seen about a $260,000- orso grant restored for air quality testing, which is very
good news, particularly for the Pembroke residents that are being affected by BELCO emissions.
Madam President, we know that the Island’s finances are not in great shape. One of the Island’s most
important revenue generating sectors (which, inci-dentally, is only one of two, being international busi-ness and tourism), is international business [IB], which
has contributed more than $2 billion to Bermuda’s economy through such things as paying taxes, rent and
so on, and it employs upward of 4,600 people in Bermuda. This sector has provided about $14 million in support to our charities and has made other significant investment in Bermuda. So it is somewhat disappoint-ing that greater attempts are not being made to further
incentivise this sector. IB could, at any time leave to
another jurisdiction. And if it did leave, what a devastat-ing effect it would have on Bermuda and our economy.
The local media referenced a recent report
from PwC Bermuda which stated that CEOs globally and in Bermuda are re-evaluating the operating models
and reducing costs. They are seeing a level of pessi-mism among CEOs not seen in decades. So, with this report in the local media, no high tide lasts forever. And
I do hope that when creating this budget that the Gov-ernment was paying attention.
Madam President, we should be incentivising
international business and other job makers who want to do business here. Increasing the cost of work permits by 5 per cent is, in my opinion, a disincentive. On top of everything else, it is an added cost to doing business in one of the most expensive places in the world. With one hand the Government wants to attract more job makers

B ermuda Senate to do more business in Bermuda to bring in more workers to help increase our working population, and then
on the other hand, the Government is increasing the cost if they do it. While I am aware of the recent an-nouncement by the Minister of Economy and Labour that improvements to work permit processes are starting to be realised, a 2021 announcement about digitising the application process to help improve work permit efficiencies still has not become operational .
Turning attention to a few other 2023/24
budget priorities: The cost of living, Madam President. Food prices continue to increase and are, as we know,
unsustainable. Food price inflation is currently at
10.4 per cent and the Government says it is beginning
to abate. What does that 10.4 per cent mean in practical terms? It means that a $100.00 bag of groceries
purchased last year will now cost $110.40 this year. A recent world economic report suggests that the impact
of the cost -of-living crisis tops the list of the world’s
most severe threats over the next two years.
So, while it is good that the Government reports that the food price inflation is starting to fall, and
while the Government is, to their credit, providing some
support for families in the form of payroll tax relief, it is
hoped that the 71 per cent of people who were reported
as going without or are buying less, as was reported in a recent narrative research study finding, and everyone who cannot afford in many cases healthy foods or even essentials will reap benefits speedily. While every little
bit helps, this year’s payroll tax relief really does kick
the proverbial can down the road. It provides short -term
assistance, but what is the long- term plan for reducing
the cost of living, Madam President?
Madam President, I have already spoken
about the need to have more people living and working
on the Island, as the increased working population will
share the tax and health burdens which will help bolster government’s coffers. The spreading costs, such as health care and others, across a greater pool of people which the sheer volume of the spread should help lower
the cost, but we must have more people working and
contributing. There have already been a couple of com-mittees formed to discuss comprehensive immigration reform. Senate Leader, Ben Smith, was a member of a bipartisan group a couple of years ago. Unfortunately, not a whole lot, in terms of being able to advance comprehensive immigration reform, has been realised.
The 2023[/24] budget report warns that if we
are unable to grow, that is, if the Government is unable to grow our working population instead of further reduc-tions in taxes, like what was afforded in the budget this year . . . sorry, excuse me. May I just read that part
again?
The President: Please do.
Sen. Robin Tucker: “[I]f we are unable to grow our
working population . . . instead of further reductions in
taxes as we are able to deliver in this Budget due to our economy growing and our working population expand-ing, taxes in the future will increase . . . an increase in
taxes will mean an increase in the cost of living in Ber-muda . . . .”
So, Madam President, with that warning in the
Government’s Budget [Statement] I would ask what is
the Government waiting for? We need to take some
speedy steps to address this issue of getting more peo-ple in this country. Madam President, not only do we
need to bring more people into the Island to work, but we must find ways and create opportunities to entice young Bermudians who want to return home. They
need a reason to return. What does the Government
plan to do to entice them to return?
At this point, Madam President, as no one is
tracking emigration, how do we know how many Ber-mudians have left, that we hope will return one day? In addition to trying to get Bermudians to return, as we
know, we must welcome guest workers. Guest workers
also share in those costs that I mentioned earlier in terms of health care, tax burdens, they will rent [our] properties and eat in our restaurants and so on. They
will contribute to the economic resources needed desperat ely in this country. An important part of enticing job
makers and welcoming guest workers to our shores is
improving our work permit and other related processes that currently frustrate the ability to bring in human re-sources as needed to work in Bermuda.
Due in part to limitations resulting from the pandemic some businesses have already become accus-tomed to outsourcing work. Again, a narrative research study reported in January 2023, that 19 per cent of
businesses had done more outsourcing to other juris-dictions since the start of COVID -19, and 35 per cent of
those businesses said that they would continue to outsource to other jurisdictions. If that trend were to continue, Madam President, I think we will find ourselves in some really big trouble.
Madam President, Bermuda is not the only
country that recognises the need to boost the working
population. Other countries around the world are experiencing a decline in their working populations and an-ticipate a decline, and have already begun preparing for it. T herefore, in the future, and even presently, we
can find ourselves in a more difficult global competition for resources as countries have already begun taking
steps to address this issue. An example would be the
Isle of Man.
The [Bermuda] budget report indicates that
there were 402 total jobs filled in 2022, which the majority of, as you know, came from international busi-ness. The Government’s 2022 Position Paper on Addressing the Challenge of an Ageing Population in Bermuda stated that the Government will work to develop
a strategy to increase the working population by at least 8,418 individuals over the next five years. Madam Pres-ident, I am doubtful that this will happen within that
130 15 March 2023 Official Hansard Report

Bermuda Senate timeframe. However, if this lofty goal can be accomplished within that t ime, the Government must act
swiftly because time is working against us.
Relatedly, Madam President, we all know that
an ageing population without younger workers to replace and provide support for the elders places a
greater financial demand on the existi ng workforce, and
on +-the community and on its resources. It also places
a strain on pensions, health care, homecare services,
care homes, et cetera.
Madam President, the Department of Financial
Assistance 2021/22 annual report states that there are
1,036 seniors and pensioners receiving financial assistance. And we know that the numbers of people who
will become seniors is rapidly increasing. Where, in this
budget, is the investment in these services for seniors
that will equal what is needed to support them today,
and, of course, the people who will become seniors in
the inevitable future?
Madam President, this budget, in my opinion,
does not go far enough to support our seniors. The Ministry of Social Development and Seniors has, I will say,
done some good work in this area. And Minister Tinee
Furbert (if she is listening) I want to give her props because she has done some good work. But there are still
too many seniors struggling to eat, to pay for health
care and medicines and generally to survive day to day.
Our seniors have laid the foundation that we pre- seniors currently enjoy. So, as a country, we should be
making greater investments to ensure that their needs
are met and that they are appropriately cared for. Leav-ing seniors to rely on pensions and financial assistance
funds is not enough when we should have additional
and wider support for them.
Madam President, I will end with this: In the
opening statement in the budget, the Government said
that there was cause for hope. Wikipedia defines hope as “an optimistic state of mind that is based on an expectation of positive outcomes with respect to events and circumstances in one's life or the world at large.”
Madam President, also Proverbs 13:12 in the Bible
says “Hope deferred makes the heart sick . . .” For
those who may not know, the Proverb means that when expectations are delayed for a long time disappoint-ment, disillusionment, and a loss of hope, or hopelessness will be the outcome.
Madam President, the Island is $3 billion in
debt. And, together with all of the guarantees and un-funded pension liabilities, the Island’s debt is likely
closer to just over $7 billion. One report that I read indi-cated that in real terms that would be about $250,000
owed by each working person.
As I said, Madam Presi dent, there are some
good things in this budget. And the fact that the Gov-ernment feels that there is cause for hope, Madam
President, I would just say that hope is not a plan. Ber-muda needs a proactive, forward- thinking plan and a
Government that is commi tted to executing on that plan
to see us through the current and future economic and social difficulty. Because if the Government is wrong,
and there is no cause for hope, then hopelessness in
the community results, despair and even more difficult
times ar e not far behind.
In closing, Madam President, several times in
the budget the Government acknowledged that more
must be done. So while certain members of the Government may feel like they do not need the Opposition,
I would say I disagree. As our economic challenges run
so deep, and no one group has all the answers, perhaps with real collaboration between the Government and the Opposition workable solutions can be arrived
at and Bermuda can benefit outside of the political fray
which is not beneficial to any of us.
Thank you, Madam President.

The President: Thank you, Senator Robin Tucker.
Would any other Senator care to speak at this
time?
Senator Lindsay Simmons, you have the floor.
Sen. Lindsay K. Simmons: Thank you, Madam President.
Madam President, I looked back at our 2017
PLP Platform, a Vision for a Better and Fairer Bermuda. Madam President, this platform slogan continues to
resonate with me. The vision of the Progressive Labour
Party is for all of us to shine through by putting our people first. This Government continues to deliver on their
promises to make Bermuda a better place.
Madam President, I am a proud member of the
Progressive Labour Party and, as they say , a member
of the Burt Administration. Each member of the Government works tirelessly to ensure that our people are
heard and listened to. We see this , week in and week
out, as our members continue to engage with the public. This is evident through our canvassing, phone calls and clinics, just to name a few.
Madam President, the Cabinet and the Senators, as you know, sit at the pleasure of the Premier.
The Premier has done an amazing job to select the
members of our team to lead the charge in doing the
Government’s business. I would like to take a moment
to thank my Progressive Labour colleagues, MP Renee
Ming, Junior Minister Kim Swan, MP Lovitta Foggo, MP Derrick Burgess, Minister Tinee Furbert, Minister
Wayne Furbert, MP Anthony Richardson, Minister
Vance Campbell, MP Christopher Famous, [Minister]
Diallo Rabain, MP Wayne Caines, Minister Walter Roban, Minister Michael Weeks, Minister Jason Hayward, the Premier, David Burt, MP Jache Adams, MP
Curtis Dickinson, MP Lawrence Scott, MP Ianthia Simmons -Wade, MP Neville Tyrrell, [Minister] David Burch,
MP Dennis Lister, III, MP Zane DeSilva, MP Jason
Wade, MP Crystal Caesar, MP Scott Simmons, MP
Jamahl Simmons, Minister Kim Wilson, Minister Kathy
Lynn Simmons, Minister Owen Darrell, Senator Arianna Hodgson, Senator Emilygail Dill, and Senator
Leslie Robi nson. Each one of my colleagues works


Bermuda Senate hard to make sure Bermuda is a better place and this
budget is clear.
But, Madam President, I would like to take a
moment to clear the air. As per normal, the Opposition
did not listen to the motion to adjourn where a Member who sits in another place spoke. The Opposition Senator earlier this morning spoke about this Member and
also took to social media and took a snippet of what he
said, and I quote: “I don’t want your vote.” Now, if you
just heard that you would not understand why a sitting
MP would say such a thing. But, Madam President, I had to explain to people what the Minister actually said
in another place. The OBA tries to paint a narrative.
They took five words and ran with them.
The Opposition in thi s place and in another
place, are being lazy and are deliberately taking things
out of context. They continue to mislead the public —

Imputing improper motives, Madam President.

Sen. Lindsay K. Simmons: Madam President, that is
what was said.
Madam President, they continue to mislead the
public. I am here to stand shoulder to shoulder with my
colleague. He was speaking his truth. And many of us have experienced the same treatment.
Madam President, I would like to take a few
minutes to highlight what this Progressi ve Labour Party
Government continues to do for our people of Bermuda and what the Opposition failed to do when they were in
power. Madam President, this Government has reduced payroll taxes for working families to the lowest level in history. I will repeat : This Government has lowered the taxes for working families in Bermuda, saving
the average family $2,000 per year in payroll taxes.
This Government is lowering taxes for 86 per cent —
you heard it right, 86 per cent —of Bermudian workers.
That means our teac hers, fire fighters, cashiers and,
quite frankly, most of us, Madam President . The majority of Bermudians are the 86 per cent who make under
$132,000 per year.
Madam President, as I reflect on the past two
years and the amount of support and relief that has been provided for our people at a time when the cost of living has gone up. Madam President, no business in
Bermuda will pay any more in employer payroll taxes. But, Madam President, when the OBA were in Govern-ment they increased payroll taxes to the hi ghest level
in Bermuda’s history. This Government continues to find ways to support the workers of Bermuda. We are
at a crucial time when our people are trying to make ends meet, and this Government continues to take
steps to allow our workers to feel the savings in their
pockets.
The COVID -19 pandemic was a once- in-a-lifetime pandemic that we will never see again. But, this
Government is still growing our economy. I am proud that we have found ways to lower taxes such as reducing customs duty on essential food items. This custom
duty reduces the duty rate from 5 per cent to zero per
cent for such items, as eggs, bread, potatoes, cauliflower, broccoli, oranges and apples to name a few. We
have also made amendments to the sugar tax. These savings are necessary for everyone in Bermuda.
Madam President, this Government will also be
repaying $50 million of debt this year that will save us $2 million annually in debt service costs. This is a huge
savings that Bermuda needs. So I thank the PLP Government.
Madam President, this Government has a declining deficit and is on track to have a balanced budget
in 2024/25. This is unlike the OBA who doubled our national debt when they were in Government. Our people
are still feeling the effect of furlough days. The OBA h as
had the two largest deficits in Bermuda. This speaks
volumes for their Government. They were only in power
for five years and put Bermuda in a huge deficit.
Madam President, let’s not talk about the millions of dollars that we continue to pay because o f bad
deals made by the OBA —

I will continue.
—to the tune of $291.6 million. They were Morgan’s Point, Caroline Bay, Skyport minimum revenue
guarantee, and the WEDCO at Cross [Island] .
Madam President, last year’s fiscal year , after
a clean audit , the Government deficit came in at $66
million. Madam President, to put that into context, in
2013/14, which was the OBA’s first full year in Government , the actual deficit was $299.4 million. The following three full years they were in Government, the OBA’s
deficit was $265.3 million in 2014/15; $160.6 mill ion in
2015/16; and $182.1 million in 2016/17.
Madam President, this means while this Government was still grappling with a once- in-a-lifetime
pandemic, still paying unemployment benefits, still pay-ing the mortgage guarantee, still paying Skyport, the
fact remains that this Government still, and continues
to perform better than the OBA ever did.
Madam President, the Premier, [and] a Member who sits in another place that represents [constituency] 19 and their team worked day in and day out to
132 15 March 2023 Official Hansard Report
B ermuda Senate ensure a budget that will provide a better and fairer Bermuda. I also had the opportunity to stand with my col-leagues as the Premier announced that many Bermu-dians will be able to afford to purchase their first home through the mortgage guarantee programme. In phase 1 you have to be 40 and under to apply for this. However, so many other Bermudians will be able to apply for such opportunities. I was excited at the buzz and many Bermudians reached out to me about the mort-gage guarantee programme.
Madam President, as you may be aware, we
have moved to phase 2 of the mortgage guarantee programme. This will allow people with no age restrictions
and will allow public officers the ability to transfer their mortgages over. This programme will see first -time
homeowners that will be able to own a piece of the rock. Madam President, how exciting is this programme?
Madam President, I am honoured to work as
the Junior Minister of Social Development and Seniors under Minister Tinee Furbert. Minister Furbert is ex-tremely passionate about our most vulnerable popula-tion in Bermuda which includes children, persons with disabilities, and seniors. Minister Furbert continues to
ensure improvements are made within our community
that will impact the lives of our most vulnerable popula-tion to guarantee they are empowered. She represents the voice of the people in our community who are not able to speak for themselves. She is a true advocate for all.
Madam President, today I stand excited to talk
about something that has been a long time coming, and something (I will declare my interest as a foster parent )
that happened on March 2, 2023. The Ministry of Social
Development and Seniors made history by opening the first independent living programme for children ageing
out of the system. This programme is exactly what was
needed [for] what I would call our children. Yes, Madam President, our children, Bermuda’s children.
None of these children asked to be placed in
the system. Any of us could find ourselves or someone
we know in a predicament and have our very own children placed in the system. The foster care system is designed to place children in safe hands from birth to 18 years old. Many of these children have grown up in the foster care system and it might not always be fea-sible for them to stay with their foster families or to go
back to their natural families. Some of these children
age out of group homes. This programme will give our children a safety net so that between the ages of 18 and 24 they will have a place to stay for a maximum of two years. To be honest, Madam President, I could not
fend for myself at 18.
This programme empowers these individuals
to provide security and safety as the residence will be staffed 24 hours per day for security. This programme allows our young people to gain valuable tools in their toolboxes so that they can be independent and suc-cessful members of our community. Unfortunately, Madam President, statistics
show that young adults who age out of the system, compared to the general population, experience a
higher level of homelessness, unemployment, abusive
relationships, mental and physical health problems. But this Government is confident that with the independent
living programme our adults who have aged out of the
system will get a hand up instead of a hand out.
Madam President, our young people will have
life skill opportunities to set them on the right path. Money management will be one of the life skill oppor-tunities offered. This is important so that they know the
value of a true dollar and how to budget and save their
money. Another life skill opportunity is education plan-ning and job placement. I know that many of our young people no longer have to worry about where they live. They will have a bed and a place to call their own. For our young people they know they now have the opportunity to age out with piece of mind.
Madam President, this promise that the Progressive Labour Party Government delivered will give
our young people the vision for a better and fairer Ber-muda. Madam President, I would like to inform my colleagues and members of the public about some other
initiatives that are in this Ministry. Launch of the Joint UN Development Programme in June 2022 entitled Building Back Equal Through [Innovative] Financing for Gender Equality and Women’s Empowerment which is being implemented in Bermuda with the assistance of
UN Women and the UN Development Programme, and
funded by the UN Joint Sustainable Development
Fund. This programme is a first of a kind for Bermuda which invests $1 million between two countries, Bermuda and the Bahamas. This programme will provide opportunity for women and persons with disabilities and
the youth.
Madam President, the first Senior’s Talk and
Tea was held on the 26
th of August 2022. That was a
success. The event had approximately 100 seniors in
attendance and provided an opportunity for seniors to hear what the Ministry of Social Development does. It
also provided a platform for seniors to ask questions and also raise their concerns. This PLP Government listened.
Madam President, most recently on the 6
th and
7th of March 2023, Minister Furbert attended the United
Nations 67th Session of the Commission on the Status
of Women and it was held at the United Nations Head-quarters in New York. This provided Minister Furbert
the opportunity to become part of the UK delegation
[with] Dame Barbara Woodward, Permanent Repre-sentative and Ambassador of the United Kingdom [to]
the United Nations. Ms. Diana Dalton, Head of Gender
and Equalities Department at the UK Foreign Common-wealth and Development Office; and Mrs. Valerie Rob-inson- James, Permanent Secretary to the Ministry of
Social Development and Seniors were also in attendance.


Bermuda Senate Madam President, Minister Furbert is dedicated to ensuring that our most vulnerable population
has a voice and are provided with the opportunities that
will help to improve their lives to make Bermuda a fairer and better place.
Madam President, I will end on this note. The
Leader of the Opposition included in his Reply that he
would reintroduce a TA fee. But a Member who sits in
another place who represents constituency 10 said on
that very same day that he did not support it. And after three days, the Leader of the Opposition embarrass-ingly retracted that statement. So today I stand in the
Senate and I say , Who is the real leader of the OBA?
Thank you, Madam President.

The President: Thank you, Senator Lindsay Simmons.
Before I move on to another person speaking,
can I just clarify Senator De Couto, you did ask for clar-ification. A point of clarification . . . a point of order I can
rule on that. A point of clarification, a point of information is up to the person speaking, the Senator speaking, to accept it. And in this case she did not. So
that is why we moved on. All right?
Would any other Senator care to speak?
Senator, Vice President of the Senate.
Sen. Kiernan Bell: Thank you, Madam President. And
thank you to the Junior Minister of Finance for her statement on the Budget.
I wanted to make sort of limited comments, if I
could, on the government guar antees. Government
guarantees are a powerful tool that can be used to help
stimulate economic growth and support important projects and provide a measure of stability to businesses and investors. However, it is also important that they be
used judiciously and with caution and avoid creating unnecessary risks and liabilities for the government. And I am concerned in reading the budget and the
Budget Statement that we are over -reliant on this one
lever in the government’s arsenal and without backing
that up w ith future economic growth we are potentially
writing cheques that future generations of Bermudians
simply will not be able to cash.
The Royal Gazette, and I think my fellow Senator mentioned this quote, which came from the Royal Gazette when Arthur Wightman of PwC at the Chamber
of Commerce Budget Breakfast stated that the Island
is burdened with over $3 billion in debt, and if you add
all of the guarantees and the unfunded pension liabili-ties facing the Government that there is a totally poten-tial burden of $7.4 billion. And [this], he said, equates
to almost $250,000 per working person in Bermuda.
And the warning that followed that was that this level of
financial obligation is incomprehensible for the average
person, and yet it needs to be comprehended and addressed. I actually agree with that statement.
In my former life, when I would advise people,
as I often did, who were looking to provide guarant ees for their children to buy a house, one of the first questions I would ask them is, Can you afford to pay this
debt if the guarantee is called? And if the answer to that
question was no, and this was more commercial advice than legal advice, my advice w ould be do not provide
this guarantee. The reason for that is that one of the
key risks with guarantees is that they have the potential
to become an actual liability. And we know this, of
course, in Bermuda because this did happen with the
Morgan’s Point g uarantee.
So, the Government’s position currently is that
it will in very limited circumstances provide guarantees
to non- government entities when such guarantees are
deemed to be in the public interest. And I agree with
this. It is a statement of princi ple that I think is right. But
this is a very over -used tool right now in our current
economic environment, and it is very hard to see an area of our economy ––from health care to tourism, to
stimulating home ownership––where the Government
is not presently supporting or attempting to stimulate
with government guarantees.
The Gaming Commission has been mentioned
by one of my fellow Senators that is backed by a government guarantee. The hospital is backed by a Bermuda Government -backed guarantee and the [Fai rmont] Southampton redevelopment we understand is
to be subject to a $75 million guarantee. None of this is to say that any of those guarantees in principle should
not have been provided or should not be entered into,
but we need to be cognisant that these are real potential obligations.
So, I pause here to go back for a moment to
what Mr. Wightman was highlighting when he came up
with those numbers. And what jumped out at me was
that the Government currently has, with the guarantees
and unfunded pension l iabilities , contingent liabilities
which are more than the Government’s actual liabilities.
[This] is very, very risky. Again, I go back to when you
enter into a guarantee you have to prepare yourself for the fact that you may be called upon to honour it. So
you should not be thinking of that as money that you will never, ever have to come up with. It is important to
manage and mitigate potential risks associated with
contingent liabilities to prevent them from becoming ac-tual liabilities and causing severe financial problems.
I am concerned to understand how we are
planning for this and how we have sufficient reserves
and contingency plans in place to cover for any potential shortfalls. There is $1.3 million in the blue book set aside or budgeted to provi de guarantee management.
Perhaps some of that could be used to publish infor-mation on the guarantees so that we can be satisfied
that we are fully accounting for these off balance- sheet
risks and providing for them in a cautious and transparent way.
So, those were my fundamental thoughts that I
thought I could add on this debate today. Thank you,
Madam President.

134 15 March 2023 Official Hansard Report
B ermuda Senate The President: Thank you, Senator Kiernan Bell, Vice
President.
Would any other Senator care to speak?
Senator Ben Smith, Opposition Leader in the
Senate, you have the floor.
Sen. Ben Smith: Thank you, Madam President, and
good afternoon.
The President: Good afternoon.
Sen. Ben Smith: So, Madam President, I found the
contributions so far today interesting. I am going to start from the beginning when we had the opportunity to lis-ten to the Junior Minister provide us a very similar speech to the one that we heard from the Premier in another place. In that speech there is a significant amount of time and energy talking about the Opposition
as opposed to what is going to be done by this Government.
We just heard from a Senator from the Government side give thanks to 30 people that are on the Government side, plus the Senat ors. With that super -majority, you would think they would be spending their time and energy on how to dig Bermuda out of this signifi-cant hole. Instead, we are continuing to hear the same divisive language that has been given by successive PLP Governments. Madam President, it is interesting that a Member of this Senate would call team members
of mine lazy, considering in the budget debate that we
have had for several years, and I am going to assume that we will see very similar behaviour this year, Gov-ernment Senator read the same brief that was pre-sented in the House of Assembly. But we’re the lazy ones.
So the issue is, in that starting message that
was presented by the Junior Minister she mentioned that in a speech given by a previous PLP Premier laid out hope, 27 years ago. Then laid out specific things that needed to change in the country and that the PLP
Government was going to fix. Madam President, if you
fast forward 27 years to where we stand today, can you say that Bermuda is better off on any of those items that was put in that speech 27 years ago? Because rather than the Government worry about what the Opposition is doing, or complaining about the four and a half years
of the Opposition’s Government, they should focus on
moving forward with the business.
Madam President, the dilemma that we have in
this country is this : We are not bringing enough revenue
in to pay the bills that we have. So we have been run-ning it up on the credit card. And then you have to hope
that someone is going to increase that credit. That is
where we have been over and over again for almost 20 years. And the Government likes to point to the four and
a half years when the Opposition had to continue that same movement. Well, remember, if you are spending more than you are bringing in, when the new Government comes in they can’t turn the tap off imm ediately because even turning the tap off a little bit has issues
like furlough days, which the Junior Minister stated was a problem.
Well, Madam President, Senator Wight talked
about the three different things you can do to try to solve the problem that we are in. So you have got the
fees, you have got reducing your costs, [or] you’ve got
[to] increase your revenue. Madam President, we are
at a time in the world where everybody is trying to do
the same thing. Bermuda has a negative birth rate. We
repeat ourselves over and over again. That is the situ-ation that we are in. And now our citizens are choosing
to opt -out of Bermuda.
I will paint a picture for you. You have a dinner
party. There are 100 people at the dinner party, everybody said they are going to pay a certain amount, but
as the night goes on certain people are leaving. When the bill comes it still has to get paid. Because there are
[fewer] people to pay, the people who are left behind
have to pay more. Negative birth rate and emigration
means that the bad situation that we are in gets worse.
So, we have heard the number 8.5, so 8,000
people have to be brought into the country, maybe
10,000. We have to figure out a way to attract people
from outside of our country here in order for us to help dig out of this hole. But, Madam President, you have to
create an environment that makes people want to come to Bermuda. Remember, we can’t increase the jobs in government in order to get us out of here, because we
are just circulating the money that we are taking from
taxes, and in some cases, then increasing the amount of taxes to pay for the jobs that were created. What you actually have to do is create the environment for oppor-tunity outside of the government. But you are compet-ing with the rest of the world to get that capital, to get
those people to come and create jobs and be part of
the country that we are trying to save.
So, the Minister of Labour has said that he is
willing to ask for suggestions. Well, Madam President, the next thing is that the Oppos ition isn’t willing to help.
The Opposition is not willing to give ideas. But my col-league laid out for you that I sat on that Immigration Reform Committee for close to three years. And very little was actually implemented. So in 2020 the Opposi-tion took the position that the Government has all of the talent, yes? Thirty plus five . . . they should have all of
the ideas; they should know how to dig us out of this hole. Why is it that they need us to give them the ideas to help them? They weren’t taking our ideas when we were giving them our ideas.
So, in three years can you tell us what the Immigration reform has been? And if we are on this slow
process how long is it going to take for us to get to the
8,500 or 10,000 people? Madam President, while you
are filling the bucket, you have to make sure you block
the hole. You have to make sure that you are doing things to make the people who want to be here, stay
here. We already know that our Bermudians are starting to choose to opt -out. But we have to be mindful that

B ermuda Senate the people who have been paying a lot of the high costs
are also looking elsewhere.
The Government would like to talk about the
86 per cent who are going to get the break from payroll
tax, but understand that 86 per cent means that most
of the people in Bermuda are working poor. The cost of
living in Bermuda is so high that most countries in the
world [consider] $136,000 as a lot of money. In Bermuda [$136,000] is not taking you as far as multiple
Senators have laid out, the cost of living being out being out of control.
But you see, Madam President, the problem
that we have here is that sometimes the Government wants to pat themselves on the back for things wi thout
digging a little deeper. So the retail sales are one of the
reasons they are able to speak about how great they are going . . . is that because Bermudians are opting
out, selling their houses and moving to other jurisdictions because they can’t live in their homes? Is that really what we should be celebrating? Because we have
not created an opportunity for young people to come back.
Madam President, when we talk to people in
this country they are not happy with the direction of the country. They are actually not happy with any politician because they need results, not words, not ideas that never get implemented. We see a lot of symptoms in our country and we get upset about it when we hear about it. An example: We have a large portion of hospital beds that are taken up by people who have been
left there. You think to yourself, Wow, that’s a terrible
thing. Why would we have people who are just left in
the hospital, and it’s a big bill for everyone else to pay
in order to keep them there? But, Madam President, if you are a family that has just enough money to survive
and a loved one takes ill or reaches a point where they
need special care, it is impossible for you to figure out a way to take care of them and survive. [This is] n ot a
decision that I believe anyone would take lightly; it’s just the position that we are in as a country. And there are
hardworking Bermudians who are making that choice.
Madam President, there are people who have
really worked hard in this country who are in their senior
years who are choosing on a cold day [in] Bermuda to
sit in their houses with the lights off because they can’t
afford to pay their bill. But the dilemma we are in,
Madam President, is this: Although the Government is
now trying to say that they are going to fix infrastruc-ture, they are going to fix certain things in the country and that is what the budget is and we will celebrate the items that they are able to cover, but to get to a bal-anced budget they are having to cut other things out —
things that are actually necessities. As we struggle, crime goes up. But we haven’t been taking care of our uniformed services. And because we haven’t been tak-ing care of our uniformed services, we will see cuts. And those cuts will have an impact on service, on how long it takes for ambulances to be able to get to a
scene. These are not decisions that are easy to make. But when you have reached the critical point of not paying your bills, you start to make these kinds of deci-sions.
Madam President, there are some areas within
our country that we have continued to leave on the out-side, one of them being the retail sector. Small businesses in Bermuda have been a way for entrepreneurs
to get involved in our country. They are not going to be part of international business. They are not in hospital-ity. But they have a certain skill or they have an idea, a dream that they would like to put in place. And that has been an important part of our count ry’s development.
But, Madam President, all of the breaks that we give,
all of the incentives that we give , we leave retail on the
outside. Instead, the Progressive Labour Party Govern-ment has actually figured out ways to compete with re-tail, understanding that 100 per cent of retail employment is Bermudian. So why are we not giving them the
same breaks that you give to construction, that you give
to hospitality, encouraging them in a way to move them forward, instead of figuring out ways to compete against them which drives them out of the business.
Madam President, can you please tell me who
would want to come to a country with dead retail? We have had people in another place say that retail is dead and then move on. But, Madam President, boarded up
buildings, closed shops, is not an attractive, inviting en-vironment for tourists. And when we are trying to get people to come to Bermuda to bring capital, do they
want to be part of a dead city? The answer is no. And
remember, we are competing with the world for those
jobs. So, earlier I said that you have to make sure that you are blocking the hole in the bucket to stop the water from going out before you figure out how you are going to encourage more people to come in and help us to
pay our bill. Madam President, we make it so difficult.
No one wants to talk about the work permit process, and how long it takes, and how long this has been
a problem. But, Madam President, when you are com-peting against jurisdictions that have done everything
they can to roll out the red carpet while we, on the other
hand, are putting up a big brick wall, how are we sup-posed to compete? It used to be that we were the blue chip jurisdiction and they would just come. Now we have to compete for each of those people we are trying to bring here, which makes getting to that 10,000 number even more difficult. But the divisive rhetoric is not
going to help that. Remember this, the capital is attached to people. And those people can hear the entire speech that happened in the other place , not just the
words that some people want us to hear. And when they are making a decision on whether they want to
come to this jurisdiction to set up business and bring
their family, because that is going to be part of the num-bers that we need, are we falling back into the same category when we had Ministers from the PLP Govern-ment tell those people to take themselves and their nannies and go home? Madam President, that is not
136 15 March 2023 Official Hansard Report
B ermuda Senate how we are going to get people to come here. Just remember, those people still sit in another place.
So, Madam President, when we have this idea
that we are going to have vertical farming and then it disappears because it was not an idea that could work, and we didn’t talk to the farmers who are already having
a hard time selling the leafy greens that they are producing today, and then you are going to add a fish pro-cessing plant that you didn’t talk to the fishermen [about] to find out whether that was something that was actually necessary. Now we get to hear about medi cal
tourism.
Madam President, the last time we heard about
medical tourism we ended up with the acute wing. Peo-ple forget that this is how that project started. And that
is the reason why most people, when they look at it ,
consider why there is so much wasted space, because
it was a tourism project, not a hospital. And we have
just heard Senator Bell talk about those guarantees for
that hospital. Madam President, we can’t go down that path again. We do not have the beds in the hospital. We are not able to get the number of doctors and help
that we need for the hospital. They are having a hard
time paying their bills. And now we are going to talk
about medical tourism in the most expensive place on the planet, and we are going to compete against all the countries that are already doing medical tourism at a significant reduced rate, and they also have sunshine
all year round.
We can’t just make stuff up. It has to be based
in reality on things that we can actually achieve. So it is going to be difficult because the Progressive Labour Party has spent a long time telling people that the for-eigners who are here are bad. That has been part of the language that has happened over years and years.
So, to undo that and talk to their base about that group
of people, well guess what, you are going to have to roll up your sleeves and actually have that difficult conver-sation, because you can’t pin that one on the OBA.
How are you going to get to the 10,000 people
without bringing people from outside the country who are not Bermudian? Talk about it. How are you going to implement it? Nobody needs to give you ideas. Thirty plus five, as I was reminded. Tell me how you are going to do it. Tell the country how you are going to do it. It is uncomfortable. But you cannot invite them in on one
side and then talk badly about them in a speech in another place. That is not inviting; it is not going to work.
Madam President, I would like to touch on tourism which is an important second pillar to the country and something that we have to focus on. There has been, I would say, an Island- wide focus on the Southampton Fairmont project. I will state firstly that the Op-position is in support of the hotel project. It is important that this is put out front so that I do not have Members from the other side say that the OBA is against the hotel
project in Southampton that will be run by Fairmont.
But, Madam President, I do have some comments. It is an interesting thing. If you create a situation and then save people from it, are you a hero? If you
created the problem and then solved it, are you a hero? Because, Madam President, the Fairmont Southamp-ton Hotel was operating and it was operating at a profit. Most hotels when they do refurbishments, they actually do it while the hotel is operating. There are multiple hotels in Bermuda right now that have continued to oper-ate and they have done that while refurbishing. The Hamilton Princess is one of them.
Well, Madam President, guess what happens
when you close a hotel that employs 700 people. You create the kind of leverage that makes the entire country stand still. And that is what happened. The unions
had to bow to that project. We had [fewer] airlines com-ing to Bermuda because the hotel that was attracting major airlift was now closed. The Government had to bail out the business because they closed and did not have the money to pay for their staff redundancies.
But with that leverage you create a project to
build lots and lots of condominiums. The people in Ber-muda want to see the hotel open. That was the jewel of Southampton. It is where I live; it is where I grew up because my father worked at that hotel. Most people in
Bermuda will fondly look back on the Southampton
Princess and what it meant to this country. But Madam President, when a company creates that kind of lever-age and everybody has to bow to them, we have to wonder what exactly are we getting—$450 million for a refurbishment project, not a new build. And now six -
storey condominiums on open space.
I know we will discuss this one further into the
future, but I just want to make sure people understand that this was what was created. And when that happens it creates desperation because we have to get the peo-ple back to work. The taxi drivers are impacted. The
people who worked in that industry were impacted. So
everybody is panicked. We have to get it back open. But when you do that, do you have to give away the farm to get it? Will we ever get value for money?
So, Madam President, I have talked to some
people recently who are talking about this issue that we have in Bermuda of a family who have paid by working and doing everything that has been expected by them, and then they educate their children and pay for them to go away to school. And then those children are say-ing, We are not coming back. There is no opportunity.
There is not only no opportunity, [but also] it is not really an exciting environment to be in anymore. It used to be that Bermuda was the place that people wanted to re-turn to. But those same people are having ageing par-ents who they are having to figure out how to take care of and now they are coming up with, Well, maybe I can’t
retire here. I don’t want to be in the situation that my parents were in, so I have to find a place where the money that I have made here will go further.
Well, Madam President, if more and more of
our population is coming up with “plan B” and “plan B” involves leaving Bermuda behind, this issue that we
have all been discussing today gets worse, not better.

B ermuda Senate So, Madam President, this is what I woul d like
to suggest for us going forward. We need to spend all
of our time and energy focusing on how we can create an environment in Bermuda that encourages oppor-tunity to happen for the growth of the private sector which will then mean more job opportunity , more
chances for entrepreneurs to get involved. That has to be the focus. We know mistakes have been made over the last 27 years which includes the OBA Government when they were in power.

Hear, hear.
Sen. Ben Smith: But it was 27 years, and the PLP
needs to take responsibility for the mistakes that they have made and stop repeating them and focus on how they are going to move this country forward in a way that will make it successful for everybody, not just for
people who vote for them. That cannot be the focus.
This is too important.
Madam President, we are at a critical stage.
And as you look at international news you realise we are not alone in this problem that is across the world
now. So, considering that the Government Senator
thinks that the Opposition is lazy, I am going to ask that
the Government Senators go to their Government MPs and make sure that everybody is working around the clock to fix this problem, because, Madam President, when most people answer the question, Are you better
off today than you were when the PLP Burt Administra-tion took over, the answer is no.
Thank you, Madam President.
[
Desk thumping]
The President: Thank you, Senator Ben Smith, Opposition Leader in the Senate.
Would any other Senator care to speak?
Senator Reverend Dr. Emily Dill, you have the
floor.

Thank you, Madam
President.
My esteemed colleagues have painted a picture of gloom and doom for the economy that capital-ises on challenges that countries all over the globe are
facing due to the impact of the COVID -19 pandemic,
the Ukraine war and the worldwide recession. It is my
belief that this tactic is being employed in an effort to place fear in the hearts of Bermudians, to mislead the voters, and to dupe them into returning the people to the draconian leadership of the OBA, and/or the UBP,
which disenfranchised the majority of Bermuda’s people and operated as an oligarchy.
Madam President, it appears that the Senators
are suffering from selective amnesia. Under the OBA our national debt was doubled. We had the two largest deficits in Bermuda’s history. Under the OBA we were
downgraded by independent rating agencies. Under the OBA the former Finance Minister brashly told our
voters that money does not grow on trees . Under the
OBA there were increased payroll taxes to the highest level in Bermuda’s history.
Despite the bad hand that we have been dealt
as a result of the OBA and a once- in-a-century pandemic, which the last Member who spoke seemed to have forgotten even occurred, we are pleased to say that our economy is growing. Our deficits are declining and our IB sector experienced the strongest growth in 15 years. And we have sustained stable outlooks from independent rating agencies. We are also pleased to
see that our net debt position is now lower than forecast
and we are still on track for a balanced budget in 2024/25.
Some of the budget highlights include sustainable economic growth, five consecutive quarters of GDP growth. The GDP in 2022 is projected to grow between 3.4 per cent to 3.9 per cent, taking it to near pre -
pandemic levels. There will be the repaying of $50 million of debt this year which will save $2 million annually in debt service costs. A declining deficit and we are still on track for a balanced budget. We have had a historic
increase in cruise arrivals that are expected. And our
budget reflects consultative processes for policy deci-sions. And 80 per cent of our Economic Recovery Plan
[ERP] items are on target.
One of the key items that I would like to highlight and celebrate is that any employee earning less
than $132,000 will pay less payroll tax. And that represents 86 per cent of our workers. This is the fourth time that the PLP has reduced payroll taxes since 2017. No business in Bermuda will pay more in employer payroll taxes. And employers [are] to be exempt from payroll tax for employees on maternity and paternity leave. We
have revised the sugar tax to focus on sodas and drinks
with significant sugar, candy and chocolate. And there
will be expanded duty relief for capital upgrades for per-sonal care and the personal fitness sectors. There will also be the elimination of duty for aggregate imports
and school uniforms.
Madam President, the list goes on and on. But
we see that we are moving in the right direction, in spite
of the fact that some of the speeches that we have heard here today would suggest that we have not suc-cessfully come through the COVID -19 pandemic. But
we as a people have much to be grateful for. And it is important for us to come together, move forward and rejoice because in some places in the world they do not enjoy what we enjoy here in Bermuda.
So, Madam President, I am not going to keep
us here all afternoon because I know we still have much
to do tonight, but I will say that the Progressive Labour
Party is moving forward. We are moving our country forward and we invite our colleagues to join in in that celebration.
Thank you, Madam President.
138 15 March 2023 Official Hansard Report

Bermuda Senate The President: Thank you, Senator Reverend Dr.
Emily Dill.
Would any other Senator care to speak at this
time?

Sen. the Hon. Owen Darrell: Yes, Madam President,
I will.
The President: Minister Owen Darrell, Governmen t
Leader in the Senate, you have the floor.
Sen. the Hon. Owen Darrell: Madam President, I appreciate the opportunity to speak on this general economic debate here in the Senate today. And Madam
President, before reiterating or getting into the meat of
my comments on this debate, I would like to title my
speech (as we always do) and this one is not necessarily unique; however, as all others do have the
Budget Statement, we can see it. And I haven’t heard
anyone refer to it today. But the title of this Budget
Statement that was given just over a month ago, or about a month ago, by the Leader of the Progressive
Labour Party, the Honourable E. David Burt, Premier of
Bermuda, was “Path to Continued Economic Growth.”
Madam President, I will say that again: the
“Path to Continued Economic Growth.” And before taking a stroll down this path, I must as always pushback
and respond to some of the absurd dribble that we were forced to sit through earlier today. And I must be honest, Madam President, that usually people use a spade
to shovel that type of nonsense.
Madam President, a Senator who represents
the Opposition party got up earlier and said that the
Progressive Labour Party are mismanaging finances. He asked a question if we were better off today than we
were under a previous Government. And I just want to
put in here that I found something very interesting, and I will get to this a little later, but the One Bermuda Alliance are so confused that I don’t think that people of
this country could ever trust the type of decisions that
are coming out of that building on top of Music Box.
I will give you a little observation, Madam President. In 2020, during an election campaign, they stood
up in front of this big red banner and they had a slogan. I thought it was kind of weak, but the slogan was We
will do better. Madam President, I am an observant
young man. My son is kind of similar. But if you watch
the news . . . and they have been having a lot of press
conferences lately because they seem to be in a little bit of disarray over there. But if you look at their press conferences, Madam President, they couldn’t even go
around the road and get a can of paint and paint over
the slogan that said, We will do better. What they did
was take a piece of tape and stick it acros s and now it
just says, One Bermuda Alliance. So, clearly, Madam
President, the One Bermuda Alliance have come to the
realisation on their own that they have no clue how they
would run this country better than the Progressive Labour Party. So let me remind the Senators from the Opposition party —

The Senator is misleading the Senate because I believe we have . . . the Senator is misleading the Senate, Madam President.
The President: That is not a point of order.
Sen. the Hon. Owen Darrell: Madam President, the
Senator is so confused he must be s pending too much
time on Twitter. Because all he has to do is pull up the
videos . . . you know why he doesn’t know? Because I
have never seen him in one of those videos . . . leaving
his leaders out to dry. But we will get to that later,
Madam President.
Let me remind the One Bermuda Alliance. And
Senator De Couto, he does a lot of talking but I am not
sure if he listens. He got on his feet this morning and
he had the nerve to call plans for Morgan’s Point a
pretty picture that will never amount to anythi ng.
Madam President, I need to remind him that the reason
why we even have to put plans in place for Morgan’s
Point is because we are trying to get housing and other
activities for Bermudians and find a way to get back this
debt from Morgan’s Point and Car oline Bay which was
$213.8 million. So let’s talk about a pretty picture!
Mercy!
Again, a Senator just got up a moment ago,
and I felt like she was speaking off my notes. But I have
another colleague who said that when you say things
10 times, there are individuals who, believe it or not, are
just hearing it for the first time. So, we are in this mess. People need spades because of a Minimum Revenue
Guarantee to Skyport. Again, Cross Island, $27.8 million. You have heard this all before. That is a total o f
$200.6 million.
Again, some people may hear this for the first
time, so I am going to say it again. The One Bermuda
Alliance talks about are we better off? Absolutely we
are! Absolutely! Because when you double our national
debt, and then you look at thi s Government and see the
plans that we [have] to get to a balanced budget, yes,
Madam President, we are better off with the Progressive Labour Party Government.
We have experienced the two largest deficits in
Bermuda history. Again, Senator De Couto must not be
around OBA headquarters to remember all of this stuff:
Downgraded independent ratings; furlough days; increased payroll taxes. And of course, the slogan by a
former Member of Parliament who wore red shorts.
Let me say it slowly for those who need t o hear
it again, Madam President. They doubled the debt; they

B ermuda Senate had the largest deficit; downgraded ratings; furloughed
employees; increased taxes. These are jargons and slogans rather than fiscal policy. And would want —
POINT OF ORDER
[Misleading]

Point of order, Madam
President. He is misleading the Senate. The debt was not doubled.
Sen. the Hon. Owen Darrell: Madam President, I am
not sure you would want these words characterising a Bermuda Government moving forward.
In contrast, let me talk about the Progressive
Labour Party’s Government and the budget, and the path to continued economic growth, Madam President. We see in Bermuda sustainable economic growth. Five
consecutive quarters of GDP growth. The GDP in 2022
projected to grow between 3.4 [per cent] and 3.9 [per
cent]. Repaying of the $50 million debt which will save $2 million annually in debt services. Declining deficit and [we] are still on track to balance the budget in
2024/25. Historic increase in cruise shi p arrivals. And
80 per cent of the Economic Recovery Plan is actually
on target.
Yet, we have to listen to . . . I call him my mate,
but he sits in another place, and we have to listen to the OBA get up and give a Budget Reply . . . again, I am
not sure if Senator De Couto goes around there, but the OBA wanted to increase TA fees. That is bizarre to me. No wonder they erased the slogan that said, We will do
better.
POINT OF ORDER
[Misleading]

—was publicly corrected,
Madam President, so —
Sen. the Hon. Owen Darrell: Corrected? —
Se
n. Dr. Douglas De Couto: —it is a misleading statement.
Sen. the Hon. Owen Darrell: So you made a mistake?
Say it ain’t so!
The OBA wants to introduce a tax on health
care. Again, increasing cost on Bermudians. The One Bermuda Alliance criticised the PLP’s tax changes that reduced taxes for all individuals, 86 per cent of Bermuda’s workforce. Eight -six per cent!
The President: Minister Darrell, address the Chair.
You are addressing your comments . . .
Sen. the Hon. Owen Darrell: The OBA, Madam President, continues to mislead Bermudians. And if that was enough spade- worthy material —yes, spade -worthy
material —the Opposition is continuing their age- old attacks on FinTech, without recognising the great news that is right in their face.
Let me lay out and remind the good Senator
over on the other side that great things are happening in FinTech. The Government has never been more confident in the future of the digital assets industry in Bermuda. It has been five years since the passage of the Digital Asset Business Act in 2018. And Bermuda
was one of the first countries to have a comprehensive
licensing regime.
Bermuda’s only weakness to attracting more
companies is the limited banking market which will be addressed by the launch of Jewel Bank very shortly,
Madam P resident. We currently have 16 licensed digital asset businesses with six licences having [been] issued just last year alone. Jobs in the sector continue to grow with companies keen to hire Bermudians. And the goal for this industry is key to diversifying our economy.
However, Madam President, as a result of some of the
bad choices that were left to us by another Government, we are pleased to see our net debt lower than forecast and we are still on track.
However, Madam President, now I am going to
actually start the meat of my remarks. I continue us
down this path to continued economic growth. And
Madam President, as I was doing my preparations, I
looked at nine key areas in this year’s budget that I wanted to go into detail on. Some may say nine is too many. But I can tell you this, when I was whittling it down to such a small number, nine seemed like I did
not have enough. But again, this is a good problem to
have, when you have a Government that is working hard on our path to continued economic growth.
Madam President, as the Minister of Youth,
Culture and Sport I am proud of this Government’s commitment to increase funding for sports development, elite athletes and high performing athletes. I am
also proud of this Government’s commitment to in-crease youth programmes. As a spokesman in this
place in the Senate for tourism, education and the Cab-inet Office, Madam President, I am proud of this Gov-ernment’s economic plan in the areas of education, uniform customs duty, and the Fairmont Southampton Hotel.
As a son, as a brother, as a friend of many individuals who I speak to, and a proud Bermudian, I am proud to address the issues that are affecting everyday citizens in this country. The issues that we are [dealing
with] as a Progressive Labour Party to fix some of these
140 15 March 2023 Official Hansard Report
B ermuda Senate issues are: the Mortgage Guarantee Programme,
banking reform and hopefully soon a digital bank, pay-roll tax relief (which I mentioned earlier) and the contin-ued completion of our Economic Recovery Plan.
Madam President, let’s go into more detail .
This PLP Government has always been committed to
developing our athletes. There is no question that the
contribution of sport makes a nation’s identity. In 2017, our election commitment was to support sports devel-opment and national sport [governing] bod ies. In our
2020 election campaign, the Progressive Labour Party was committed to honour and celebrate Bermudian
athletes who have achieved excellence in sports. One
example that I can point out is our national junior athlete sponsorship programme. In 2020, [there were] 172 young people involved in 19 different sports who have received funding. We will provide support to ensure that our athletes continue to dominate on the world stage
and this, again, will continue to prove that Bermuda often punches above its weight. We will continue working with the leadership of our National Sport Governing Bodies in the development of their long- term athletic
plans. We will continue to dedicate in our efforts to
sports development by sporting elite athletes, national
sporting bodies and youth organisations.
As was recently seen on a business trip to Buenos Aires, it was important for myself as Minister responsible for sport to attend the ICC Regional Qualifi-ers in person and to witness first -hand, Madam President, what the impact of an investment in local talent actually looks like. I am sure that all of us are not com-pletely buried from what is going on in the real life, so it probably was no surprise to you, Madam President, to see when this group of young cricketers r eturned back
to Bermuda to see the cohesion of the board, the cohesion of the coaches, the cohesion of the players and in
the end, we welcomed back an undefeated team who was beaming with Bermudian pride. That, Madam President, is what investment in Bermud ians actually
looks like.
It is not just sports, Madam President. The PLP
Government has made significant investments in the development and growth of our young people in arts and entrepreneurship. Our entrepreneurship pro-gramme offers Bermudians, particularly young people, an opportunity to cultivate their entrepreneurial spirit
while earning money over the summer months. This innovative programme not only teaches valuable busi-ness skills, but also encourages our young people to explore their passions and consider new pathways to success. In addition, we have increased grants to sup-port artists, creatives, sporting bodies and clubs. This
investment in our Island’s talents and passions, Madam
President, demonstrate our belief in their potential and their commitment to nurturing a vibrant and diverse community.
Madam President, let me touch on increased
youth programmes. The Progressive Labour Party
Government recognises the unique challenges that Bermudians face in today’s rapidly changing world.
From the soaring cost of living to the need for better access to education, employment and social services, we are committed to addressing these issues head on and delivering meaningful change for our youth. The Progressive Labour Party Government, Madam President, believes that the future of our nation lies in the
hands of our youth. And it is the responsibility —our responsibility —to ensure that they have the opportunities
and resources to reach their fullest potential.
As we forge ahead with our progressive policies, it is crucial to contrast them, Madam President,
with the Opposition, the One Bermuda Alliance. The OBA has consistently advocated for cutting staff, re-ducing investment in vital services for our youth. They argue that balancing a budget should be priori tised
over investing in Bermuda’s youth, Madam President. However, the Government of which I represent, the
Progressive Labour Party, firmly believes that for a successful future we must invest in our youth.
The PLP Government has committed to ensuring that young Bermudians have access to tools, re-sources to thrive in an increasingly competitive global
economy. Our National Youth Policy is a testament to
this commitment, Madam President, as it consolidates and integrates existing programmes, delivering more
effective services, fostering direct engagement for our youth and the development of Government policies. This policy empowers our young people giving them a
voice in shaping the future of Bermuda and ensuri ng
that our nation remains relevant and responsive to the
evolving needs of our eight priority areas: Keeping young people safe and protected from harm; achieving full potential and learning and development in educa-tion; minimising antisocial behaviour; in creased employment and entrepreneurship opportunities; engag-ing youth in sport, culture and recreation; supporting young people to be active and healthy; enabling partic-ipation in civic engagement and encouraging diversity and inclusion.
Let me go a little further with this youth employment strategy, Madam President. The Progressive La-bour Party’s youth employment strategy is a critical ini-tiative aimed at meeting the identified needs of unem-ployed persons between the ages of 18 and 26. The programme guides unemployed Bermudian youth back
to the workforce by providing them with training, opportunities and jobs. This is not just rhetoric, Madam Pres-ident. In the 2023/24 fiscal year, we are providing addi-tional resources to support local entertainment, boost youth employment, and expand summer day camp spots (which I talked about earlier).
As I mentioned before, the Progressive Labour
Party continues to be steadfast in our commitment to investing in the future of our youth. Again, the approach of the One Bermuda Alliance is simply to balance the budget. The OBA plans to reduce investment and jeop-ardise, if I may say, Madam President, the future of our

B ermuda Senate youth. The Progressive Labour Party Government
simply will not stand for that.
My third point, quickly getting to nine, Madam
President, is on education. Madam President, the Pro-gressive Labour Party has always been committed to reforming our public education system. In fact, it is my
firm belief that long after we are gone, Madam President, much will be written about the positive impact that this Government had on Bermuda’s education system for children and the result of the impact that it had on this country.
Let’s take our minds back to 2017, Madam
President. Our parents and students (and I know be-cause I was in that system as an educator) were dis-couraged by the state of this country’s education sys-tem, a lack of opportunities that the former Government provided Bermudians to enhance their skills and further education. As Senator Hodgson reminded us this
morning, let’s not forget that the former Government reintroduced fees at the Bermuda College while cutting scholarships and short -changing our public education
system, Madam President. Again, spade- worthy decisions.
The Progressive Labour Party Government is
committed to undoing the damage done by the Opposition and restoring the faith in our public education sys-tem. As clearly articulated in our 2017 and 2020 elec-tion commitments, we are focused, Madam President, on education reform. We have delivered on our promises, we have installed high- speed Internet, we have
supplied public schools with Chromebooks. We have
provided funding for new mathematic programmes. We have successfully launched signature schools this aca-demic year. We have ensured that every Bermudi an
who wants access to further education at the Bermuda
College can actually get it, Madam President. [The PLP
has] increased scholarship funding for students in over-seas institutions. We have amended legislation to allow Bermudians with the ACCA designation to be fully rec-ognised as registered accountants in Bermuda.
Madam President, we as the Progressive Labour Party understand and recognise that more can be done. And this budget will do more for public education. This is why we are advancing the most si gnificant public education reform that this country has ever seen, Madam President. We are redesigning how the system
and schools are governed. We are reorienting the system to nurture, empower and sustain the transfor-mation of our schools. We are redesigning models of learning, teaching and schooling. We are rebuilding the infrastructure, Madam President, reengaging stake-holders. And more importantly, we are remembering
the history and legacy of education in Bermuda. Surely,
what I heard this morning was a lot of nonsense.
But one thing that I do not think that the Opposition can possibly question us on, Madam President, is that our commitment to education is second to none. Now, you may say, Well, if you look at the One Bermuda Alliance, their platform and their plans may have been a carbon copy of the PLP’s plan. I don’t know if
Senator De Couto has done that. So you may say to
me, Madam President, So what’s the difference? Here
is the difference: The Bermudian public can see and they can trust that the Progressive Labour Party is ac-tually doing something about education while we are in
Government, Madam President.
I would like to speak briefly on Fairmont Southampton. In a speech earlier today, that most people
probably won’t remember, a Senator from the other side questioned whether the Fairmont Southampton will ever be a reality. I am shocked because I am made
to understand that his colleagues actually took a tour of
the Fairmont Southampton a week ago where they were given first -hand knowledge of how close they are
to the redevelopment of Fairmont Southampton. Now, I could understand, based on what I have been seeing in certain news publications, maybe he is not part of
that team anymore. I am not sure. But we can all be
sure that the Fairmont Southampton Hotel is eagerly
awaited.
As the Premier outlined previously, that since
the closing of the deal, lawyers, development consultants, bankers, and technical officers have all been
heavily engaged in the preparation of various agree-ments that will provide the framework to financing this development. And again, we all know that we are very close to the opening of this hotel.
Madam President, if I can get to (I am almost
done with my nine) highlighting the Mortgage Guarantee Programme. Unlike another party (I am actually tired of calling their name) we understand the challenge of housing affordability in this country. In fact, it is actu-ally a topic that makes me sad. In particular, how this affects young Bermudians in this country, Madam President. Many of whom have been off to college, they
have gotten good degrees, they are coming back, they have got good- paying jobs, Madam President. And
they are seeking to establish themselves and build on the future of the Island.
Madam President, you may ask me, Well, why
do know so much about these individuals? That is be-cause they are my friends, Madam President. My friends are struggling to find houses, and go to banks that continuously brag about their profits and raise in-terest rates. My friends, Madam President, a lot of them
who have good jobs are struggling to afford to have affordable housing in this country.
In response to this pressing issue, the Progressive Labour Party has launched a home- building programme, giving young families the opportunity to se-cure a stable, long- term home. Also, we have introduced reduced rate mortgages for first -time homebuyers, further supporting young Bermudians as they take a significant step toward home ownership. And a colleague and MP in another place launched a mortgage guarantee programme back in October. His pilot pro-gramme is where the Government provides partial
guarantees in support of local mortgages with Bermuda
142 15 March 2023 Official Hansard Report

Bermuda Senate Commercial Bank. You would have thought that other
banks would have jumped on board by now, but I guess
they are more concerned about the $200 million profits
that they make year over year.
I am pleased to reiterate that beginning on
April 1 of this year, we will be transitioning t o phase 2
of this programme where the public officers with mort-gages at other institutions will be eligible to transfer
them over and participate in this programme. It should
be noted that this does not apply to mortgages where
the public officer owns mult iple properties or does not
reside in the home. Also, as part of phase 2, we will be
removing the age restriction so that any Bermudian applying for a new mortgage is eligible.
Madam President, I want to get into one of the
biggest points in the path of t he Progressive Labour
Party. And that is the one of payroll tax relief. And let
me just go right to it, Madam President. Any employee
who is earning less than $132,000 a year will pay less
payroll tax. That amounts to 86 per cent of workers.
And Madam Pres ident, this is the fourth time that the
Progressive Labour Party has reduced payroll tax since 2017. No business in Bermuda will pay more in employer payroll tax than they were last year. And employers will be exempt from payroll tax for employees on mater nity and paternity leave. Now, Senator De Couto
spoke for a long time. And I am not sure I heard of any of this in his speech.
The Progressive Labour Party, as you can tell,
Madam President —

Will you accept a point of information,
Minister?
Sen. the Hon. Owen Darrell: No, thank you. Not at this
time.

The President: Thank you.

Sen. the Hon. Owen Darrell: I just want to get this
point out, Madam President, that this Progres sive Labour Party Government has implemented policies to mitigate the impact of rising costs on families in this
country.
We have reduced payroll taxes (and I am going
to say it one more time) to 86 per cent . . . 86 per cent
of Bermudians will see their payroll tax actually decreased. Just as pandemic tax concessions are set to
come to an end, the payroll tax relief for new hires is
set to expire in March of 2024. This programme has
been remarkably successful and currently there are
about $350 million tha t is not subject to employer payroll tax due to this exemption.
Madam President, I just want to finish my remarks by reminding all [about] the Government’s Economic Recovery Plan. The Economic Recovery Plan is a key feature of the Government’s comprehens ive economic development strategy. The economic strategy is
the framework that will guide Bermuda to sustainable
economic growth and development. We can see,
Madam President, as I mentioned earlier, that 80 per
cent of this Economic Recovery Plan has actually been
put in place. And this, Madam President, actually
shows us that the Progressive Labour Party is well on
its way, and well on a solid path to continued economic
growth.
And despite what we have heard from Senator
De Couto [and] what we have heard from other individuals which amounts to nothing more than confusion in
the public domain, Madam President, I can tell you that
I am proud to be able to sit here today and be part of
the Progressive Labour Party Government who has a clear plan —a clean plan— to economic growth in this
country which will mount and lead to economic success, which will make the lives of Bermudians, those of
whom we serve, Madam President, a lot better and a
lot easier going forward. And then people can honestly
answer the question with a resounding yes , that the
Progressive Labour Party puts them in a much better
off financial position than any other Government that
may have preceded it.
Thank you, Madam President.
[Desk thumping]

The President: Thank you, Minister Owen Darrell,
Government Leader in the Senate.
Senator Arianna Hodgson, it is now over to you
to give your response.
Sen. Arianna Hodgson: Madam President, I would
like to say that I am challenged but not surprised by
some of the commentary shared today. The truth is that while we have significantly different whys and hows, I
do believe that we all want to see a strong economy,
an excellent education system, access to affordable
health care and ultimately we want to see Bermudians
prospering in their own home.
Regardless of anything that the Opposition
may spin, the Progressive Labour Party Government
has a strong record of sound fiscal management. Since coming to power in 2017, the PLP has taken a number
of important steps to address the Island’s physical challenges. One of the most significant achievements of the
PLP Government has been its success in reducing the Island’s debt burden. This has been achieved through
a combination of prudent spending decisions and efforts to increase Government revenues. So, yes, while
spending has increased over the years, this has only
been made possible with increased revenues.
After consistent attacks over our management
of the public purse, I am exci ted that in this year’s
budget we have made the tough decision to make sig-nificant investments in infrastructure, in education, and
in health care which will ultimately improve the overall


Bermuda Senate well-being of Bermudians. We have done all of this
while expanding duty relief, reducing taxes by 86 per
cent of our Island’s workers, and ensuring that no business in Bermuda will pay more in employer payroll
taxes than they did this year. When I reflect on my time as the Junior Minister
of Finance, I have had the opportunity to meet persons
from all different backgrounds. And although I recognise that people are struggling and that in some instances it is hard to see a glimmer of hope, there are
many people who are excited about all that Bermuda has to offer. It is tru ly refreshing, Madam President.
While Members of the Opposition claim that we
are disincentivising international business, I think it is worth highlighting the great relationship that exists between the Government, the regulator, and industry.
And yes, wh ile we have our challenges, this relationship bodes well for responsible entities looking to enter
an ecosystem with a strong regulatory regime.
Madam President, the truth is that this Progressive Labour Party Government has also been responsible for intr oducing a number of important regulatory
reforms that have helped to improve the Island’s business environment. For example, the Government has
worked to streamline the process of starting a new busi-ness in Bermuda. We have reduced the time and cost
in get ting a business up and running. And all of these
items have helped to attract new investment to the Island and actually support the growth of existing businesses. We have incentivised new hires, the relief that
has left over $350 million of taxable remuner ation untouched.
And although we have often [been] criticised
for delays in immigration processing, I actually want to thank Minister Hayward and his team at the Department of Immigration as they have made significant im-provements to the timeline for processing both pass-ports and work permit applications. And industry can
definitely confirm this. I think that we actually saw a
press statement in February that highlighted that the
board of directors and members of the Bermuda Hotel
Association [had] actually issued a press release to the
general public thanking the department for the timely processing and approval of annual work permit renew-als. And there was also a comment that had shown
their appreciation for the demonstrable improvements
and expertise by t he team at the Department of Immigration.
Overall, this Government has demonstrated a
clear commitment to sound fiscal management and we
have taken important steps to address the challenges
facing Bermuda’s economy. While there is still work to
be done to ensure the Island’s long- term prosperity, I
truly believe that the PLP has laid a strong foundation
for future growth and success.
Again, Madam President, we have seen five
consecutive quarters of GDP growth. We are repaying $50 million of debt this year, again, saving the people
of Bermuda $2 million. We are on track for a balanced budget in 2024/25 and could have done it this year. Eighty per cent of our ERP priorities are on target.
Again, I encourage persons to actually look at the economic plan so that can follow us on our journey to advancing the economy. We are seeing growth in key
tourism measures. And as we look forward to a vibrant
summer, I am anticipating record- breaking cruise arrivals this season. So, there is a lot to be excited about,
Madam President.
Although we have been criticised for failing to
listen, this couldn’t be further from the truth. We are a Government that listens. And I find it interesting because I remember that we shared the Pre- Budget Report back in December and the Minist er of Finance and
Premier, he was gung- ho on getting it out to as many
persons as possible, to opening all the avenues for receiving the feedback, and I remember seeing the frus-tration on his face every time he asked for an update
on the proposals, the rec ommendations, the feedback.
And we struggled in some instances to get feedback. I
know that amongst my peers a lot of us go off to social
media and we complain amongst ourselves. But when
given an opportunity to share and to actually contribute
to the budget process, we struggled to get the buy -in.
We talked about the politics of hope today, and
I am not sure if I am just naïve, but I believe that the
politics of hope is important. And particularly important
in a post -pandemic era because it helps to rebuil d trust
in governments and institutions and it provides a sense
of direction and purpose for our citizens. When I reflect
on the past two years, I recognise that the pandemic
has caused widespread uncertainty, anxiety and despair and I believe that ultimat ely people are looking for
leaders who can offer a positive vision for the future. By
emphasising hope I believe that we as politicians can
actually create a sense of optimism and we can inspire
people to work together toward common goals.
It is interesti ng because there was a Member
in another place who claimed to be concerned that the
comments made by one of my colleagues would deter
international investment in Bermuda. Yet, there are
Members of the Opposition who take every opportunity
to bash our effor ts to diversify our economy and to
guide Bermuda to sustainable economic growth and development. Something has to change, Madam Pres-ident, and it is not this Government. Luckily, the Independent Senators are not called upon to provide alternative solutions for voters, but I do want to briefly comment on this idea of the overuse of government guarantees.
The Government of Bermuda has historically
used Government guarantees to attract foreign investment and to provide a level of security for investors
which obviously provides protection against default or
loss. And this is the same for governments in other places, Madam President. While some argue that the
redevelopment of the hotel is important for Bermuda’s
tourism industry and economy and necessary to ensure
144 15 March 2023 Official Hansard Report

Bermuda Senate its success, there are others who have expressed concern about the potential costs and risks associated with
Government guarantees and the need for transparency
and accountability in Government spending. I want the
listening public to understand that wh en we make a decision to provide a guarantee in support of getting our
Island’s largest hotel back online, we do it so that our
people have employment opportunities, so that we can
increase the airlift in our country (which is something
that has been highl ighted in recent weeks), so that we
can create more opportunities for entrepreneurs (as
has been said today), and so that we can ensure that
our young people and our working families can actually
receive lower interest rates. That is something that I will
perhaps touch on later because there is so much space
for our Government to lead in creating competition
against our banks so that the consumers are actually the ones who benefit.
This Government is working to create a favourable business environment. And I believe that with a
Government that invests in education and training and consistently promotes innovation and entrepreneurship, I am confident that we will get to a place where
Bermuda can attract the necessary investment without
having to rely on sizeable Government guarantees.
When I hear Members of the Opposition speak,
there is often this lingering idea that a labour Govern-ment cannot manage government funds. And it is actu-ally a reminder that we ultimately serve under two different philosophies. W e are a labour Government and
it is true that we tend to have a different approach to
managing finances. It is also true that we are often
faced with the challenge of balancing economic growth
and stability with social programmes that benefit the most vulnerable members of our society.
While economic growth is important for generating revenue and creating jobs, it is equally important to ensure that the benefits of growth are shared fairly
and that those who are struggling are supported. If you
check the history, one of the most significant areas
where the OBA failed to provide alternatives, was in its
approach to addressing Bermuda’s economic challenges. While the OBA criticises this Government for its
management of the economy, they have never been able t o get on the same page to present a clear plan for
how they would do things differently.
Heroes are characterised by their bravery,
compassion and commitment to doing what is right
even when it is difficult. This means taking action to address issues su ch as poverty, inequality, discrimination
and social exclusion and ensuring that all citizens have
access to the opportunities and resources that they
need to thrive.
Thank you, Madam President.

The President: Thank you, Senator Arianna Hodgson.
Is this the conclusion of the debates or are you
. . .
Sen. Arianna Hodgson: Yes. Madam President, I
move that the Senate do now resolve itself into a Com-mittee of the whole for further consideration of the Appropriat ion Act 2023, together with the Estimates of
Revenue and Expenditure for the year 2023/24.

The President: Thank you, Senator Hodgson.
For the information of the listening audience, I
would like to advise that at this time during this stage
the Chair is taken by the Senate Vice President Senator Kiernan Bell. And she will be assisted when neces-sary by Senator John Wight.
So, Senator Kiernan Bell, you can now take the
Chair.

Senate in Committee at 4:02 pm
[Sen. Kiernan Bell , Chairman]

COMMITTEE OF SUPPLY

ESTIMATES OF REVENUE AND EXPENDITURE
FOR THE YEAR 2023/24

Thank you, Madam President.
So, as Senators we are now in Committee of
the whole for further consideration of the Appropriation Act 2023 together with the Estimates of Revenue and
Expenditure for the year 2023/24.
The Ministry under consideration is Finance.
The heads for debate under this Ministry are Head 10
which can be found at page B -104 of the blue book;
Head 11 at page B -108; Head 12 at page B -113; Head
28 at page B -114; Head 38 at page B -117; Head 39 at
page B -121; and Head 58 at page B -125.
The number of hours allocated to these heads
is three. The Senator in charge is the Junior Minister, Senator Hodgson. Senator, how would you wish to proceed?

MINIS TRY OF FINANCE
Sen. Arianna Hodgson: Madam Chairman, I move
that the Committee do now take under consideration Head 10, Ministry of Finance Headquarters; Head 11,
Accountant General; Head 12, Customs; Head 28, Social Insurance; Head 38, Office of the Tax Commis-sioner; Head 39, Registrar of Companies; and Head
58, Debt and Loan Guarantees .

Would any Senator wish to speak on
those heads?
Sen. Arianna Hodgson: Madam Chairman, the
2023/24 budget estimates for the Ministry of Finance are found in section B of the Estimates Book on pages
B-104 through B -124, and in section C on pages C -4,
C-11 and C -18.


Bermuda Senate The Ministry of Finance comprises six departments, led by the Ministry of Finance Headquarters,
and includes the Accountant General, Customs in relation to revenue, the Department of Social Insurance,
the Office of the Tax Commissioner and the Registrar of Companies. Allocations to cover the interest on government debt, contributions to the sinking fund, guarantee management and the pension commission are
also included in the Finance Ministry’s budget.
Madam Chairman, the Ministry has the total
staffing establishment of 155 posts and an aggregate current account bu dget of $236.4 million and is responsible for collecting $1.035 billion, or 90 per cent of all
government revenue. A snapshot of key information for the Ministry of Finance is shown on page B -103 of the
Estimates Book. The department Current Account allo-cations are as follows:
• Head 10 —Ministry of Finance Headquarters,
$6.79 million;
• Head 11— Accountant General, $82.21 million;
• Head 12—Customs. The Customs expenditure budget actually sits under the Ministry of National Security, although the Ministry of Finance maintains responsibility for the customs
tariff and revenue collections;
• Head 28— Social Insurance, $3.53 million;
• Head 38 —Office of the Tax Commissioner,
$3.9 million;
• Head 39—Registrar of Companies, $9.54 million; and
• Head 58— Debt and Loan Guarantees, $130.4
million.
Madam Chairman, the presentation of the National Budget Statement on Friday, February 17,
marked the official start of the Budget Debate in the
House of Assembly. It now gives me great pleasure to present the budget for the Ministry of Finance.
Madam Chairman, the Finance Ministry plays
a pivotal role in the ongoing stability and prosperity of
Bermuda, particularly in light of the serious local and
global economic uncertainty currently faced by our
country and others around the world. Over the past six
years since this Government has taken office, you
would have noted a recurring theme, that is, the Gov-ernment’s resolve to a consistent strategy to diversify
and strengthen Bermuda’s economy and provide support to its people while stabilising the Island’s debt. The
following key areas of focus in this strategy are:
• targeted investment and tax policy to enhance
economic growth by attracting investment that
creates jobs;
• making Bermuda’s tax system fairer while reducing the tax burden for worker s;
• modernising Bermuda’s regulatory regime; and
• maintaining fiscal discipline by meeting budget
targets. We have a responsibility to the people of this
country to provide the best fiscal and economic man-agement possible. And to this end we will continue to
make the necessary decisions required to grow Ber-muda’s economy and reduce the tax burden on work-ers.
Madam Chairman, on the heels of a lasting
global pandemic, Bermuda continues to be faced with significant challenges which, if not appropriately managed, can damage our economic security and stability.
To that end, the Finance Ministry’s budget has been carefully constructed and appropriately built to ensure
that the Ministry’s in -house team supported by various
external stakeholders are able to lead the Government’s fiscal and economic policies aptly and responsibly.
In light of the ever -increasing threats and expanding obligations which Bermuda must address, ensuring that the Ministry is appropriately resourced continues to be a priority. To this end, during the past year,
reviews of resources in key areas were done, and ac-tive steps have already been taken to address the identified gaps. The additional funding required has therefore been included in the cost estimates for relevant
units and department s contributing to the significant increases in some areas. Key initiatives which will have
to be progressed include banking, tax and pension re-form, more targeted debt collection, expanded compliance and regulatory oversight, and enhanced adherence to international requirements. The Ministry will
also continue with its internal structural reform for more
effective collaboration, operation and management.
These structural changes include the establishment of two directorates led by the Deputy Financial Secretary, one of which will be focussed on domestic
and economic matters, and the other on international
and regulatory matters. The various units and departments of the Ministry will fall under one of these directorates. These directorates will be supported by a central unit which will assist with finance, administration
and policy support for the Ministry, and particularly the
Financial Secretary and the Minister.
Madam Chairman, the mission statement of
the Ministry of Finance is found on page B -103 reads
as follows: To supervise the economy of Bermuda generally and to provide overall financial management and
control of all government activities. In line with this, I
highlight some of the Ministry’s key objectives as follows:
1) Formulate and adhere to sound and prudent fiscal policies to achieve financial stability and promote stable and sustainable economic
growth.
2) Provide strategic direction and an overall
framework for effective financial management and control of government activities, and provide an appropriate framework for effective
compliance.
146 15 March 2023 Official Hansard Report
B ermuda Senate 3)Oversee and ensure the prudent management
of public funds.
4)Arrange all government borrowing require-ments at the most competitive rates.
5)Prepare, implement and closely monitor thenational budget.
6) Maintain effective relations with credit rating
agencies.
7)Play an effective and appropriate role in ad-vancing Bermuda’s national ESG [environmen-tal, social & governance] strategy.
8)Ensure and support the fair, coherent and predictable development of financial services and
other relevant regulation, and appropriatelymonitor its implementation consistent with in-ternational standards.
9)Monitor the internationally agreed tax stand-ards, seek to influence changes thereto, adhere to its compliance requirements and b
e
pr
oactive in treaty negotiations with respect to
tax information exchange agreements and the
exchange of tax information.
10)Advance the government’s anti- money laundering [AML] and anti -terrorist financing [ATF]
policy initiatives, and monitor for changes in in-ternational standards and for other relevant
global developments that will affect Bermuda.
11)Support legislative and policy developments toaddress such changes and coordinate
measures to enhance Bermuda’s AML/ATF regime.During the past year we were able to move forward in a number of key areas. And in this Statement, we will seek to highlight the key accomplishments. These include a successful refinancing of almost $1 billion of debt, and effective advocacy meetings with key
persons in the United Kingdom, the European Council
and Commission, as well as other officials in leadership roles in EU nations, and an unqualified audit of the con-solidated fund, positive interactions with rating agencies resulted in the maintenance of our strong credit
ratings and provision for relief of the people in Bermuda in much- needed areas in the face of 14- year-high
global inflation, completion of a successful year as Chair of the Caribbean Financial Action Task Force, and continued prudent management of the public purse
in execution of an effective debt and deficit management strategy.
As we go forward into this coming year, we will
continue to build on the strong foundation that has been established with the focus on economic growth, main-taining Bermuda’s positive reputation as a reputable financial centre, executing a prudent fiscal strategy bal-anced by our commitment to appropriately meeting the needs of the people of Bermuda —all of this while seeking to build a fair and just society.
I will now speak to the various units which comprise the Ministry of Finance, starting with Head 10, the
Ministry of Finance Headquarters. HEAD 10 —MINISTRY OF FINANCE
HEADQUARTERS
Sen. Arianna Hodgson: Madam Chairman, the Ministry of Finance Headquarters’ core functions are con-ducted under Head 10, Ministry of Finance Headquarters, which can be found on page B- 105. The work undertaken by the Ministry Headquarters is carried out through the following units: Policy, Planning and Management; Fiscal Planning and Control; International Affairs and Regulatory; Domestic Affairs and Economic
Policy; Treaty Management and Administration; and
the Office of the National Anti -Money Laundering Committee [NAMLC].
The Ministry of Finance Headquarters’ mission
is as follows: Achievement of economic prosperity and
to ensure the financial security of Bermuda. In discharging its functions under the overall policy direction
of the Minister of Finance, the Ministry of Finance Headquarters seeks to achieve the following outcomes: a Bermuda that maintains its position as a domicile of
choice for international business; a Bermuda where citizens have confidence in the Government’s stewardship of the public purse; a Bermuda where funding and resources are available for key programmes and initia-tives; and a Bermuda where citizens regard Government’s policy responses to economic and financial challenges as appropriate and in the national interest.
Madam Chairman, in seeking to fulfil this mandate, the Ministry of Finance Headquarters has a staff establishment of 22 permanent full -time posts, and its
total budget for 2023/24 is $6.79 million. This allocation is reduced by $153,000 from the prior fiscal year, pri-marily due to a reduction in funding for regulatory quangos in keeping with the principle that regulated ent ities
bear the cost of compliance, as well as various operational costs including travel as more business is con-ducted remotely.
Madam Chairman, the budget for Ministry
Headquarters includes an operational element for each of the six programme areas within Ministry Headquar-ters, plus grant funding to the Pension Commission and the Bermuda Public Accountability Board. Detailed in-formation on each of these cost centres, as well as the other departments who form part of the Ministry of Finance are incorporated into the presentation that we
will have today.
Madam Chairman, the 2023/24 budget estimate for the Policy, Planning, and Management Unit is $2.303 million, an increase of $408,000, or 22 per cent,
over 2022/23. This unit, under the leadership of the Acting Financial Secretary, provides advice and support to
the Minister of Finance, as well as overall strategic direction, oversight and management of Ministry Head-quarters and the departments that comprise the Minis-try of Finance. In addition, this unit manages the admin-istration and other activities associated with the daily
operation of the Ministry of Finance Headquarters. It


Bermuda Senate plays a key role in financial accountability of various
quangos, as well as overseeing general financial and
fiscal oversight and ac countability throughout the Government.
The $408,000 proposed increase in expenditure is necessary to support the cost of external resources to assist the Ministry in accomplishing its mandate in the area of innovative policy development.
These resources will fill resource gaps in the Ministry
[and] provide specialist expertise when required, such as professional firms who undertake special projects such as the ongoing project to move from the pilot mortgage guarantee scheme to one where we see a reduction of mortgage rates across all banks in this country.
Additionally, work is being done to advance matters re-lated to the global minimum tax.
Included in the Ministry of Finance Headquarters is a $300,000 grant to the Bermuda Public Accountability Board, [w hich is] unchanged from the
2022/23 allocation. The primary objective of the Bermuda Public Accountability Board is to oversee the su-pervision and enforcement of auditors who carry on audit business in Europe and in the United Kingdom in
accordance with the Bermuda Public Accountability Act
2011 .
Madam Chairman, the budget for the Fiscal
Planning and Control Unit in 2023/24 is $549,000,
which is $35,000 lower than 2022/23. A salary provi-sion of $428,854 accounts for 73 per cent of the Budget
Team’s allocati on for 2023/24. The provision covers the
post of Director of Budgets, Principal Budget Officer, Budget Officer and Budget Assistant.
The Fiscal and Planning Control Unit, or the
Budget Team, is primarily responsible for the manage-ment, collection and coll ation of Consolidated Fund
budget data; the monitoring and control of overall gov-ernment expenditures; and the achievement of govern-ment revenues. The unit is also tasked with the responsibility of reviewing and developing the government’s
annual capital expenditure plan.
The Director, Ms. Tina Tucker, a long- serving
public officer, continues to give great support to the
Ministry and the Government as a whole, also represents the Ministry on key quango boards to ensure ap-propriate financial management and governance. The
Budget Team provides advice and guidance to department heads and controllers on both the formulation of
Ministry budgets and on budget monitoring and control.
The team provides two formal training sessions each
year, designed for ministry/departmental staff who have responsibility for budget preparation and/or
budget monitoring and control.
As part of the budget monitoring and control
exercises, all ministries and departments are required to review expenditure performance and to confirm on a
monthly basis their current and capital account ex-penditure performance with the Budget Office. The
budget monitoring exercises include a detailed media review of all expenditures and revenue to provide up-dated fiscal projections for the year and the rel evant
budget actions to sustain the budget deficit target. As part of a detailed mid- year budget review exercise, ministries were able to identify savings in revenue achievements to offset the additional funding for economic relief, COVID -19-related expend itures, Bermuda Hospitals Board grant and additional expenditures to deliver
on services to the people of Bermuda for 2022/23.
Madam Chairman, controlling government expenditure has been and still remains a significant com-mitment of the Government. In order to determine high
policy priority programmes, the Budget Office has continued to utilise zero- based budgeting [ZZB] methodology for the development of 2023/24 estimates. Policy prioritisation at the start of the budget process will fac ilitate a better alignment of the allocation of limited resources with Government’s overall policy initiatives and
objectives. Zero- based budgeting is a method of budgeting in which all expenditures must be justified, along
with a systematic review of perf ormance of current programmes.
The fundamental aim of ZZB is to reflect the
current and proposed future programmes and services required by the Government’s national plan. It is important to note also, Madam Chairman, the public value
assessment which hel ps to ensure services are being
delivered in as an efficient manner as possible.
For fiscal year 2023/24, the department has set
objectives to provide support for the open budget process, to enhance budget monitoring and reporting, and
to continue the dev elopment of the budget preparation
methodology website.
Madam Chairman, the 2023/24 budget estimate for the [International Affairs and] Regulatory Unit
may be found in section B of the Estimates Book on
page B -105. Accordingly, the budget for this unit is
$468,000. There is no change to this budget allocation for this period.
Madam Chairman, the Regulatory Unit is the
lead policy division within the Ministry of Finance Headquarters in relation to the financial services sector. The
Regulatory Unit is accountable to the Financial Secretary for the effective discharge of the unit’s functions
and through the Premier/Minister of Finance to Cabinet and Parliament. The head of the unit, the Assistant Financial Secretary [for Regulation], carries out financial
services policies, working closely with other teams in
the Ministry of Finance, particularly the Treaty Unit, the
Registrar of Companies, and the Office of the National
Anti-Money Laundering Committee, as well as the Bermuda Monetary Authority, the Attorney G eneral’s
Chambers, the National Anti -Money Laundering Committee, the Bermuda Public Accountability Board, the Chartered Professional Accountants of Bermuda and
specialist global partners. In this way the Regulatory
Unit works to strengthen the financial services supervisory framework and key institutions that enable access
to the domestic economy and the global economy.
148 15 March 2023 Official Hansard Report

Bermuda Senate Madam Chairman, the Regulatory Unit operates in response to a broad range of opportunities and
risks, which allows the Ministry to contrib ute actively to
a continuous flow of information on potential threats and opportunities to Bermuda and its reputation. Those opportunities and risks are constantly changing. The
Regulatory Unit’s planned response to these challenges through various goals f ocuses on advancing the
unit’s priorities and reflecting the outcomes the people of Bermuda deserve. Working closely with the Premier,
the Acting Financial Secretary and the relevant entities, these goals are to
• ensure and support the fair, impartial, effi cient
and transparent development of regulation at
the national and international level;
• strengthen the capacity to secure regulatory
solutions to economic security issues; and
• strengthen the public diplomacy and support
bilateral and multi -lateral engagem ent.
Madam Chairman, the Regulatory Unit is involved in a variety of policy and management areas
from regulatory reform in financial stability to anti -
money laundering and market access issues at home
and abroad. In general, the scope of information requirements is broad. Within the area of digital money and financial services regulation, and supervision execution must be better and smarter. The scope of the
Regulatory Unit’s activities are as follows:
• to support the Premier/Minister of Finance and
the Fi nancial Secretary in coordinating the financial services regulatory policy initiatives of
the government;
• to oversee the Ministry of Finance component
of the financial services legislative programme,
together with the Bermuda Monetary Authority
and the Min istry of Legal Affairs and Constitutional Reform;
• to provide policy and strategic advice to the
Premier/Minister of Finance and the Financial
Secretary on anti -money laundering policy initiatives together with the National Anti -Money
Laundering Committee, pursuant to section 49
of the Proceeds of Crime Act 1997;
• to provide policy and strategic advice to the
Premier/Minister of Finance and the Financial
Secretary on matters related to transparency,
financial services directives and other related
directives i ssued by the European Union working together with the Cabinet Office, the Brus-sels Office, the London Office and EU Special-ist Advisors; and
• provide advice to the Financial Policy Council
together with other domestic agencies and/or
committees regarding ma tters related to financial services.
Madam Chairman, in 2022/23 the Regulatory
Unit was primarily focused on technical and strategic
assistance regarding the financial services sector at home and abroad. Additional milestones achieved by
the Regulatory Unit in 2022/23 included the following:
• maintained regulatory stability by ensuring
completion of the Ministry of Finance component of 12 financial service sector Bills and/or
statutory instruments including but not limited
to banking, governance, enforcement, insur-ance and investment business;
• proposals submitted by the Bermuda Monetary
Authority in 2022 related to digital asset business and other aspects of banking having various levels of complexity. These proposals
have been prioritised for completion in 2023;
• in collaboration with the Ministry of Finance
colleagues, the Regulatory Unit provided technical and strategic advice on supervisory as-sessments, sovereign- rating meetings, as well
as the 2022 Government of Bermuda refinancing bond deals;
• as appropri ate, the Regulatory Unit provided
input on relevant UK, US and EU matters, as well as assisted in advocacy in domestic and
external engagement initiatives.
Madam Chairman, the Unit’s primary role going forward in the next year will be to continue to work with the relevant finance teams, the Cabinet Office, the
Attorney General’s Chambers, the Bermuda Monetary
Authority, the Gaming Commission and the Bermuda
Public Accountability Board to meet Bermuda’s domes-tic and international commitments and to implement the
structural adjustments for the coordination and oversight of the International Unit, as outlined in the main
body of this Statement.
In order to achieve its priorities and pursuant to
the Ministry of Finance business plan, the Unit will undertake th e following key strategic goals in 2023/24:
Madam Chairman, the Regulatory Unit will work with
relevant parties to coordinate Bermuda’s compliance
with the various EU directives and assist with preparing
for visits by the Minister of Finance to meet with key
European Union stakeholders. Madam Chairman, the
Regulatory Unit will contribute to and support the im-plementation of Bermuda’s anti -money laundering
strategy in relation to compliance with Financial Action
Task Force [FATF] requirements.
Madam Chairm an, ongoing work with UK authorities will include matters related to equivalence and transparency. The Unit will also work closely with the
Treaty Unit, Registrar of Companies, the Office of
NAMLC and others as appropriate to coordinate the Finance Ministr y’s response to the OECD as and when
required. In 2023/24, the Regulatory Unit expects to
work closely with the Bermuda Gaming Commission to
reassess the supervisory framework including in relation to compliance with AML/ATF requirements.
Through this work the Regulatory Unit helps
supervisors and businesses articulate the regulatory
market access and related challenges they face to the government and the public.


Bermuda Senate Madam Chairman, a salary provision of
$396,516 accounts for 85 per cent of the Regulatory
Unit’s allocation for 2023/24, which covers three posts.
Madam Chairman, the 2023/24 budget allocation for the Domestic Affairs and Economic Policy Unit
is $431,000, [which is] unchanged from the allocation
of the previous year of 2022/23. This unit provides research and analysis of economic and financial conditions to help facilitate sound decisions on public policy
and fiscal debt and guarantee management. The Unit
also manages the relationship with credit rating agen-cies and assists other government entities with addressing financing needs. Representing the Ministry on
specific quango boards is also a key responsibility.
As mentioned in last year’s 2022/23 Budget
Speech, a key challenge at the time was related to the
need to refinance almost $1 bil lion in debt within 24
months. This was successfully achieved in July/midAugust of 2022, and as a result no new refinancing is
now expected to be needed by the Government of Bermuda until 2027 —without question, a positive result in
this uncertain interest rate environment.
Madam Chairman, in the upcoming year this
Unit will play a greater role in the coordination and over-sight of all domestic and economic matters. It will en-sure proper collaboration and cost -efficient approaches
in debt collection, which will be a key area focus for this
year. It will also assist in tax reform work, enhanced fi-nancial reporting and more focused debt and guarantee management and monitoring.
Other key initiatives include continuing to improve the sustainability of the gover nment’s funds in an
updated framework that allows for progressive contributions. Work is currently being finalised on the strate-gies that will help ensure the sustainability of the funds,
and this will be followed by stakeholder engagement with employees, unions and taxpayers to discuss the
various options and to collectively agree on a way forward. In addition to the proposed change in the contribution structure, adjustments will also have to be made
to other levers, namely, retirement age and benefits.
Continuing to work on the development of economic models for the forecasting of key economic indicators in government medium- term fiscal data, to
amongst other things, enhance the execution of the
Government’s fiscal and economic management strategy in cons ideration of the reform of the tax system.
And this is a very important point as we develop a various number of economic models to help us predict
where we are going. Assistance is being received from members of the Economics Unit and the Financial Policy Council.
In conjunction with the Minister of Public
Works, the launch of the government -owned captive insurance company to further reduce costs and create
efficiencies in relation to the provision of insurance for government assets.
Working with quangos to strengthen financial
accountability and governance and working with other teams to assist the analysis of costs and to assess the
financing options of major capital expenditure projects
including in the areas of health and education reform
and also the refurbishment of Tynes Bay.
Madam Chairman, the salary provision of
$315,000 accounts for approximately 73 per cent of the
Economic and Financial Intelligence Unit’s allocation for the 2023/24 fiscal year and covers two posts.
Madam Chairman, the 2023/24 budget estimate for the Treaty Management and Administration
Unit may be found in section B of the Estimates Book. Accordingly, the budget for this Unit in 2023/24 is
$1.549 million. This represents a decrease of
$385,000, or 20 per cent of this budget all ocation for
this period compared to the original 2022/23 budget es-timate.
Madam Chairman, the work of the Unit continues to diversify from the original core activity that led to
its creation, that is, the negotiation and processing of
international tax cooperation on the by -request basis.
Madam Chairman, the Treaty Unit’s remit is to
• negotiate and administer agreements related
to the bilateral tax information exchange with
member countries of the European Union,
G20, Organisation for Economic Co- operation
and Development [OECD], other jurisdictions
and other key countries;
• participate in the OECD multi -lateral tax information exchange treaty with more than 100 participating countries.
• manage and administer requests for tax -related information received under the provisions
of Bermuda’s tax agreements;
• ensure that Bermuda operates in keeping with
the common reporting standard for the OECD,
the country -by-country reporting standard of
the OECD, TIEA [tax information and exchange of information] on the request by -request basis standard of the OECD, and any new tax reporting standards of the OECD.
Madam Chairman, the Treaty Unit, in addition
to negotiating and managing international tax treaties, has also increasingly worked with Bermuda’s international business s takeholders to address international
tax policy threats. The international business sector in
particular, the insurance and reinsurance industry, con-tinues to be an important part of our economy, and
therefore the work of the Treaty Unit is critical protection of this significant contributor.
Madam Chairman, the Treaty Unit’s main
achievement in the current fiscal year was to play a key role in Bermuda’s response to the emerging OECD global tax standard. The Treaty Unit provided policy advice and input into Bermuda’s [submissions] into the
G20 OECD inclusive framework on the two- pillar solution on [base erosion and profit shifting], BEPS.
Madam Chairman, the most well -known element of this work is the G20 OECD global minimum tax
of 15 per cent, which represents one of the biggest
150 15 March 2023 Official Hansard Report

Bermuda Senate challenges in the history of Bermuda’s international
business sector and thus also is a significant threat to
Bermuda’s economic stability. Therefore, the Treaty
Unit, on behalf of the Minister of Finance, has been
working in close c onsultation with various international
business stakeholders for almost the past three years
on a constant basis. Some of those international business stakeholders are now members of the newly appointed International Tax Working Group, to which the
Treaty Unit provides support and advice in their critical
deliberations on the appropriate implementation of this
new global agreement.
Madam Chairman, the Treaty Unit’s management of Bermuda’s compliance to the OECD and Euro-pean Union international tax policies has become a majority component of the Treaty Unit’s work. Although the Unit continues to negotiate and manage tax treaties and updates to Bermuda’s tax treaty relationships
when required, the Unit is also involved in managing
aspects of the threat posed by the EU listing process
which represents a constant activity that the Government must be aware of and must manage.
Madam Chairman, there are at least five separate but equally volatile doors to EU listings.
• EU/OECD economic substance, handled by
the Registrar of Companies and the following
OECD regimes, handled by the Treaty Unit:
o the OECD common reporting standard;
o the OECD country -by-country reporting
standard;
o the OECD TIEA exchange of information on the by -request basis standard; and
o participation in the OECD Multilateral Tax Treaty.
Madam Chairman, there is also a likelihood
that the OECD global minimum tax regime, which has been approved by the European Union which is issued an EU directive and with plans being announced by
other co untries, will be added to the OECD standards,
which the EU monitors for their famous list s. Madam
Chairman, although the timing and implementation of
any such measures in various countries remain uncertain, the potential impact on Bermuda’s international competitiveness is significant. Therefore, the work of
the International Tax Working Group is pivotal to Bermuda’s future success.
Madam Chairman, the Treaty Unit has potentially identified additional resource posts needed to ef-fectively administer the four OECD regimes’ compliance requirements. However, given the need for experienced resources, the Unit has strategically chosen
consultants to assist to administer these OECD regimes until the resource analysis has been completed.
Thus, currently there are t hree Treaty Unit staff and one
vacant budgeted post. And there is a projected cost for
the temporary use of external resources. The aggregate budgeted annual salary cost is $438,769, and there is $689,000 included in the Treaty Unit’s budget to cover the c ombined costs of legal and advisory experts to assist in the ongoing work related to the global minimum tax.
Additionally, $300,000 is allocated to the Unit’s
core administrative function related to the necessary IT software services of the Ministry’s IT asset, the international tax reporting portal to keep its software updated
and compliant with the OECD standard for the automatic exchange of tax -related information, for the
OECD [and the] automatic exchange [of information] [AEOI] regimes of the common r eporting standard
[CRS] and for the country -by-country reporting [CBCR]
standard.
Madam Chairman, given the strong linkages
between the work of the Treaty Unit and the Registrar
of Companies it is proposed that there will be an appropriate amalgamation ov er the next few years. This is
seen as an opportune time, given the significant
changes that have already taken place in relation to the
OECD and EU initiatives and the expectation that there
is more to come. It should also create better costs and
operatio nal efficiencies, which are important given the
related complexities and comprehensiveness of the requirements. In the meantime, the Treaty Unit will continue the following initiatives during the next fiscal year
1) Continue to negotiate tax information ex-change agreements and other agreements relating to tax information exchange and associated agreements, or negotiate revisions to existing tax agreements so as to maintain Bermuda’s tax agreement relationships with member countries of the EU, G20 and OECD, and
other countries, especially during a period of
potential change to Bermuda’s tax regime.
2) Seek to keep Bermuda compliant with the
OECD tax standards especially during a period
of possible revisions to Bermuda’s domestic
tax regime.
3) Administer requests for exchange of tax -related information on the by -request basis received from Bermuda’s over 100 partner countries.
Madam Chairman, the Office of the NAMLC
budget for fiscal year 2023/24 is $889,827.87, a de-crease of approximately 4 per cent from 2022/23 year ’s
original allocation.
Madam Chairman, the purpose of the Office of
the National Anti -Money Laundering Committee is to
provide secretariat support to NAMLC and to enable the Ministry of Finance to achieve the objectives of
• advancing the Government’s anti -money laundering and anti -terrorist financing [AML/ATF]
policy initiatives;
• monitoring for changes in the international
standards and for other relevant global developments that will affect Bermuda;
• supporting legislative and policy development
to address such changes; and


Bermuda Senate • coordinating measures to enhance Bermuda’s
AML/ATF regime.
This requires the Office to be responsible for
the administration of NAMLC’s national initiatives such as the assessment of Bermuda’s national anti -money
laundering and terroris t financing risks, and managing
the reviews of Bermuda’s anti -money laundering and
antiterrorist financing regimes by external bodies.
Through its established coordination and cooperation
mechanisms, NAMLC ensures that Bermuda has a
strong, effective regim e to combat money laundering,
terrorism financing and the financing of proliferation,
and the competent authorities within NAMLC assis-tance international counterparts in the effort to address
these issues on a global scale.
Madam Chairman, during the curr ent fiscal
year, NAMLC has continued its critical focus on maintaining and where needed enhancing the effectiveness of Bermuda’s AML/ATF framework. This is necessary
to sustain the achievements noted in Bermuda’s 2020
Mutual Evaluation Reports, as well as to address recommendations made by the assessors in that report. NAMLC’s priority is thus on attaining a technically compliant and broadly effective AML/ATF framework, the
goal of which is to combat and minimise the occurrence of money laundering and terrorist financing in Bermuda.
Madam Chairman, during the 2022/23 fiscal
year, Bermuda’s first report to CFATF [Caribbean Fi-nancial Action Task Force] following the publication of
the 2020 Mutual Evaluation was presented at the CFATF plenary which was held in May of 2022. Therefore, at the start of this fiscal year NAMLC engaged with the CFATF Secretariat in the finalisation of this report. In consequence of the progress reported by Bermuda,
CFATF maintained Bermuda in a regular follow -up, unlike the majority of CFATF member countries who were in enhanced follow -up. Bermuda’s second follow -up report will be considered two years after the first report at the May 2024 plenary. However, Bermuda will be sub-ject to being reassessed for compliance with three of
FATF’ s 40 recommendations as the Financial Action
Task Force has made changes to two of the recommendations since 2020.
Bermuda will be required to submit full written
submissions and supporting evidence six months prior to the plenary in November 2023.
Madam Chairman, during the follow -up process, Bermuda must report on our progress and ad-dress the assessment’s recommended actions and remediate the deficiencies noted by them in the 2020 Mutual Evaluation Report. For the upcoming second follow-up report, given the re- rating process, NAMLC has
already commenced work on this during the current fis-cal year. The following work has been undertaken by
the Office in 2022/23 to support this:
1. Provide support to one NAMLC agency whose
legislative and technical cooperatio ns were identified by the assessors as having deficiencies, leading to the rating level requiring a subsequent re- rating. This work is ongoing and will
involve legislative amendments to advance in the upcoming fiscal year.
2. Lead a project to help NAMLC impl ement actions to address new technical requirements
imposed by the Financial Action Task Force for
the second of three recommendations for
which Bermuda will be re- rated. Thus, coordination of support from the Privacy Commission
and the PATI and PIPA Units in the Cabinet Office has already started to bring NAMLC’s
agency’s coordination and domestic cooperation practices in line with data protection standards. Significant additional work to progress
this will continue into the new fiscal year.
3. Support the Bermuda Monetary Authority with
the conduct of the first sectorial risk assessment for the digital asset business sector.
Thus, the Office is coordinating the involvement of other NAMLC agencies and leading
the technical analysis necessary for their contribution to this assessment. This sectoral risk
assessment recently commenced and is part of
the technical work required to address substantial new requirements imposed by the Financial Action Task Force, better known as
FATF, in relation to the remaining recommendations to be re- rated. That risk assessment
will continue into the new fiscal year and must
be finalised before the November deadline for
submission of Bermuda’s report to the CFATF Secretariat.
Madam Chairman, during the fiscal year
2022/23, NAMLC also carried out work to review and
update Bermuda’s National Anti -Money Laundering/Anti -Terrorist Financing and Counter -Proliferation
of Financing Action Plan. During this year the National
AML/ATF CPF policy was also updated and approved
by the Ca binet. This updated national action plan reflects the actions Bermuda needs to take to enhance
the effectiveness of the AML/ATF regime and to remediate deficiencies identified in the most recent national
risk assessments undertaken in 2020. The updated na-tional policy is also risk -based and provides a roadmap
for Bermuda’s competent authorities on how to operate
to achieve the goals and objectives of an effective
AML/ATF regime.
These initiatives are essential components of
Bermuda’s fidelity to the international standards which require countries to maintain an updated understanding
of their risks and regularly update their national policies
and strategies to reflect the identified risks.
Madam Chairman, as previously noted,
NAMLC conducted national risk assessments in 2020
to assess Bermuda’s exposure to terrorist financing
and money -laundering risks. These assessments were
152 15 March 2023 Official Hansard Report

Bermuda Senate completed in 2020 and 2021, respectively. Full technical reports on the outcome of these assessments
have been finalised and approved by the Cabinet. But
a consolidated version of these reports is being pre-pared for publication with the expectation that the re-port will be published shortly.
Madam Chairman, approximately 90 per cent
of the budget allocation represents the minimum level of funding required to achieve the provision of secretariat services to NAMLC, including to meet Bermuda’s fi-nancial obligation to the CFATF. The remaining $88,062.31, or 10 per cent of the budget funds ancillary
items required to enable NAMLC to fulfil its statutory
mandates.
Madam Chairman, for 2023/24, NAMLC’s focus will continue to be on ensuring that Bermuda main-tains its position as a global leader in the fight to combat money -laundering, terrorist financing and proliferation
financing, especially in the face of rather significant
changes being made by FATF to international stand-ards. Remaining compliant is essential to Bermuda’s current standing in the CFATF follow -up programme,
but it will also be an important aid to Bermuda as we
look toward to FATF ’s upcoming fifth round of mutual
evaluations, which is due to commence in 2025. The
Financial Action Task Force has already made important changes to the standards and to the assessment methodology in preparation for this. And Bermuda will soon need to take steps to implement those new
requirements.
In accordance with the national AML/ATF policy, action plan and strategy, Bermuda’s AML/ATF programme will continue to be advanced during this period
to avoid undoing the achievements that have already been r ecognised.
Madam Chairman, most of the budget allocation comprises funding for three full -time employee
posts and the Chair of the National Anti -Money Laundering Committee. The remainder of this portion of the allocation goes toward local training initia tives for
NAMLC; the annual CFATF membership contribution; attendance at CFATF plenaries and other conferences;
and miscellaneous administrative costs. The remaining
10 per cent of the allocation is project funding, representing approximately a quarter of the cost for NAMLC
to conduct national risk assessment exercises to start
in January 2024. The remainder of the cost of that assessment will be covered during fiscal year 2024/25.
Although no project funding was allocated specifically
for Bermuda’s second follow -up report, agencies will
have to appropriately contribute to their share of any
required costs.
Madam Chairman, the key initiatives which the
office will provide support to NAMLC during the finan-cial year 2023/24 are as follows:
• Continue to coordinate the input of relevant
NAMLC agencies and provide technical leadership in part of the analytical work for the money -laundering risk assessment of the digital asset business sector and as appropriate the legal person assessment.
• Finalise and submit Bermu da’s written submissions to CFATF Secretariat required for Bermuda’s second follow -up report due in November 2023. This will involve coordinating and
keeping NAMLC’s agencies accountable for
completing outstanding actions required to address the assessor’s recommended actions to
the 2020 report and to remediate the identified
deficiencies.
• Lead or provide necessary support for completing the actions needed to facilitate Bermuda’s successful re- rating for three FATF
recommendations, namely, recommendations 2, 15 and 32, and coordinate the preparation
by NAMLC of written submissions to report on the progress made to satisfy the technical compliance requirements needed for these re- ratings.
• Key initiatives include planning for, coordinate and commence in Januar y 2024 the first consolidated money -laundering/terrorist financing
national risk assessment in accordance with
Bermuda’s national AML/ATF and CTF policy.
An updated national risk assessment for
money -laundering and terrorist financing is required to be conducted every three years. For
the first time, NAMLC has decided to consolidate the risk assessments given the availability
of an optimised tool to facilitate this.
• The Office will organise and conduct specialist
money -laundering and terrorist financing tra ining for NAMLC members and for private sector
participants in the national risk assessment as
a precursor to the launch of this assessment.
As NAMLC has decided to commence the first
proliferation financing risk assessment at the end of the 2023/24 money -laundering/terrorist
financing national risk assessment, a suitable assessment tool and methodology will have to
be identified and procured along with preliminary training for NAMLC members. This will facilitate effective planning for this assessment.
• Undertake private sector consultation in relation to the proposed reform of the appeal tribunal framework established under the Proceeds
of Crime legislation. The Office will also manage the legislative development process for
this initiative.
• Organise foundat ional cryptocurrency training
for all NAMLC agencies to sensitise technical
officers to various categories of cryptocurrency
and other digital assets and how they are being misused in AML and ATF schemes.
Madam Chairman, the proposed grant for the
Commiss ion for 2023/24 is $600,000, a 14.29 per cent


Bermuda Senate decrease from the previous $700,000 grant in the
2022/23 budget.
Madam Chairman, the Pension Commission is
a corporate body established under the National Pension Scheme (Occupational Pensions) Act 1998 and has the following functions:
• to administer the Act and the Regulations ;
• to consider and determine applications for the
registration of pension plans;
• to consider and determine financial hardship
withdrawal applications;
• to promote and ensure compliance by pe nsion
plans for the provision of the Act and Regulations;
• to monitor the administration and funding of
pension plans and to enforce the provisions of
the Act and Regulations in respect of such administration and funding;
• to verify the payment of the benefi ts under the
pension plans;
• to promote public education on pension plans
and their benefits;
• to advise the Minister on any matter relating to pensions, including the development of laws
relating to pension plans;
• to provide such information relating to its functions as the Minister may require;
• to investigate complaints relating to a pension
plan and a pension fund; and
• to perform any other functions provided for in
or under this Act.
Madam Chairman, the [Pension] Commission
also has responsibility for the administration of the Pen-sion Trust Funds Act 1966 and pension trusts established and administered under this Act.
Madam Chairman, like many other organisations in Bermuda, the Commi ssion’s operations were
impacted by shifting its focus away from responding to
the changing demands of the COVID -19 pandemic in
the previous two years. The Commission moved from
remote to in- office working, but still had to be vigilant in
protecting staff from the more contagious variants. The
previous introduction of more online applications and
communication platforms still proved beneficial in han-dling various transactions from active and retired plan
members, employers and pension plan service providers.
The Commission also maintained its responsibility in the Bermuda Government’s continued provision of both temporary and permanent financial relief via ac-cess by active and retired plan members to their pension fund balances. The Commission’s income has
benefited from enhanced regulatory fees that were first received in 2020 and when combined with reduced
budget expenditure resulted in a net positive outcome
for the year. During the year the Commission recognised it
would be increasingly important to bec ome more financially sustainable by reducing its reliance on government grant funding to cover its operational expenses.
To this end, it continued to build up its capital reserves and examined potential sources of additional independent sources of regulatory income. This process will continue in 2023.
Madam Chairman, recognising the continued
challenge of the economic impact that the COVID -19
pandemic caused in the domestic economy, the Government introduced a further temporary pension refund
benefit under the Act. In particular, the legislation was
enacted to allow plan members under the age of 65 to
withdraw up to a further $6,000 from their occupational
pension plans. Applications made to a plan member’s
private [ pension] plan administrator have to be submitted by the 30
th of June of 2023. This temporary refund
provided by the Government is in addition to the $12,000 provided in 2021 and the $6,000 refunded in
2022.
Madam Chairman, these and other related additional refunds have provided timely and substantial financial support to Bermudians, and I am pleased to
provide the following summary of the approved refund payments up to the 31
st of December 2022:
• temporary refunds in the amount of $235 million;
• small pension refunds at $8.43 million; and
• 25 per cent lump sum refunds at $45.1 million.
In relationship to other areas of activities and
responsibilities of the Commission, I can advise the following:
• During 2022, the Commission registered 91
plan amendments compared to 63 in 2021.
• Approved one plan t rustee in comparison to 27
in 2021.
• Wound up 31 plans compared to 21 in 2021.
• Initiated two civil actions against delinquent
employers and their directors and officers compared to 21 in 2021.
• Conducted 21 compliance meetings with employers and plan members compared to 19 in
2021.
• Held eight compliance meetings with plan administrators compared to one in 2021.
• Participated in two public and/or advisory committee meetings compared to four in 2021.
• Completed 19 transactions under the Pension
Trust Fund Act 19 66 compared to 31 in 2021.
As of the 31st of December 2021, the National
Pension Scheme contained 48,679 plan members or
former members. There were a total of 3,157 employer
plans and the total value of assets under the National Pension Scheme was US$3.85 billion. There were 548
self-employment plans, and US$267,000 of plan assets
were transferred to overseas retirement vehicles com-pared to $1,040,000 in 2020.
154 15 March 2023 Official Hansard Report

Bermuda Senate Madam Chairman, Honourable Members will
recall that the National Pension Scheme [Financial
Hardship] Regulations 2010 were introduced to help
Bermudians with real financial need to get access to a
portion of their private sector pension funds based on prescribed criteria for hardship. The Regulations were
further amended in 2011 to permit rental arrears as an
additional category of financial hardship. Additional
hardship refunds for funeral expenses were added effective the 2
nd of January 2020. In 2012 the Commission also became responsible for the administration of
financial hardship applications for civil servants under
the Public Service Superannuation Act 1981.
Accordingly, refunds for the five following circumstances of financial hardship are permitted:
1. eligible and uncovered medical expenses;
2. threat of loss of principal residence due to default;
3. threat of eviction from home due to arrears of
rent;
4. eligible fees payable for tertiary education; and
5. eligible funeral expenses, which is only availa-ble for private sector pension plans at this time.
Madam Chairman, I am pleased to provide a
summary of the financial hardship application statistics provided by the Commission for the 2022 financial year
from inception up to the 31
st of December 2022 as follows:
• 117 total applications were received;
• 77 applications were approved;
• 25 applications wer e denied;
• 15 applications are still pending or withdrawn;
• Total amount approved was $1,563,403.
Applications approved by type:
• eligible education expenses, 46;
• imminent threat of loss of principal residence,
nine;
• imminent eviction from the home of rental arrears, 16;
• eligible medical expenses, four;
• funeral expenses, two.
Since inception the total applications received
since August 10, are 3,827. Of those, 3,088 were approved; 577 have been declined. There are also an additional 162 applications that were either pending or
withdrawn. And the total amount approved is $38.01
million. Applications approved by type: eligible education expenses, 1,215; imminent threat of loss of principal residence, 486; imminent eviction from home for
rental arrears, 1,182; eli gible medical expenses, 199;
and funeral expenses, six.
Madam Chairman, for the upcoming year the
Commission has a number of goals:
1. the establishment of a revised strategic plan;
2. to enhance its human resource levels;
3. to undertake a series of review on cri tical issues and challenges facing the occupational
plan sector in Bermuda in order to make recommendations to the Minister of Finance on necessary legislative and/or policy adjustments ;
4. to improve the understanding and compliance by regulated entities wit h key regulatory issues
and requirements;
5. to introduce a financial awareness campaign
on the importance of saving and retirement
planning and the significant role occupational
pension plans play in achieving successful outcomes;
6. to continue to enhance the Commission’s financial independence and sustainability via
the identification of additional sources of revenue;
7. to continue to strengthen its corporate govern-ance at both the board level and the operational level;
8. to complete outstanding audits;
9. to complete the work to expand options for
pension investments as well as to address
pension charges;
10. to continue to review and recommend to the Minister of Finance further legislative enhancements to the Act and Regulations as required;
and
11. to update the Commission’s website and con-tent.
Madam Chairman, the Commission’s projected
total revenue for the year is $2.01 million, which consists primarily of the government grant of $600,000 and
regulatory fees of $1.4 million. Madam Chairman, the
Commission’s proj ected total expenses for the year are
$2.077 million consisting of $1.515 million for salaries
and related benefits; $262,000 for office expenses, including rent; and $300,000 for other operational expenses. The resulting projected position is a net defici t
of $67,000.
I would like to extend my thanks to the staff at
the Pension Commission for their work during the past
year. This concludes the estimates for Head 10.

Sorry. If I could just interrupt, I have
just been asked to ask all the Senators just to check
that their microphones are off, save for Senator Hodgson.
And just a quick note, that is close to an hour.
There are seven heads, so I just want to make sure that
we leave enough time for debate. Thanks.
Sen. Arianna Hodgson: Thank y ou, Madam Chairman.

HEAD 11 —ACCOUNTANT GENERAL

Sen. Arianna Hodgson: I now present the budget for
Head 11, the Accountant General’s Department, which
is found on pages B -108 through B -111, and C -11.


Bermuda Senate The Accountant General’s Department was establishe d under section 4 of the Public Treasury (Administration and Payments) Act 1969, and has responsibilities for the administration of the Consolidated
Fund. The functions and responsibilities of the Ac-countant General’s Department are critically important
in the role of governance. The department is key in
helping to undergird the financial controls and processes that are in place with respect to the public
purse. The department’s mission statement is, To develop and maintain quality financial reporting, employee health insurance, treasury function, internal
control, and effective use in technology to aid in deci-sion-making.
In line with its mission statement, the department’s objectives are:
• to improve the efficiency of the financial statement process, enabling publication of consolidated fund financial statements within six
months of the government’s financial year end;
• to provide quality service to our stakeholders;
• to safeguard the assets of the government by
ensuring adequate internal controls are established and are being followed by all sectors of
the government;
• to provide financial management, oversight,
guidance and support to government ministries
and departments.
The department is divided into two programme
centres as follows: 1101, Consolidated Fund Administration, which oversees all of the activities of the Con-solidated Fund. This is further broken into six sections:
1. Policy Planning and Management
2. Financial Reporting
3. Compliance and Disbursement
4. Treasury Management
5. Bank Reconciliation
6. Financial Systems
The other programme centre is 1102, Fund Administration, which represents the government’s share of employee benefits programmes, namely, the Public
Service Superannuation Fund, the Contributory Pension Fund, the Gov ernment Employees Health Insurance Scheme, and administration of the scheme and
payment of health claims, Ministers and Members of
the Legislature Pension Fund (MMLPF), and it is worth noting that the department continues to operate at staffing levels belo w its total complement of 40 post -holders
with there being 10 current vacancies. Nonetheless,
the department persists in efforts to identify efficiencies within its approved organisational structure.

General Accomplishments in Fiscal Year 2022/23

Sen. A rianna Hodgson: General accomplishments in
fiscal year 2022/23 are as follows:
The compliance and disbursements in financial
systems sections worked with the Ministry of Education
and the Ministry of Finance to facilitate various relief programmes implemented by the Government. Vendor
payments and supplemental unemployment benefit
payments were paid timely and accurately notwithstanding significant staffing challenges. The Financial
Systems Section completed the E1 tool set upgrade. This upgrade prepared t he systems for the application
upgrade currently underway and also addressed several outstanding bug applications in the current applications and workflow. The CAPS [customs automated
processing system] interface utilised by the Customs
Department was reengineered to bring the interface current with the latest programming methods.
Working closely with the Office of the Auditor
General, the Ministry’s annual audit of the consolidated fund was completed and signed off on December 15,
2022. While this was out side of the timing per the borrowing covenant, it was in compliance with the exten-sion approved in advance by the noteholders. And
lastly, treasury functions and other operational service
levels were maintained.
Madam Chairman, the Accountant General’s
Department has been allocated a total budget of
$82.33 million for the fiscal 2023/24 year, which is broken out as follows: Consolidated Fund Administration
estimate at $5.91 million; Fund Administration estimate
at $76.3 million; and Capital Estimate, $125, 000. This
budgetary allocation represents a decrease of $5.38
million, or 6.1 per cent, below the 2022/23 original estimates. The 2023/24 revenue estimate is $750,000, a
decrease of $450,000, or 38 per cent, below the
2022/23 original estimate, This revenue primarily relates to interest earned on the investments in the sinking fund.
The current account estimates can be found on
pages B -108 through B -109. The current year’s request
reflects a decrease of $103,000, which is primarily re-flective of the decrease in funding levels for the vacant
posts currently existing within the department. With recruitment of these posts scheduled to commence in the
new fiscal year, it is anticipated that a full year’s funding
would not be required, and the budget has been pr oportionally adjusted to reflect this.
It should be noted that the items that drive the
department’s overall expenditures are salaries, technical support, maintenance fees for the various soft-ware systems used by the Accountant General [Accountant General ’s Chamber] and rent.
Fund Administration, 1102, which can be found
on page B -108, represents the government’s cost for
employee benefits. These costs are a function of the
number of government employees and the rates relating to their respective benefits . For example, contributory pension is directly related to the national contribu-tion pension rates of contribution. As the employer, the
government ordinarily matches its employees’ contributions to the PSSF [Public Service Superannuation
Fund]; social ins urance contributions [Contributory
Pension Fund, or CPF]; GHI contributions with the exception of Police, Corrections and the Regiment, for
156 15 March 2023 Official Hansard Report

Bermuda Senate which the government pays both the employer and the
employee portion; and the Ministers and Members’
contributions t o the MMLPF [Ministers and Members of
the Legislature Pension Fund].
Contributions made into the PSSF and CPF
are invested to fund future pension payments to vested
retired government personnel. The rates of contribution
are 9.5 per cent of salary for uni form services personnel, and 8.0 per cent of salary and wages for all other
government employees. The current combined employer/employee contribution for the contributory pen-sion fund is $71.84 per employee per week. The decrease in the 2023/24 estimates f or the government’s
costs for employee benefits is primarily reflective of the
decreased staffing levels throughout the service.
Though there is an increase in budgeted posts, our experience has demonstrated that due to delays in hiring and natural turnover, this figure has been often over -
estimated. This reduction is a realistic estimate for the
amount in this upcoming fiscal year.
JD Edwards Enterprise One project. Technical
support and ongoing maintenance will be required in the 2023/24 fiscal year as t he Oracle E1 [Enterprise
Resource Planning, or ERP] System is currently enhanced to improve the business processes and other important services provided.
The 2023/24 capital allocation [CAPA] will be
used to progress the following projects: Completion of the vendor self -service module implementation and the
completion of the application upgrade for E1 9.2.
Madam Chairman, the key initiatives planned
for the Accountant General’s Department for fiscal year
2023/24 are to
1. complete the audited consolidated f und financial statements for the year ending 31 March
2023 no later than October 31, 2023;
2. continue to work to clear the backlog of outstanding financial statement audits of the public funds;
3. work with the Cabinet Office to determine and
mitigate the gover nment’s exposure for the
PIPA [Personal Information Protection Act]
2016 ;
4. continue to deliver scheduled financial instructions training in conjunction with the Department of Employee and Organi zational Development;
5. timely process of outgoing vendor payments;
and
6. ensure that 100 per cent of clean health insurance claims are being paid within 30 days, in
line with legislation.
Madam Chairman, I would like to extend my
appreciation for the work undertaken by the manage-ment and staff of the Accountant General ’s Department
in this regard.
And I will now move on Head 12— Bermuda
Customs.
HEAD 12 —BERMUDA CUSTOMS

Sen. Arianna Hodgson: Madam Chairman, I will now
speak to the Bermuda Customs Department revenue,
which is included under the Ministry of Finance. Customs expenditures are included along with the Ministry
of National Security, which was debated in the House
on Friday, March 3. The pandemic has placed a strain
upon a number of businesses within Bermuda. And in recognition of this, the Customs Department, following
direction from the Ministry of Finance, has continued to
make available a programme of duty payment deferment for local businesses experiencing financial hardships. The programme allowed a temporary deferral of
duty for up to six months for qualifying businesses;
however, in exceptional cases arrangements could be
made for an even longer deferment period. The Cus-toms Department is proud to be involved in this programme which will give a helping hand to the business
community.
Madam C hairman, during the 2022/23 fiscal
year, the Customs Department launched an online auction of imported goods that have been abandoned or
seized in order to recover the duty owed on them. The
website www.customs.bm was established to provide
further details on the available items and is a way to
submit offers for these items.
Madam Chairman, during 2022/23, the following legislative and policy initiatives were introduced:
1. The creation of specific national tariff codes for cash and negotiable instruments. T his involved
the introduction of separate national codes for
bank notes, cheque forms and stock share or
bond certificates , and similar documents of title. These proposed new national codes were
intended to make classification of cash nego-tiable instrument s easier for importers and to
facilitate more detailed statistical reporting on declared imports and exports of currency in
support of Bermuda’s anti -money laundering
efforts.
2. The reduction in the duty rate for LED light
sources. This was done in order to help cushion the costs of inflationary pressures arising
from increasing energy prices. The duty rate
for energy efficient light-emitting diode [LED]
bulbs and modules was reduced from 12.5 per
cent to 5.0 per cent . It was expected that the
result in the r eduction of price of LEDs would
encourage their use, thereby reducing the amount of money spent by the community on
electricity.
3. Miscellaneous harmonising amendments to
the simplified tariff currently in use by the Post Office and courier services. And a number of textual changes in the new national codes
were introduced in Chapter 98 of the tariff to
better align with the subheading descriptions of
heading 98. 03, with those of the headings of


Bermuda Senate the first 97 chapters of the First Schedule to the
principal Act.
4. Expand the scope of duty relief available to the
Bermuda Hospitals Board. And a new end use
duty relief in the Fifth Schedule of the principa l
Act for hospital operating supplies. This was
done to assist the Bermuda Hospitals Board in
offsetting additional operating expenses. The
period of the relief was restricted to 18 months,
from the 1st of April 2022 until the 30th of September 2023.
5. New e nd use relief for fuels. The end use duty
relief for fuels was designed to grant the Minis-ter of Finance the ability to vary the rate of duty
for gasoline, kerosene and diesel fuels that are
being removed from a bonded warehouse for
use in Bermuda. This fl exibility was granted in
order to facilitate the ongoing freeze in fuel
prices at the pump while seeking to ensure
continued safety of delivery and continuity of
supply. It was intended to be an effective mechanism which can allow for relief to be
given to families, taxi operators, fishermen,
tour operators and local businesses. The
amount of the relief under the initiative for the
fiscal year 2022/ 23 was estimated at $6 million,
but ended up to be $11.6 million.
6. Introduction of the zero duty rate for essential
goods. A zero duty rate was introduced for 21
categories of essential goods , as follows:
a. ground beef
b. chicken
c. turkey
d. butter
e. processed cheese slices
f. cheddar cheese
g. green beans
h. jam
i. peanut butter
j. laundry detergent
k. dish detergent
l. diapers for babies, and even
m. sanitary towels and tampons.
This was done pursuant to the recommendation of the Cost of Living Commission on the
economic relief initiative for a basket of essential commodities.
7. New end use duty relief for goods for the local
commercial manufacturer of bread. A new end
use relief was introduced for goods imported
for and used only in the local commercial manufacture of bread or baked goods by a busi-ness organisation approved for that purpose by
the Minister of Finance by notice published in
the Gazette.
The total Customs revised projected revenue
shown on page B -113 of the Estimates Book for
2022/23 is $228.7 million. And the projection for 2023/24 is $231.9 million. Analyses of th e major revenues are as follows:
Customs duty at $227 million, a decrease of $1
million, or less than 1 per cent. The revised forecast for duty collections for 2022/23 has increased by $4 million
when compared to the original. It is expected that duty
collections will return to normal levels during the
2023/24 fiscal year, and consequently the forecast for 2023/24 shows a conservative increase of $2.9 million,
or 1 per cent, from the revised 2022/23 forecast. The
duty revenue forecast is conservative, as we are not
anticipating the $11.6 million shortfall to cushion the impact of rising oil prices. However, we do not know what
the future holds. And if there is another spike in global
gasoline prices, there may be a need for the Government to implement meas ures to protect consumers as
we did in this current fiscal year.
To combat inflationary and supply chain pressures that affect levels of growth, such as construction, while also providing relief via adjustments to the sugar
tax, we have tabled legislation relating to a number of
duty rate reductions and duty reliefs. For the fiscal year 2023/24, [the department] will pursue the following initiatives:
Sugar tax rollback . And we have made it clear
that it is our intention to reduce existing 75 per cent duty
rates as follows:
• Lower added sugar waters at 25 per cent;
• Non- dairy creamers with added sugar, 35 per
cent;
• Nutritional bars and products with added
sugar, 25 per cent.
These changes actually represent a reduction of up to
66 per cent in certain categori es of products with added
sugar.
The Government intends to introduce a new
end use relief for school uniforms with a duty rate of zero per cent. Qualifying will be clothing that pupils are required to wear at school. This will include jackets, blazers, wi ndbreakers and wind jackets, school crest
patches, ties, trousers, shorts, dresses, skirts and di-vided skirts, shirts and blouses, T -shirts and vests and
a host of other items, Madam Chairman. The normal
duty rate for such clothing and footwear is ordinari ly
6.5 per cent.
The aggregate for local commercial manufacturing of concrete. Given the shortages of local product
and to encourage the current construction acceleration that we are witnessing in Bermuda, but to also support
the Government’s desire to see increased housing being built in Bermuda and in anticipation of the increase
in the working population, we intend to introduce a new
end use relief for aggregate for local commercial manufacturing of concrete and concrete blocks with a duty rate of zero per cent. The normal rate of duty for such
aggregate is 25 per cent. This change will not greatly
impact revenue projections, as Bermuda has not historically imported aggregate.
158 15 March 2023 Official Hansard Report

Bermuda Senate Goods for Bermuda’s international sports
teams. We intend to introduce a new end use relief for
uniforms and equipment for Bermuda’s international
sports teams. Qualifying goods will be articles of uniform and equipment. The normal rate of duty for sports uniforms and footwear is 6.5 per cent. The normal rate
of duty for other spor ts requisites is 25 per cent.
Capital goods relief for personal care and fitness business. This Government intends that there
should be an active new temporary customs duty relief
provision for goods for capital investment projects be-ing undertaken by per sonal care service providers in
respect of their business premises. As outlined in the
Budget Statement, the Government intends that the
personal care and fitness sector should have the same
relief currently enjoyed by the retail and hospitality sectors—zero per cent on goods for goods for capital investment projects. Such temporary customs duty relief
is intended to encourage personal care and fitness providers to invest in upgrading their business premises,
imparting added impetus to economic growth already being achieved in this sector.
Forecasted revenue sources other than customs duty are expected to contribute a total of $5.228 million during 2023/24, which based on our forecast would equate to 2.3 per cent of revenue collected by
Customs. There is li ttle indication that receipts in these
areas will change significantly from the revenue levels received during the 2022/23 fiscal year to date.
Madam Chairman, sincere thanks to the Collector and the Customs team for their work in support of Bermuda’s economy in this regard.
I will now move to Head 28, the Department of
Social Insurance.

HEAD 28 —DEPARTMENT OF SOCIAL INSURANCE
Sen. Arianna Hodgson: Madam Chairman, the Social
Insurance Department’s current account estimates are shown on page B -114 of the Budget Book. The estimate for 2023/24 is $3.532 million, which is $410,000, or 10 per cent, less than the 2022/23 original budget.
This budget is solely for war pensions and gratuities.
Madam Chairman, the Director of Social Insurance and its staff administer the Bermuda Government’s Contributory Pension Fund, as well as for benefits to war veterans of the Second World War. War
pensions and gratuities are 100 per cent funded by the
Consolidated Fund. The contributory pensions opera-tions within the depar tment are 100 per cent funded by
the Contributory Pension Fund. Expenditures are paid
through the Consolidated Fund and recharged to the
Contributory Pension Fund in accordance with section
3(3) of the Contributory Pensions Act 1970.
The mission statement of the department is To
ensure that every beneficiary receives a benefit that meets their basic needs. The department operates under two main Acts
of Parliament to administer the government’s social in-surance programmes, as well as the war pensions and
gratuities. The first is the Contributory Pensions Act
1970, and under this Act all employed and self -employed individuals over the age of 18, or age 26 in the
instance of full -time students, who work for more than
four hours per week are required to pay cont ributions.
There are actually two major classes of benefits paid
out of the fund: contributory benefits for old age pensions and gratuity, widow and widowers allowance and gratuity and disability benefits; and non- contributory
benefits for old age pension and disability benefits. The
Pensions and Gratuities (War Service) Act 1947 is the
second Act of Parliament, and under this Act benefits
are payable to Bermudian war veterans or their surviving spouses who served during World War II. There are currently 80 veterans or their surviving spouses in this
programme.
Highlights of 2022/23 are as follows:
On July 15, 2022, the Contributory Pensions
Amendment of Benefits Order was tabled increasing pension benefits by 2.7 per cent retroactive to August 16, 2021.
During December of 2022, Management Consulting Services conducted a review of the department upon the request of the Director of Social Insurance. This review was to assess the staffing needs of the department and to recommend an organisat ional structure that would facilitate alignment with its operational
requirements. The final results of the review will be revealed in due course.
We continue to maintain effective working relationships with the DEU [Debt Enforcement Unit], the DPP [Depart ment of Public Prosecutions], the Department of Immigration, the Office of the Tax Commissioner and the Transport Control Department with re-spect to efforts to assist in debt collection.
As the Island was open fully to business this
year, the Compliance Section participated in various
workshops where they were able to provide clarity to
attendees regarding the pensions, benefits and contributions managed by the Department of Social Insurance.
Madam Chairman, the department operates
with five main cost centr es. Cost centre 38000, Seni or
Management and Administration. The Administration Section provides overall direction and management of
the department. The budget estimate for this cost cen-tre is $1,860,281, which is a reduction of $47,442 from
the 2022/23 or iginal budget.
Cost centre 38010, War Pensions and Gratuities. The War Pensions Section administers benefits to
war veterans under the Pensions and Gratuities (War
Service) Act 1947. The budget estimate for the 2023/24
fiscal year is approximately $3.532 million, which is approximately 10 per cent less than the previous year.


Bermuda Senate The budget is based on 78 war veterans, which is actually 14 fewer than the prior year. Currently, the major
benefits provided by the programme are as follows:
• All veterans receive a m onthly pension of
$1,000.
• Medical benefits are covered at 100 per cent,
including FutureCare insurance premiums,
hospital visits, hospitalisation, all tests at
KEMH, air ambulance, prescription drugs in
excess of $2,000 covered by FutureCare.
• All palliativ e care and long- term care are covered up to $7,000 per month, and a $5,000 funeral grant is refunded to their estate.
• Regular and specialist doctors’ visits have
small co- pays which are reimbursed by the
programme.
Cost centre 38025, Benefits. The Benefit s Section is responsible for the administration of benefits to
mem bers of the Contributory Pension Fund under the
Contributory Pensions Act 1970 and the Contributory
Pensions and Workmen’s Compensation (Reciprocal
Agreement) Act 1970. The budget estimate f or this cost
centre is $386,245, which is a decrease of $58,100
over the 2022/23 original budget of $444,400. Of this
decrease, $51,800 is due to vacant positions being budgeted at 75 per cent, while other overhead costs
are reduced by $6,300.
Total benefi ts paid from August 2021 to July
2022 were $188,596,900, compared to approximately
$183 million in 2020/21, which is an increase of approximately 2.9 per cent. This is in line with the normal average annual expected growth rate of 3.0 per cent.
In 2021/22, of the total benefits paid, $154.8
million was paid for contributory pensions; $13.8 million was paid on widows’ and widowers’ allowances. Gratuities of $10.3 million were paid; $6.7 million were paid on non- contributory pensions, and the remaining $3
million of benefits paid for the period were for contributory and non- contributory disabilities.
The following is a breakdown of the types of
benefits paid (if you look at the Budget Statement):
• Contributory Pensions
• Non- contributory Pensions
• Contributor y disability
• Non- contributory disability
• Widows’ allowances
• Widowers’ allowances
• Widows’ gratuities
• Widowers’ gratuities
• Overall gratuities
• Other gratuities
Madam Chairman, we commend the manager
and staff of the Benefits section who have processed
the benefits on time every month without fail even during the pandemic, including processing increases with
almost a year’s retroactive pay.
Cost centre 38040, Compliance. The Compliance section monitors the compliance of employers and employees according to the provisions of the Contributory Pensions Act 1970. The budget estimate for
this cost centre is $964,200 which is $10,000 less than
the 2022/23 original budget of $974,200.
From August 2021 to July 2022, total debt for
the private sector and self -employed persons decreased by $4.4 million, from $53.4 million to $49.047 million. This is an 8 per cent reduction in the debt compared to 1 per cent in the prior year, and this reflects
the increased efforts of the compliance inspectors in
encouraging employers to keep up with their payments during the year.
The department continues to work with companies to establish practical ways of reducing their out-standing debt, and this includes off -setting amounts
owed for services they have provided to oth er government departments.
The Attorney General’s Chambers Debt Enforcement Unit works in close collaboration with the department to assist in the collection of outstanding contributions. Normally, employers whom the Department
of Social Insurance is unabl e to contact and who are
delinquent over 90 days are referred to the Debt Enforcement Unit. Outstanding contributions collected for
contribution year 2022 amounted to $4,080,800 compared to $3.97 million in 2021.
Madam Chairman, the staffing levels within the
Compliance section have led to challenges to effec-tively carry out both compliance and debt collection
functions as required by the legislation. The Department of Social Insurance will continue to work with the
Attorney General’s Chambers, Debt Enforcement Unit
and the Department of Public Prosecutions to collect the outstanding debt.
Cost centre 38045, Contributions. The Contribution section is responsible for the administration of records and accounts for employers and employees
participating in the C ontributory Pension Fund under
the Contributory Pensions Act 1970. The budget esti-mate for this cost centre is $484,000, which is the same
as that of the 2022/23 original budget. Total contributions for both government and non- government, received from August 2021 to July 2022, amounted to $95,296,300, compared to $60,981,000 in the prior fiscal period, which is an increase of 56 per cent. This increase is the result of the reinstatement of the one- year
suspension of contributions as of August 1, 2021.
Comp arative Analysis of Current Account estimates:
• Salaries and wages . You will notice a decrease
of $82,000 which reflects the reduction in estimates for vacant posts across the department
budgeted at 75 per cent as versus 100 [per
cent] in the prior year .
• For Professional Services you will note a decrease of $410,000 which is primarily due to a
decrease in war vet medical claims and war pension awards due to a reduction in the number of veterans expected to be serviced.
160 15 March 2023 Official Hansard Report

Bermuda Senate • Receipts credited to the programmes . This
amount represents the cost to operate the
Contributory Pension Fund [CPF] initially paid
through the Consolidated Fund. A recharge is
made to the CPF in accordance with the Contributory Pensions Act 1970 section 3(3).
• The recharge for the 2023/24 is budgeted at
$3.694 million, a decrease of $116,000 in the
original budget for the CPF over the prior year .
This decrease is mainly the result of an
$82,000 decrease in the budget for vacant positions and a decrease of $34,000 in other
overhead costs.
Madam Chairman, for the fiscal year 2023/24
the following activities are slated for the department:
An Actuarial Review for the CPF is planned for
this year. A review is required every three years per
section 35 of the Contributory Pensions Act 1970. This
review aims to indicate the financial condition and longterm sustainability of the fund and to investigate the potential financial implications of future contributions and
benefit increases for the fund.
To utilise the government’s portal to service
public inquiries. One of these projects will be to implement an online look -up for social insurance numbers.
Currently, residents who do not know their social insurance number must call or email the department to find
out what their social insurance number is. The implementation of this look -up capability will reduce the calls
and emails to the department, which will allow the staff
to focus on core tasks. This is just another example of
the continued deployment of technology throughout
government to drive effi ciencies.
Continue work on having all applications available online in keeping with the Government’s paperless
initiatives. This includes registration and changes,
again reducing the need for staff to manually process
changes so that the focus can be on core tasks and
enforcement.
Increase the PR campaign to raise awareness
of rights and responsibilities under the CPF, the UK Reciprocal Agreement and war veterans’ legislation.
To work alongside the Ministry Headquarters in
the development and implementation of the reform of
the social insurance system to transition from a flat rate
for all contributors to one that is based on a percentage
of income, boosting take- home pay for low -wage workers while making sure the social insurance fund is sus-tainable for the long term.
Continue to conduct orientation sessions for
newly registered employers as these have proven to be
invaluable. And they will be working with the Ministry of
Finance to create a no- hold strategy to specifically target the collection of outstanding contributions owed to the CPF and the government as a whole.
Establish more cross -ministry initiatives to develop supportive strategies to close existing gaps in legislation that allow persons to avoid payment of obli-gations to government. Continue to monitor the departmental strategy
initiative to maintain continuity and alignment with the Government’s overall vision.
The department will embark on a successionplanning exercise where current employees will be given the opportunity to be professionally developed
and cross -trained. We also intend to have a trainee
management accountant to ensure that the finance function is intact if drastic changes would occur. And
also the completion of the management consulting services review of the department and the implementation of their recommendations.
Madam Chairman, the public officers in the Department of Social Insurance are to be commended for their commitment to provide service to the local community and overseas beneficiaries as they have operated unders taffed for some time.
The Ministry of Finance and the Department of
Social Insurance and its staff would like to express our
gratitude for the invaluable contributions made by Ms.
Karen Daniels -Ming during her tenure as Director of the
Department of Socia l Insurance. Her retirement on the
31
st of December 2022 marked the end of over two decades of dedicated service to the Bermuda Government. We wish Ms. Daniels -Ming all the best in her future endeavours and we thank her for her outstanding service to the B ermuda Government.
I would also like to thank the Director and team
of the Department of Social Insurance for their work in
this important area, and will now move on to Head 38,
the Office of the Tax Commissioner.

HEAD 38 —OFFICE OF THE TAX COMMISSIONER

Sen. Arianna Hodgson: Madam Chairman, the estimates for Head 38, the Office of the Tax Commissioner,
begin on page B -117. The total projected revenue for
2023/24 is approximately $726 million which is a sub-stantial increase from the current y ear’s original estimate of $627 million. The OTC’s total budget allocation
for fiscal year 2023/24 is $4.756 million. This comprises
$3.901 million in current account expenditure, and
$855,000 in capital expenditure.
Madam Chairman, the primary responsibility of
the Office of the Tax Commissioner is to effectively administer the timely and accurate collection of all taxes
and stamp duties in accordance with applicable legislation. The OTC’s vision is to be a significant contributor
to Bermuda’s prosperity and stability by being a progressive, modern tax administration committed to providing superior customer service, continuous improvement and collaboration.
The OTC’s mission is To leverage modern
technology to ensure taxpayers’ compliance through
quality service and effective enforcement .
Madam Chairman, the OTC is strategically divided into four cost centres as follows:
• The Administration Team, 48000, provides the
overall direction and management of the office


Bermuda Senate which includes strategic planning, staff development, training and general office support.
• The Stamp Duties team, 48050, is responsible for the administration and collection of stamp
duties under the Stamp Duties Act 1976. This
includes the adjudication and processing of a
variety of legal instruments including but not
limited to conveyances, transfers, leases and
mortgages, as well as administering the Pri-mary Family Homestead Designation Programme.
• The Audit and Compliance Team, 48070, is responsible for ensuring that taxpayers are compliant wit h the Tax Acts throughout the life of
the taxpayers starting with their initial registration. The team conducts audits and inspections
of the taxpayer’s books and records and is re-sponsible for knowledge management and taxpayer education.
• The Operations T eam, 48080, oversees collecting and reporting on all taxes under the remit of the OTC. The team maintains taxpayers’
accounts receivable balances, levies penalties
for late and insufficient payments, and is responsible for debt collection and enforcement.
Key achievements in 2022/23. Madam Chairman, fiscal year 2022/23 saw continued economic vol-atility resulting from the COVID -19 global health crisis.
These conditions were compounded by the effects of
the war in Ukraine which caused losses in government
revenue stemming from global sanctions against Russia, increases in the cost of energy and natural resources and further disruption in global food supplies.
The Government, therefore, committed to and delivered various forms of relief to the people of Bermuda
either through lump sum payments or reduced tax
rates.
As in previous years, payroll taxes continued to
account for a substantial portion of government reve-nues, and we have seen increases in payroll tax revenues during the past two fiscal years due to the improved collection efforts from the department and the
continued recovery of the economy and the strongest
growth in IB that we have seen in 15 years despite what
the Opposition may want the public to believe. This increase has been achieved despite payroll tax receipts
for these years being impacted by relief granted to certain sectors experiencing financial hardship due to the
global economic climate and last year’s tax reductions
for all workers making under $96,000.
Payroll tax relief covering hot els, bars, restaurants and some retailers was originally implemented in
fiscal year 2020/21 and was extended through the 30
th
of September 2022. A further extension of relief was
granted to hotels and restaurants through the 31st of
March 2023. Likewise th e payroll tax rebate programme implemented this fiscal year provided financial
relief for workers earning $96,000 or less. The OTC staff worked diligently with Ministry personnel to distribute benefit payments to workers who met the programme eligibility r equirements while continuing with
overall day -to-day demands.
The revised payroll tax estimates for 2022/23
are projected to be $480 million, or 43.2 per cent of the
total estimated revenue. This is an increase of $20 mil-lion, or approximately 4 per cent, over the previous
year’s actual payroll tax receipts of $460 million.
Madam Chairman, it is important that the increase of $20 million is despite the fact that 86 per cent
of businesses in Bermuda will see their tax liability decrease next year, with sma ll businesses paying up to
43 per cent less payroll tax. Additionally, 86 per cent of
workers in this country (all of those making less than
$132,000) will pay less in payroll tax next fiscal year
than they paid this year. Those are the sound fiscal pol-icies of a Government that is committed to supporting
small business and workers, unlike the party that proposed to introduce a new tax on health care services
and reintroduce TA [travel authorisation] fees.
Madam Chairman, other key amendments to
tax legislation administered by the OTC in fiscal year
2022/23 included [the following]:
• Amendments to the land tax regime to eliminate inconsistency in the regime and to provide
land tax relief for nursing homes and residential care homes.
• Amendments to the Stamp D uties Act 1976,
which eliminated unnecessary three- year residential requirements for first -time homeowners.
• Establishment of a pre- qualification process for
first-time homeowners to receive exemptions
from stamp duty thereby eliminating the need
for eligi ble buyers to advance funds for stamp
duty as part of the purchase, and clarification of the stamp duty exemption for the refinancing of mortgages.
• Amendments to the Payroll Tax Act 1995 to ensure consistency in the tax treatment amongst
employers in the hospitality sectors of gratuities paid to employees and the treatment of
payments made to contributory pensions,
health insurance or approved schemes with respect to self -employed persons and deemed
employees.
Madam Chairman, in fiscal year 2022/23 the
OTC continued to focus on modernisation of processes
and technologies. The OTC improved its business in-telligence reporting capabilities enabling the department to have a more accurate view of taxpayer compli-ance. By improving its access to and use of information
from legacy systems, the OTC has substantially increased its efficiency and effectiveness in tax administration which has resulted in better tax collections.
Collection of tax arrears has been a major priority for the OTC during the past year and, as such, the OTC has identified the Debt Management section as a
162 15 March 2023 Official Hansard Report

Bermuda Senate key area within the department for implementing improvements to operations, infrastructure and reporting
systems. The department was able to leverage the new
OTC data warehouse and best practices for debt management to complete a review and analysis of out-standing tax debt with a focus on identifying uncollectable debt and prioritising debt collection efforts. The insights discovered during the analysis resulted in increased efficiencies that hav e facilitated more successful debt collection.
Madam Chairman, this outcome enables the
OTC to identify taxpayer non- compliance faster and to
take the necessary actions to address the non- compliance earlier, thereby minimising the risk of increased tax arr ears for many taxpayers. More specifically, improvements to address underlying issues that can lead to increase in tax arrears include the following:
• Identifying at -risk taxpayers early when they
show indications of financial difficulty in paying
their taxes and helping them establish payment
instalment plans at an earlier stage.
• Enhancing the capabilities to form ongoing
monitoring of the debt collection process
thereby enabling the OTC to better track the ef-fectiveness of debt collection and to adjust as
needed to improve debt collection efforts.
• Better tracking of non- compliant taxpayers
which allows for faster initiation of debt enforcement activities, thereby increasing the
likelihood of successful collection of the tax
debt.
• Filing claims aga inst non- compliant taxpayers
who refuse to engage with the OTC and enter into instalment plans to eliminate their out-standing tax debt.
While the OTC is committed to working with
taxpayers to establish payment plans and avoid having
legal action taken against them, the agency has begun
working more effectively with the court in relation to
claims for recovery of outstanding taxes.
Madam Chairman, during the upcoming
2023/24 fiscal year the goals for debt management are
to
• ensure the limited resources of the OTC are focused on those collection and compliance efforts that are most likely to be successful;
• ensure that all debt collection activities are performed within a consistent process, time and framework;
• increase successful enforcement action, such
as an increase in court appearances for those
taxpayers who are financially able yet refuse to
be complaint with tax laws; and
• collect at least $7.5 million of outstanding debt.
The goals and improvements to the Debt Management section, including those t hat are currently being implemented, are intended to help facilitate greater
taxpayer compliance and greater success in enforcement efforts at the administrative level. Madam Chairman, continuation of debt collection and other changes related to revenue g eneration,
in addition to a record cruise season that is predicted this year, [will] provide a base support for projected increase of revenues of more than $726 million, which is nearly $100 million more than the current year original
estimate of $627 mill ion.
As detailed in the 2023/24 Budget Statement
several legislative changes are proposed for implementation in the upcoming fiscal year that are anticipated to
increase the revenues generated by the OTC to the projected level. [They are as follows:]
• Stam p duty rates will increase by 5 per cent.
• Land taxes will be increased by 5 per cent for
high-value properties in the top two bands of
applicable land tax rates to generate approximately $2.4 million.
• Changes to the maximum amount of annual remuneration su bject to payroll tax will result in
an increase $100,000 over the current maximum level of $900,000 to $1 million.
• The table of standard rate bands will be revised
to reflect the higher tax full remuneration level .
Accordingly , the number of taxable remuneration brackets will be increased from four to five
and tax able remuneration of more than
$200,000 will be separated into two different
bands which will then comprise the top two annual remuneration bands.
• Finally, Madam Chairman, changes to applicable marginal tax rates for employees will facili-tate the collection of increased revenue from employees with higher remuneration. In particular, band 3 will be changed to relate to taxable remuneration between $96,001, and $200,000
will be subject t o a tax rate of 10.0 per cent.
Band 4 will be revised to taxable remuneration
between $200,001 and $500,000 and will be
subject to a tax rate of 11.5 per cent. And the
newly established band 5 will apply to taxable
remuneration between $500,001 and $1 mill ion
and will attract a tax rate of 12.5 per cent.
Madam Chairman, payroll tax revenues for the
upcoming fiscal year are projected to rise to $512.5 million. This represents an increase of approximately $59
million, or 13 per cent , over the original 2022/23 estimate and nearly 7 per cent above the revised estimate
for the current fiscal year. The projected rise in payroll
tax revenue is supported by both increases to marginal
payroll tax rates for employees in the 2023/24 fiscal
year, continued economic grow th and the decision to
maintain existing rate levels for exempted employers.
Meanwhile, Madam Chairman, other changes
are intended to reduce tax burdens on employees and employers in certain circumstances, entrepreneurs engaged in certain trades and more generally for local
businesses. They will have the reduction of the appli-cable marginal tax rate for the lowest annual remuneration band from 1.5 [per cent] to 0.05 per cent. It will


Bermuda Senate result in decreased tax liability for most of the workforce. Payroll tax r elief for employers with employees
on maternity and paternity leave will be provided up to 13 weeks in the case of maternity leave and up to five
days in the case of paternity leave. This relief may be particularly helpful to employers incurring costs aris ing
from the use of temporary employees or outsourcing
arrangements during the regular employee’s period of
leave.
Changes to applicable payroll tax rates for employers will provide widespread payroll tax relief to local businesses, hotels, restaurants, retailers, self -employed farmers and fishermen. As provided in the
Budget Statement, the following changes will occur:
Businesses with an annual payroll of up to $200,000
will see their payroll tax rate move from 1.75 [per cent]
to 1.0 per cent, reducing their payroll tax liability by
43 per cent. Businesses with an annual payroll of
$200,000 to $350,000 will see their payroll tax rate move from 3.5 per cent down to 2.5 per cent, which reduces their liability by 29 per cent.
Businesses with an annual payroll of $350,000
to $500,000 will see their payroll tax rate move from
6.5 [per cent] down to 5.25 per cent, resulting in payroll
tax liability being reduced by 19 per cent. And businesses with an annual payroll of $500,000 to $1 million
will see their payroll tax rate move from 9.0 per cent to
7.5 per cent, reducing their payroll tax liability by
17.0 per cent. Businesses with an annual payroll of $1
million or more will see their payroll tax rate move from
10.25 per cent to 10.0 per cent, reducing their payrol l
tax liability by 2.0 per cent.
Self-employed farmers and fishermen will see
their payroll tax rates move from 1.7 per cent to zero
per cent, eliminating the employer payroll tax liability
completely. Education, sport and scientific institutions will see their payroll tax rate move from 1.75 per cent
to 1.0 per cent, reducing their payroll tax liability by
43 per cent. Qualifying retail businesses will see their
payroll tax rate move from 7.0 per cent to 6.0 per cent,
reducing their payroll tax liability by 14.0 per cent. And
hotels and restaurants with an annual payroll of
$350,000 or more will see their payroll tax rate move
from 6.0 per cent to 5.0 per cent, reducing their tax liability by as much as 17.0 per cent.
Additionally, Madam Chairman, and I thi nk the
Senators in the Opposition will appreciate this. The maximum purchase price for which first -time homeowners can prequalify for exemption from stamp duty will be increased from $750,000 to $1 million. In addition, all first -time Bermudian homeowners will benefit as the
rate will now be marginal. Similar changes are being
applied to mortgages which are being refinanced.
These changes are intended to accommodate changes
in market conditions within the real estate market that
now sees even first -time homeowners paying up to $1
million for a home. We will also fulfil our promise to
make housing more affordable. During the debate to eliminate the residency
requirement and enable pre -qualification of the exemption from stamp duty for first -time homeowners, a t least
one Honourable Member suggested that we consider
increasing the maximum purchase price for purposes of this exemption due to increased sale values. And as
we often say, we are a Government that listens. We
heard the request; we considered the issue and we are
responding as appropriate because that is what a Gov-ernment that listens does. Our record in this area is
sound and we will continue to press forward to ensure that first -time homeowners get relief and that those who
want to transfer their mort gages to more competitive
rates at other banks also get relief. We look forward to debating that amendment at a later date.
Madam Chairman, in fiscal year 2023/24 the
Office of the Tax Commissioner will continue its work on modernising its technology, reporting capabilities
and operations to support effective debt collection, improve customer service, and successful resolution of
taxpayer noncompliance. The OTC budget allocation
for 2023/24 is $4.756 million. This includes $3.901 million in current expenditure and $855,000 in capital expenditure. The capital expenditure budget will be used to complete the OTC data warehouse analysis application, and to support further improvements and modernisation efforts within the department.
For fiscal ye ar 2023/24 the OTC salaries
budget has been reduced by 4 per cent, or $108,000,
as part of the department’s cost -cutting measures. And
the funding allocation for professional services has been reduced by 21 per cent, or $98,000, also as part
of cost -cuttin g measures. The investments in technology will ensure that these reductions will not impact the work of the OTC in improving its tax collection efforts.
Madam Chairman, I would like to thank the
staff of the Office of the Tax Commissioner for their hard w ork and for their dedicated service to the Government and to the people of this country.
I would now like to move on to Head 39, the
Registrar of Companies.

HEAD 39 —REGISTRAR OF COMPANIES

Sen. Arianna Hodgson: Madam Chairman, I now present the budget f or Head 39, the Registrar of Companies Department, found on pages B -121 through B -124
of the Budget Book.
The Registrar of Companies has been allocated a total budget of $9.45 million, up $1,938,000
from the previous year.
Madam Chairman, the Registrar of Companies
is government’s third largest revenue generating department and is projected to collect approximately $76
million of revenue in fiscal 2023/24. Its operations are
regulated by several legislative mandates, including but
not limited to the Compa nies Act 1981, the Limited
Partnership Act 1883, the Exempted Partnerships Act
1992, the Limited Liability Company Act 2016, the
164 15 March 2023 Official Hansard Report

Bermuda Senate Overseas Partnerships Act 1995, and the Government
Fees Regulations 1976. These provide the framework
for maintaining the Regis trar of Companies and the
timely collection of associated registration fees.
The department is also responsible for the administration of liquidations and personal bankruptcies
as well as the regulation of Bermuda’s real estate and
dealers in high- value goods sectors. The legislative
framework for the Registrar’s mandate in this capacity is the Companies (Winding- Up) Rules 1982, Bankruptcy Act 1989, Bankruptcy Rules 1990, Real Estate
Brokers’ Licensing Act 2017, Real Estate Brokers’ Licensing Regulations 2 017, and the Registrar of Companies (Supervision and Regulation) Act 2020, respectively.
In recent times Bermuda has been impacted by
ever-increasing pressures and imposed requirements
from other jurisdictions or regions, mounting challenges
from our competitors and increasing scrutiny from
global and regional standard- setting and oversight bodies such as the Organisation for Economic Co- operation and Development [OECD], the Financial Action Task Force [FATF], the Caribbean Financial Action
Task Force [CFAT F] and the European Union oversight
bodies.
This changing landscape has driven the Registrar of Company’s evolution as a regulator and this
legislative mandate has been underpinned by the Reg-istrar of Companies (Compliance Measures) Act 2017
and the Econo mic Substance Act 2018. Indeed, Bermuda’s implementation of the Economic Substance regime is closely monitored and reviewed on a regular
basis by both the EU and OECD.
Similarly, FATF and CFATF have looked to the
Registrar of Companies to enhance its AML/ ATF [Anti -
Money Laundering and Anti -Terrorist Financing] compliance framework with respect to legal persons as well
as in the real estate and dealers in high- value goods
sectors as the competent and supervisory authority charged with their oversight.
Still in the regulatory lane, beneficial ownership
is another evolving space with policy positions emanating from the UK, the EU, the OECD, the IMF [International Monetary Fund] and FATF, and commitments have been made to both the EU and the UK. Beneficial
ownership also features prominently in Bermuda’s
AML/ATF and economic substance regimes of which
the ROC [Registrar of Companies] has been designated to oversee, as well as OECD regimes for which
the treaty unit is currently responsible.
Madam Chairman, desp ite external pressures
Bermuda’s corporate register remains resilient. The total number of new companies and partnerships on the
Register continued to show marginal growth in 2022,
ending the year at approximately 16,000.
The Registrar’s mission [statement ] is To leverage technology to enhance user experience and to facilitate regulation, accurate data collection and anal-ysis. The department’s mission and objectives can be
found on page B -21. The objectives are as follows:
1. To maintain the Register of Compan ies and
ensure the provision of current and accurate registry information in a timely manner;
2. To ensure compliance with the Companies Act 1981 and related legislation in a consistent, fair and judicious manner;
3. To collect company fee revenue pursuant to the Companies Act 1981 and other associated
legislation in accordance with financial instructions in a timely, accurate and efficient manner;
4. To process all company applications from the private sector in a timely, efficient and professional manner;
5. To provi de technical advice to the Ministry of
Finance and other government departments in
a timely manner;
6. To provide guidance and direction to the pub-lic on matters related to the Companies Act
1981 and related legislation in an accurate,
timely and professional manner;
7. To diligently administer court -appointed company liquidations and personal bankruptcies in
a prudent and professional manner ensuring
compliance with applicable legislation, primarily the Companies Act 1981 and Companies
(Winding -Up) Rules 1982;
8. To promote and ensure compliance with the
Companies Act, Partnership Acts, Limited Liability Company Act and the Economic Sub-stance Act through active compliance monitoring and enforcement supported by the Registrar of Companies (Compliance Measures)
Act [2 017] in accordance with FATF and
OECD and EU standards and recommenda-tions; and
9. To promote and ensure compliance with dealers in high -value goods with the Registrar of
Companies (Supervision and Regulation) Act
2020, through active compliance monitoring
and enforcement in accordance with FATF
recommendations and Bermuda’s legislative
framework.
Madam Chairman, the department has been
active this current fiscal year and some highlights include the following: The e- registration system. The new
e-registration system has greatly increased the department’s speed to market by reducing the processing timeframes for applications. Users can now conduct
searches from the convenience of their home or workplace thanks to the upload of approximately 7,500 di gital files into the online registry system. The transition to a paperless workplace for corporate transactions is
steadily advancing.


Bermuda Senate Most businesses in the corporate sector have
already registered on the Registrar of Companies’ portal. Currently there ar e over 7,000 registered users and
nearly all applications are now made using the online registry system. Yes, Madam Chairman, this Govern-ment does continue to invest in technology to ensure
that service provision is more efficient and user -
friendly.
Insol vency and Liquidations. The department
added two full -time staff and one support staff to facilitate the administration of court ordered liquidations and
personal bankruptcies for which we have been appointed over to facilitate faster processing.
In terms of Real Estate, the department continued implementation of a compliance inspection plan for
the real estate sector to ensure Bermuda continues to
meet its international AML/ATF obligations during the global pandemic. They adopted strategies to address
Bermuda’s AML/ATF national action plan items, which
involved collaboration with other supervisory authorities in active engagement with the real estate sector through webinars to enhance their understanding of
their obligations, and also successfully complete d numerous live webinar trainings on money laundering
through the property sector and information sharing with a focus on understanding the problem of money
laundering through real estate.
Compliance. The department began the implementation of the Economic Substance Compliance
Programme in keeping with Bermuda’s commitment to
cooperating with the European Union and the OECD in the implementation of the International Tax Governance standards. They also successfully completed the
monitoring assessment conduct ed by the OECD’s
FHTP [Forum on Harmful Tax Practices] secretariat.
They successfully participated in the OECD cybersecu-rity assessment and began the implementation of the Corporate Governance Compliance Programme.
Madam Chairman, the Registrar of Compani es
is pivotal to the continued success of the international
and domestic business sectors in Bermuda and stemming risks related to the EU’s Annex I and Annex II (the
black and grey lists) for non- cooperative jurisdictions
for tax purposes, the EU’s AML lis t and the FATF high -
risk jurisdictions, subject to a call for action. Bermuda, consistent with its reputation as a quality international
centre, is committed to having a robust and comprehensive risk -based compliant framework with adequate
resources to giv e it full effect. This budget proposes to
provide the increased resources for the effective imple-mentation of the department’s expanded mandate and
to appropriately address the significant threats that Bermuda is facing.
Madam Chairman, as mentioned previ ously,
the estimates for the expenditure overview is up $1.938
million to $9.54 million. And the budget for the Registrar
of Companies is set out under six cost centres:
• Policy Planning and Administration;
• Finance and Revenue; • Entity Registration;
• Insolv ency and Liquidations;
• Real Estate and Licences; and
• Compliance.
The total current account expenditure found on
page B -122 and is estimated to be $9.54 million for
2023/24. This represents an increase of $1.938 million, or 25 per cent more than the origi nal budget of 2022/23.
This increase is primarily due to the additional resources required by the Registrar of Companies in support of its extended role to enforce compliance under the Economic Substance Act, the Companies Act and
other relevant Acts.
Cost centre 49000, Policy Planning and Administration. The estimate is up $2.049 million to $6.3
[million]. The Policy Planning and Administration cost centre includes planning, strategic direction, admin-istration and other activities associated with the dail y
operation of the Registrar of Companies Department.
Information technology, financial and administrative
support, budget development, accounting, personnel
administration and general office administration are
also included in this cost centre.
Expenses under this cost centre include the
salary of the Registrar and all operational costs of the department. The budget increase of $2.049 million for
this cost centre for the fiscal year 2023/24 will primarily
be used to boost the human resource needs of the department in order to facilitate the Registrar’s expanded mandate. The department has completed a comprehensive review of its operating structure and staff
needs. This increased budget represents an investment in additional resources to provide the required
manpower needs while the full -time staffing options are
advanced and onboarded.
With the continued increase in personnel the
Registrar of Companies has outgrown its current office
space located at the Government Administration Building. The Estate section of the Ministry of Public Works
has identified alternative accommodation for the Reg-istrar’s offices and is currently negotiating terms with
the landlord. The rental costs for this new accommoda-tion are included in these estimates.
Cost centre 49010, Fina nce and Revenue. The
estimate for 2023/24 is $740,000, which is down $105,000 from the previous year. The Finance and Revenue cost centre is responsible for the collection of
the annual fees submitted by companies in accordance
with the Companies Act 1981, the Segregated Accounts Companies Act 2000, the Partnership Act, the
Limited Liability Company Act 2016 and the Real Estate Brokers’ Licensing Act 2017. The Registrar of Companies historically has collected approximately
$68 million in revenue annually. T o ensure adequate
controls around completeness, accuracy and timeliness of collecting revenue, the section staff and processes come under the direct oversight of the departmental comptroller.
166 15 March 2023 Official Hansard Report

Bermuda Senate Cost centre 49020, Entity Registration. The estimate for 2023/24 is $764,000, again down from the
previous year. This cost centre includes 10 persons involved in the registration of companies and the processing and maintenance of statutory and legal docu-ments which must be registered and available for public
inspection in accordance with the prevailing legislation.
The cost decrease under this cost centre is minimal.
Cost centre 49040, Insolvency and Liquidations. The estimate for 2023/24 is $366,000, no change
from the previous year. This cost centre is responsible for the execution of court orders to administer liquidations in accordance with the Companies Act 1981, the
Companies (Winding- Up) Rules 1982 and personal
bankruptcies in accordance with applicable provisions of the Bankruptcy Act 1989 and the Bankruptcy Rules
1990. Expenses under this cost centre primarily en-compass the salaries of three full -time staff. Other expenses include the cost of various professional services, including legal/accounting contracts, et cetera, in
administering court appointed corporate liquidations
and personal bankruptcies. The estimated revenue for
this cost centre, reflected on page B -123, is $894,000
which is the balance of the total estimated revenue
mentioned earlier.
Cost centre 49050, [Real Estate and Licences].
Estimate for 202 3/24 again at $290,000, the same as
the previous year. This section is responsible for the processing and issuance of licences and permits to exempted local and overseas companies to carry on business in Bermuda, the processing and issuing of li-cences to and the regulation of real estate brokers and
agents, and ensuring industry compliance through active monitoring and enforcement. Expenses under this cost centre include the salaries of three persons.
Cost centre 49080, the estimate for 2023/24 is
at $1.08 million, down $3,000 from the previous year.
The Compliance cost centre is responsible for encouraging and ensuring compliance via powers executed
through the Registrar of Companies (Compliance
Measures) Act 2017 and other relevant Acts, most notably the Economic Substance Act 2018, and the Companies Act 1981. It includes the adherence to filing, reg-istration and other corporate governance requirements of the relevant Acts, to inspect registered entities for the
aforementioned purposes and to investigate i nstances
of a registered entity’s failure to comply with the provisions of the Registrar of Companies (Compliance
Measures) Act 2017 and/or any other relevant Acts.
The Compliance Unit is being enhanced as a
consequence of the requirements placed on Bermud a
by the European Union and the OECD. It is the expectation of these international bodies that Bermuda does
not only have sufficient people to fulfil its compliance
requirements, but that those resources have adequate
prerequisite skills and training. Cons equently, the existing compliance posts are being amended to recruit
an increased number of technically proficient individu-als. Expenses under this cost centre include 11 per-sons. The human resource needs in this section may
be further supplemented through external resources
with the required skill sets.
I now refer to page B -122. As a result of the
previously mentioned expansion in the department’s
compliance function, professional services has seen a
net increase of approximately $1.78 million. These
funds will be utilised in expanding the compliance team
and funding the increased policy development costs
associated with the interpretation and implementation of activities related to the Registrar of Companies’ compliance regime. Additionally, $240,000 has been estimated for rental of appropriate office space. Madam
Chairman, there are no other significant changes between the budget estimates for 2022/23 and the
2023/24 fiscal years.
I would now like to touch upon the revenue
generated by the Registrar of Companies. These figures can also be found on page B -123. The department
is forecasting overall revenue just over $76 million. This is a 13 per cent increase in projected revenue over the
original revenue estimate for 2022/23. In 2020, the
Registrar undertook a review of the department’s corporate fee structure and identified potential fee
changes that will expand its revenue base. The department initially proposed to introduce these f ees in October 2021. Following consultation with key stakeholders
the proposed fees continue to be reviewed and modified, and their introduction was delayed.
In line with the Registrar’s increasing regulatory function the department intends to implement a
new corporate regulatory fee in 2023/24. This fee is
proposed to be applied as an annual fee payable at
$150 for local companies, and $500 for non- local companies. This initiative is expected to add $6 million of
revenue. Additionally, the Registrar will implement a 5 per cent increase in transaction fees and will introduce new fees for transactions currently being per-formed at no cost. These changes will provide the additional expected revenue for 2023/24 and will come
into effect from the 1
st of April 2023. The new fees and
rates will be updated in the amended Government Fees
Regulations 1976.
The department’s budget supports an establishment of 37 full -time equivalent positions (found on
page B -123), and the importance and need for further
increases in r esources to meet the increasing external
threats has already been highlighted. Addressing these
threats is critical to protecting key sources of revenue
for the Bermuda Government, which in turn allows us
to provide public services to the public. The depar tment
must have the resources to ensure that Bermuda’s cor-porate citizens are in compliance with Bermuda legislation related to the carrying on of business in Bermuda
and from within Bermuda. Additionally, roles that were
previously performed by contracted resources in managing insolvencies and liquidations are to be converted


Bermuda Senate into substantive posts to generate greater operational
oversight, efficiency and most important, cost savings.
I would now wish to turn to the new electronic
registry system. In step with this Government’s continued modernisation efforts the department introduced its
online economic substance declaration platform in May
of 2020 and implemented its full online registry system
in June of 2021. This system now provides real time
access t o publicly accessible company data and has
streamlined the registration process.
The Registrar of Companies has been allocated $1.6 million in capital funding for expanding the
functionality of the system to include the beneficial
ownership register and t o provide for other improvements in system efficiencies. These improvements were initially expected to be completed in the current
year; however, some development work has been de-ferred and the previously approved funding carried forward to 2023/24. Madam Chairman, the new system is
similar to those already in use in other jurisdictions and
will assist in maintaining Bermuda’s competitiveness with other international registries.
Madam Chairman, the department has now
become a bona fide regulator, having evolved from its primary purpose as a repository for corporate filings. As noted previously, international pressures being exerted
on our jurisdiction has meant that the department had
a need to review its organisational structure and re-sources to stay ahead of various international sanctions that could be detrimental to our local economy. The initial planning and structuring work has been com-pleted, and over the year we expect to the see the implementation of that plan with the robust bolstering of
resources and an appropriate amendment to the organisational function.
In the revisionary view of how the department
will deliver services to not only address international regulatory bodies, but also the need for Bermuda to be
a more responsive jurisdiction in whic h to do business,
the department is reviewing the legislative framework
around several key initiatives to make enhancements.
These include amendments to section 129A of the
Companies Act 1981 to remove the requirement for a
licence for digital asset business licensed companies so as to be in line with the Government’s vision that
Bermuda be a test bed for innovative technologies and
FinTech, and amendments to apply to penalties for carrying on business without a 129A or 114B licence.
Second phase, modernisi ng amendments for
various pieces of legislation administered by the Reg-istrar to accommodate the electronic registry so as to
ensure that the legislative framework reflects the department’s ability to work in a paperless virtual environment. With respect t o Bermuda’s economic substance
regime, the department plans to continue their engage-ment with both the OECD and the EU with respect to level-setting amendments to the Economic Substance
Act. Additionally, as the compliance regime for eco-nomic substance dev elops, the department is reviewing possible amendments to the Registrar of Compa-nies (Compliance Measures) Act 2017 to streamline
the enforcement process.
Reduction of red tape by replacing antiquated
legal processes that require companies to incur legal
fees for routine interactions such as corporate leasing
of office space. The Bermuda Government has committed to implementing beneficial ownership disclosure
in line with the European Union’s anti -money laundering directives, the United Kingdom and the Financial
Action Task Force commitments.
The Registrar of Companies has been tasked
with designing and implementing a beneficial owner-ship register and disclosure framework transitioning the
existing register and process from the BMA [Bermuda
Monetary Authorit y] throughout 2023/24. The ROC will
work with the BMA to ensure that key activities surrounding the vetting and due diligence processes are
transferred over appropriately. The Registrar of Companies will also review and enhance the existing legislative requirements to support these commitments and
to ensure alignment with the changed FATF recommendations relating to beneficial ownership, while also
building out an electronic portal which will allow entities
and external stakeholders to access relevant information where appropriate.
Going forward, the Registrar of Companies will
have ultimate responsibility for receiving and publishing
information on beneficial ownership. Every eligible registered entity will be obliged to file details on beneficial
ownership with the Registrar of Companies. The Registrar of Companies will publish the information after
they are satisfied that the information is consistent with
its requirements. Such information will be accessible by
all relevant regulatory bodies, and the ROC will also implement appropriate monitoring for compliance with the
regulatory obligations.
Proposed outputs are as follows:
• increased disclosure among registered legal
entities in the new electronic beneficial ownership register portal;
• transitioning of beneficial ownership filings by
companies for the purpose of achieving ap-propriate related transparency objectives; and
• streamlined legislative regime through harmonisation of existing relevant exchange control
and beneficial ownership obligations. And that also reflects the most current FATF recommendations.
Technology has now become an integral part
of how the department operates. Consequently, over the year further enhancements are expected to be
rolled out by the department with the following:
• the establ ishment of a new website that will
improve user experience and additional automation of applications and requests ;
• implementation of the liquidations and bankruptcy module of the registry system which
168 15 March 2023 Official Hansard Report

Bermuda Senate will facilitate online processing of corporate insolvency transactions ;
• development of an electronic platform for the
receipt of real estate licence applications to
enhance efficiencies and streamline pro-cesses; and
• the full migration of all entity data onto the eregistration system and elimination of physical
files from the workplace, creating a setting that is as close to being paperless as is practicable.
Madam Chairman, I would like to extend my
appreciation for the work undertaken by the Registrar
of Companies ; to the entire manageme nt staff of the
department ; and to t he Registrar, Mr. Kenneth Joaquin,
who has gone above and beyond ensuring that this department delivers for Bermuda. He is an exemplary
public officer and a credit to this Island.
Thank you, Madam Chai rman, as t his concludes my remarks on the Registrar of Companies .
And I now move on to . . . I believe it is my final
head. We are almost there. Yes, Interest on Debt and
Guarantee Management.

HEAD 58 —INTEREST ON DEBT AND GUARANTEE
MANAGEMENT
Sen. Arianna Hodgson: Madam Chairman, the
2023/24 budget allocation for Interest on Debt, Head
58, is $130.4 million. Of this estimate, $129.5 million
represents ongoing debt service costs for the various
debt instruments held by the Government of Bermuda,
while $400,000 is allocated to facility fees and other related costs. The remaining $500,000 is for the costs as-sociated with the management of government’s guarantees.
Madam Chai rman, a key achievement in
2022/ 23 was the successful refinancing of almost $1
billion in debt which was due to mature within an 18month period. As interest rates began to rise, Bermuda was able to get into the market and issue debt at extremely tight spreads. This execution di d increase our
interest expense by just over $2 million. However, it must be noted that the government will repay $50 mil-lion of debt this year , which will see annual payments
reduced in the next fiscal year.
Madam Chai rman , moving on to the amount
budget ed for guarantee management, significant work
was done in fiscal year 2022/23 to assess financial commitments relating to the proposed redevelopment
of the Fairmont Southampton Hotel. For 2023/24, additional funding has been allocated to support these final efforts toward documenting this $400 million project to
bring a close to project financing and to facilitate commencement of construction in the first quarter of the fis-cal year 2023/24.
Madam Chairman, all such actions related to
government guarantees c ontinue to be executed diligently, consistent with this Government’s commitment to ensuring appropriate and effective risk management,
maximisation of economic benefit and prudent economic and fiscal management, all while supporting economic growth.
Madam Chairman, additionally, funds are being set aside to continue the work required to ensure
that the Morgan’s Point project is developed in a manner that will be cost -effective and of maximum economic and social benefit to the people of Bermuda. As noted previously, it has already been necessary to expend considerable resources on this project. But addi-tional funding is required to progress all activities for
this project to the Morgan’s Point Development Company Limited. In future years this expense will be nearly
eliminated.
In conclusion, Madam Chairman, I wish to
again thank all of the teams who are part of the Ministry of Finance. I would like to thank them for their dedication and professionalism. There have been many challenges faced over the past year , but they have all persevered. This submission has highlighted the various threats and challenges that face Bermuda. But we will
continue to proactively address these matters to ensure
that Bermuda remains on a path to continued stability
and security. We remain committed to serving and protecting the people of Bermuda through fiscal prudence and effective management of our resources.
Thank you, Madam Chairman.

Great. Thank you.
Madam Chairman, I will turn to the guarantees
on page C -30, which I believe we would classify under
Head 58 at table C -30, or at the bottom of page C -30.
My first question is, I understand that last year
there was a $2.5 million guarantee for something called the InnoFund and agreements into that by the Government. I would like to understand what happened to that
guarantee. Why has it gone away? Because I do not
think we heard anything about that in the briefs.
There is the casino gaming guarantee at $9.8
million, and if you h eard my remarks earlier, I am quite
sceptical that this commission will have any means of


Bermuda Senate paying it. It seems to me to be a guarantee that is almost certainly going to come due. I would like to understand how the Government’s analysis of that —or what
their analysis of the likelihood of that happening is, or
by what means they feel that the Gaming Commission could support itself?
Continuing on [with] the guarantees, I think this
might be a typo. So I would like confirmation. The Mor-gan’s Point/Caroline Bay guarantee is in there, but I understand it has been resolved, paid off. So, if the Government could confirm that this line should perhaps not be in the table, I would appreciate that.
Moving on to the Hospitals Board guarantee, I
do know that the hospital has a $30 million credit facility
with Clarien. I believe I got that from the financial statements. Would that be inclusive in that $758 million? Or
would that credit facility be a separate piece of guaran-tee?
And then we also heard in the Budget Statement that the Government had failed to fully pay the $322 million a year agreed hospital fees. I would like to understand what impact that might have on the amount
of the guarantee or not? And if that has put any of that
guarantee at risk?
I think those are my questions on the guarantees.
I would like to move on to page C -4 under Capital Development. And this would be under the Ministry
of Finance Headquarters, so that would be, I think it
was Head 10. (Let me just confirm.) Yes, Head 10, on
page C -4. We see the Bermuda infrastructure fund and
the actual capital expenditures there to end of 2022 are
$2.9 million. I would like to understand the details of
what that was for. I think it is some sort of fees or inter-est, and if it is, I would like to understand the capital
amount or investment amount to which the fees and in-terest are on and to whom it was paid.
I guess I might pop back to page C -30 actually.
I did not quite complete my questions on the guaran-tees. And I see the $50 million mortgage guarantee.
Now, Madam Chairman, I believe if I read this right, that would cover up to $250,000 per mortgage. So if I have
got my math right, that could be up to 200 mortgages
that this could cover. And I remember from the Budget Statement we are up to nine. So I wonder, does the
Government anticipate that this full amount of that will
actually get taken up? And over what time period it
would take to fully utilise that guarantee amount? If it is
not going to be utilised, perhaps we should reduce it.
As you said, ther e were issues with having these liabilities that might come due.
I could keep going with questions. Or perhaps
I might provide opportunity for some others to ask ques-tions while I look through my notes, Madam Chairman.

Thank you, Senator De Couto.
Would any other Senator wish to speak on
these heads? We have until 7:02.
Sen. John Wight: Thank you, Madam Chairman. Just
a few questions.
Page B -106, Head 10 for the Ministry of Finance Headquarters. Perhaps the Junior Minister could just expl ain the BMA of profits, account 8885, just a
clarification on how that works. I know that the BMA I
think declared a profit recently for the past year of —I
think it was $10 million. So I am just wondering whether
the surplus from that somehow comes back into a government account or what the policy is for that? So that
is one question.
Head 11, page B -109. I may have missed this.
But under Employer Overheads, there is a projection of
a reduction of $5 million year -on-year. Even on the salaries, relatively s peaking, similar year -on-year. So I am
just wondering why there would be such a significant
decrease in employer overheads if the salaries are sim-ilar year -on-year?
My third question on page B -112 is under the
performance measures. The business unit 21100, Con-solidated Reporting, the preparation of summary financial statements of the Bermuda Government targeted
outcome for the coming year is not achieved. So I am
just wondering why the government is expecting not to
achieve the preparation of its summary f inancial statements?
I just have a couple more. I will just ask one
more, page B -117, the Office of the Tax Commissioner.
One of the department objectives is to procure and implement a new tax administration information system. It
has been discussed that this Global Minimum Tax issue could be very significant for Bermuda if it is adopted. Have there been monies expended or do we have to wait until we actually see whether it comes into
effect, when and what the rules are?
So I will leave those as my questi ons, Madam
Chairman. Thank you.

Thank you, Senator Wight.
Does any other Senator have any other questions before—sorry. I am seeing Senator De Couto look
as if he has some more.
Senator Smith.

Sen. Ben Smith: Yes. Thank you. I just have one quick
question.
Under Head 12, I know that the Junior Minister
was talking about the sugar tax and how there are go-ing to be some changes within the sugar tax and what those differences would mean in the reduction of costs .
I am just wondering if they have done an analysis of, if these changes have been put in place, for revenue from
sugar tax over the last year, what the difference would
have been? Because obviously these are fees that the
public has been paying for items that now we realise
should not have been under the sugar tax regime.
So it would be important for the public to know
what that difference is. How much overall was kind of
collected in tax that really should not have? Because it
170 15 March 2023 Official Hansard Report

Bermuda Senate was not impacted by the act ual items that we were trying to change. So if the Junior Minister could give us
some clarity whether that analysis has been done and
what the difference in that price would have been?
Thank you.

Thank you, Madam
Chairman. And actually, I did want to apologise. I was
remiss to [not] say that I did appreciate the effort that
the Junior Minister took to get the brief and give us this
opportunity to ask [questions]. It is not taken for
granted.
I also actually —Senator Wight did cover quite
a few of the same questions I had. So I will look forward
to those [answers].
I am going to turn to page C -30 again. I guess
technically this would come under the Debt Manage-ment. And I am looking now at the table at the top which
shows the sinking fund and the revised 2022/23 estimate at $245 million, where it is estimated to go down to $152 million at the end of this year.
Now, I understand that we will be paying down
$50 million of outstanding debt from that. But I think that only accounts for about half of the reduction. So I would
like to understand where the other half of the reduction
in the sinking fund is going to be spent? So that would be a question.
And I actually wanted to go back to the BCB
[Bermuda Commercial Bank] mortgage guarantee. You know, I have had some informal conversations with
people in the banking industry that leads me to believe they had actually been interested in participating in this
programme. So I do have two or three questions on that
programme. Were other banks contacted and offered
the ability to participate in that programme? Have any
of them come back and requested since the n for an opportunity to join the programme after the initial programme was launched? You know, you might see that
perhaps —perhaps some banks might say, Actually, we
would like a chance. And we would come back and
make a different answer. I would like to un derstand
that.
And I would like to understand why the civil
servants are given access to this programme, but not the public in general? So those would be two of my questions related to that.

[Pause]

I would like to turn to page B -113 on the Customs. A nd I notice that the GPO Customs duty is predicted up $120,000, but courier package fees are pre-dicted down $235,000. And I am curious if these are
somehow connected, or what the explanation is? Are perhaps more packages coming through MyBermudaPost and therefore paying customs at GPO instead
of at the private couriers? Or is there some other explanation of that? So I would like to understand that.

[Inaudible interjection]

Sure.
Page B -113, GPO Customs Duty (8009), which
I presume is customs duty at the post offices, predicted
up 23 per cent, or $121,000, whereas 8117, Courier Package Fees, is predicted down 20 per cent, or
$235,000. And I would like to understand what is behind those predictions and are they connected to the
MyBermudaPost service? For example, growth in that
service would perhaps attract customs duty at the post office versus fees and duties that would be coming through the private sector businesses.
The Junior Minister did actually address in her
brief a few of my questions. So I am just checking those to make sure I do not ask them again.
I would comment on page B -116. This is sort of
the collection of the debt, the outstanding social insurance payments. And to be honest, I was a little confused because they only seem to be targeting—well,
last year they only seemed to forecast to collect about $900,000 and now they are targeting $2.8 [million], which I guess is a big improvement. I am curious why
so little, on a relative basis, was collected last year.
I might take a pause there, Madam Chairman.

Thank you, Senator De Couto.
Would any other Senator care to speak on
these heads?
Senator John Wight.

Sen. John Wight: At the risk of the Junior Minister regretting giving time [for questions], I w ill ask one more
question.

[Laughter]

Sen. John Wight: But I do really appreciate it. Like
Senator De Couto said, we greatly appreciate the time to ask some of these questions because this is very helpful for us.
But my last question, I promise, is at page B -
125 under Debt and Loan Guarantees. There is a pro-fessional services charge of $5.2 million. That was the revised figure for 2022/23. And only $500,000 for the
coming year. I am assuming that maybe she can clarify
for me that those would have been maybe receiver fees
from one of the big four firms who had provided those
services on Morgan’s Point? But now with the formation
of the new government company (I will put it that way)
those costs are going away? Again, that is just an assumption I am making, but if the Junior Minister can
clarify that for me, that would be very helpful.
Thank you.


Bermuda Senate The Chairman: Thank you, Senator Wight.
Would any other Senator care to speak on
these heads?
So in that event, Senator Hodgson, we have
time for you to answer the questions posed. Thank you.

[Pause]

I see that Senator Smith does have a
question while we are waiting.
So, Senator Smith.

Sen. Ben Smith: Yes. Thank you, Madam Chairman.
We have talked about the collection of the
taxes and t he taxes that have been unpaid for some
time. I know that there was a company that was hired
to bring in taxes, and they were actually really success-ful during the period that they were collecting taxes. I
am wondering of the Junior Minister can let us kno w
whether another outsourced company is going to be
brought in considering how successful that company was in the period that they were able to collect taxes?
Because obviously the collecting of those taxes will be
important for us. So whatever is going to be needed in
order to do that, if it is getting an outside company, is
that what we will be doing to see the increase in numbers that is stated in the Budget Book?
Thank you.

Thank you, Senator Smith.
Senator Hodgson.

Sen. Arianna Hodgson: Thank you.
So there were a lot of questions. And I will do
my best to answer them. The responses of course will
not be in the order received. But I would like to get
through as many as we can.
One of the shorter questions that I can provide
a simple answer to is regarding the $2.5 million guarantee of InnoFund that Senator De Couto was referencing. The short answer is that the guarantee has
been repaid. So that is why it is no longer included.
Again, you had asked about the Morgan’s
Point/Caroli na Bay guarantee being paid off. The short
answer is that the loans were repaid. But for legal reasons, we keep it in—the retainer, I guess, the guarantee amount —on our books.

Thank you.

Sen. Arianna Hodgson: So the Government did not
pay on the guarantee. It actually elected to purchase
the tranche B and C loans. That was in order to satisfy the demand of the guarantee. Although it is now owned
by the government, the tranche B and C debt still exists.
And they actually have the potential to be disposed of
at a future date. And that is why the government’s guarantee has not been form ally extinguished at this time.

Thank you.

Sen. Arianna Hodgson: Senator De Couto had asked
a question about the $30 million credit facility that exists with the Clarien for the Hospitals Board and had a question about whether or not that was inclusive in the
$758 million. The answer is no, it is not included.
This is a bit of a more lengthy response to provide some clarity about the profits in BMA and how the
surplus, I guess, moves. So the response actually
comes from the General reserve, section 8 of the Ber-muda Monetary Authority Act 1969. It states [at section
8(1)] that “ The Authority shall establish and maintain a
General Reserve to which, subject to subsection (2),
there shall be transferred at the end of each year an
amount representing the net profit or from which there
shall be deducted an amount representing the net loss
of the Authority after taking into account the expenses of its operation and after provision has been made for
bad and doubtful debts, depreciation in assets and
other contingencies.”
It goes on to say:
“(2) Transfers to the General Reserve . . . shall
be made in the manner following:
“a) so long as that Reserve amounts to
less than 10% of the demand liabilities of the
Authority at the end of the year in which any net profit was earned the whole of such net
profit shall be transferred to that Reserve;
“b) so long as that Reserve is equal to or
exceeds 10%, but is less than 15% of such liabilities, there shall be transferred to that Reserve one half of the net profit or such smaller
amount as will make the Reserve equal to fifteen per centum of the said liabilities;
“c) where that Reserve is equal to or exceeds 15% of the said liabilities, further transfers may be made with the agreement of the
Minister.
“(3) Where any net profit remains after provision is made pursuant to subsections (1) and ( 2) the
Author ity may, with the approval of the Minister, apply
any portion thereof for the purpose of subscribing the paid up capital of the Authority and the remainder of
such net profit shall be transferred to the Consolidated
Fund.
“(4) If in any year the Authority should make a
net loss which exceeds the amount of the General Reserve at the end of that year, a sum equivalent to the
amount by which such net loss exceeds that Reserve
shall be paid to the Authority from the Consolidated
Fund.
172 15 March 2023 Official Hansard Report

Bermuda Senate “(5) For th e purposes of subsection (2), ‘demand liabilities’ does not include demand deposits
placed with the Authority which consist of public funds.”

Okay.

Sen. Arianna Hodgson: I always look to this side of
the room.

Sen. John Wight: Thank you again, Junior Minister. I
think I understand the concept. Thank you.

Sen. Arianna Hodgson: Okay.
There was commentary based on page B -112
and the note that the preparation of summary financial
statements has not been achieved. Essentially, with not
all of the audits of the public authorities making up the
GRE, which is the government reporting entity, up t o
date, it is not practical to attempt the consolidation at
this time. And this is one area where the Accountant
General is actually working closely with the Auditor
General’s Office and the public authorities to address these types of issues.
I have not gotten the specific numbers pertaining to the sugar tax and reduction of costs. But I know that extensive analysis has been done and was prepared, particularly through the pre- budget process
when we were having these conversations. So I am
sure that further details will be forthcoming in the legislation that we will shortly roll out.
There was some question about the failure to
pay the $322 [million] and the risk for the Bermuda Hospitals Board. And I cannot go into details. But what I
can say is that the Government is working closely with
the hospital to ensure that appropriate funding is available going forward.
There was some mention of the new tax administration information system. I think that was Sena-tor Wight as well. He was asking about whether or not
we were waiting for the requirements of the global minimum income tax to come into force before we see the
implementation. And essentially the Office of the Tax
Commissioner has been making steady progress in its
efforts to prepare the department and t o make those
transitions to research and eventually procure and implement the new tax administration information system.
This would definitely allow for new global minimum income taxes. So I know that there are a lot of moving
parts right now. There is a l ot of uncertainty. And as we
move forward in these next few months, we are expecting that clarity to come.

Sen. John Wight: Thank you. [Pause]

Thank you. In Head 38,
with the Tax Commissioner, I would like to understand how the Government arrived at the target figure of $7.5
million for the debt collection and not perhaps a higher figure. Thank you.

[Pause]
Sen. Arianna Hodgson: It is quite a short answer. But
there was a question about the means by which the
Gaming Commission will be able to support itself. And
essentially , we are making some changes in terms of
the legislative framework. And we are exploring additional options for banking in this space.
I am sorry. There was one other part about the
question about the Bermuda Hospitals Board and renegotiating the guarantee. And again, the short answer is
that the renegotiation of the Bermuda Hospitals Board
guarantee is not deemed to be a realistic option at this
time.
There were questions about outsourcing the
debt collection function. And the short answer is that
we are not considering an outsourcing function at this
time. I think we are really focused on getting clear on
our policies to ensure that we collect outstanding revenues and fees that are owed to the government at this time. And it is interesting because it is our people, you
know, who owe the government the money. And it becomes challenging to figure out, I guess, the best way
to move forward, especially considering the high cost
of living at [this] time. But it is something that must be
addressed if we are to continue to make the progress
that we need [to make] to balance the budget by the
next fiscal year.
There were some questions. You had previously asked about the banks and their desire to participate in the Mortgage Guarantee Programme. From
what I can remember, the banks simply were not inter-ested at that time. The Bermuda Commercial Bank was
the one who was able to take us up on the offer and
move forward. I would suspect that, you know, we were
in constant contact with the banks. And if they had a desir e to participate in this programme, I am sure that
would be communicated to the great team that we have at the Ministry of Finance.

Senator Tucker.
Sen. Robin Tucker: Thank you, Madam Chairman.
I just have one question. And it comes from
page B -112 under Consolidated Reporting, business


Bermuda Senate unit 21100. I am just curious to know, under the performance measure it says Preparation of summary financial statements of the Bermuda Government. And for
the fiscal periods 2021/22, 2022/23 and 2023/24 the result is not achieved. So if the Junior Minister could just
check some information around that, that would be
helpful.
Thank you, Madam Chairman.

Sorry, Senator Smith. I did not see you.

Sen. Ben Smith: No problem. Thank you, Madam
Chairman.
Just a follow -on from the response that the
Junior Minister gave regarding the outsourcing of the tax collection. Considering that the unlicensed company that was able to collect a lot of tax revenue within a short period of time, did the Government learn anything about their methods in that process? Because that number was so significant compared to other years that this particular company was able to do what they
can now use going forward considering we are not going to outsource going forward. Did we learn any tactics
or methods that we will now be using from a government perspective to make sure that we are collecting the tax? Thank you.

Sen. Arianna Hodgson: And the short answer is definitely. That is why you know we are making all of the
efforts to streamline the process to see how far we can
go in terms of revenue collection. You know, some of
us do not want to be stopped at the airport. Some of us
want to be able to relicense our cars. But this is some-thing th at we are definitely focused on in this fiscal year.
There was a question about the target figure of
the $7 million for debt collection. And essentially the number was arrived at by looking at the current collections and obviously the recent histories, and simply
making projections going forward. Essentially, we are just looking at the most efficient and effective ways to
enhance collections for government. That is also the
reason we are making sure to make all of the necessary
legislative changes to best protect the public purse, as
we like to say.
I am still going through the questions to see
which bits I can provide some briefing for.
There was a question about a reduction of $5
million, yet the employee count remains the same year -over-year, [from] S enator Wight. And essentially the
short answer is that there are ebbs and flows in staffing and therefore the change reflects those changes.
Sen. John Wight: Thank you.

It was more a comment
on the payroll tax collection.
Because the employer has collected for the
government and [not] paid it, the employer does not pay the government. They in fact are stealing from their employees. So I appreciate that there c an be tough times
for companies, but I do not think we can really support businesses that are taking money from their employees and using it to fund business operations instead of paying the payroll tax. Thank you.

Yes, if I might follow up
actually on the most recent question that Senator Wight
raised about, Why are overhead or pensions and health
insurance going down, but salaries and wages are going up? And I appreciate the comment about the ebbs
and flows. But it seems to me if we are going to reduce
the amount that we are budgeting for . . . that is called
the overheads, based on the ebbs and flows. I am a
little bit at a loss as to why we do not budget the s alaries
and wages to be comparable since they seem to me to
be directly linked.
And I appreciate there may not be an answer
to that question. I work in a large organisation, and sometimes the left hand and the right hand do not do
the same thing. But I would perhaps highlight it as an
area for improvement. Thank you.

[Pause]

Sen. Arianna Hodgson: [Microphone off]