The nutshell:

Government is planning on spending just under $1.2 billion over the next year, while raking in just under $1.1 billion. It will borrow the difference of about $89 million. About 16 % of its estimated spend will be vaporised by interest payments on Bermuda’s $2.5 billion debt, leaving just over $1 billion for services and capital needs.

Here are the key points

Economic outlook

• Economy remains stagnant although there were some modest signs of strengthening due mainly to the America’s Cup
• Unemployment rate remains at 7% – marginal job growth (0.1% or net increase of 40 jobs) last year
• Visitor arrivals and visitor spending up by 7.2% and 20.3% respectively
• Retail sector increases sales by 2.9% and jobs by 0.7%
• Imports increased by 17.6% in the first nine months of 2017 – mainly due to America’s Cup.
• Total value of new construction starts in the first nine months of 2017 increased by 517.8% – due primarily to St Regis and airport projects.
• Actual value of construction put in place declined by 7%
• Growth forecast for 2017 revised downward from 1.5%–2.0% to 0.75%–1.25%.
• Inflation stable at 1.9%
• Balance of Payments surplus strong – surges by $288 million over 2016 – at $672 million
• New international company registrations decreased by 1.1%

Personal Taxes

• Payroll tax expected to bring in $454 million in 2018/19, 41.7% of total Government revenues.
• Tax reductions for those earning less than $96,000
• Tax relief for new positions created in Bermuda
• End the notional salaries concept
• Tax relief for employers who hire disabled persons
• First year tax holiday for new businesses
• 50% reduction for taxi industry – to be paid by owners

 Customs duty

• Expected to bring in $234 million or 21.6% of revenue
• Sugar tax to be implemented
• Tax on certain veggies to be eliminated
• Duty relief for sports clubs with youth programmes
• Duty lowered for textiles
• Duty on tobacco and wine to increase

Other taxes

• Temporary 5% increase on land tax for commercial properties
• Increased fees for cell phones

Capital Spending

• Expected spend: $62 million
• Largest item is a $6.3 million loan repayment on Cross Island
• Bermuda Housing Corporation grant is $4.8 million
• Schools and roads maintenance $3 and $3.3 million respectively
• $3 million for new buses

Ministry Highlights

Education and Workforce Development

• Education gets $140 million, an increase of $5.8 million
• Senior schools get a $1.9 million boost
• Bermuda College gets $300k to support students in need
• $225k in new money for Workforce Development training programmes

Economic Development and Tourism

• $38 million budget – up $3 million
• BEDC gets $1 million in new money to expand its capacity to lend money for new businesses
• BTA grant = $26 million, increase of $1 million but conditioned on prioritising marketing

Health

• $190 million budget, up $27.3 million which restores $25 m subsidy for hospital care for children, indigent and seniors
• Another $1.8 million will go toward reopening fourth floor of Sylvia Richardson facility, more community health nurses, vector control, and the child health programme.

Legal Affairs

• $600k in new money brings the budget up to $27.7 million.
• more legal aid lawyers and three pupillages

National Security

• $131 million budget – a $2.1 million reduction by cutting overtime of uniformed services

Public Works

• $74 million, down by $1 million – to be saved by moving from rented premises to owned

Transport and Regulatory Affairs

• A $62 million budget
• $3 million for new buses
• $500k toward solar rebates for thermal units for seniors on low incomes
• $2.5 million to replace Doppler weather radar system

 

This article belongs to Politica ! The original article can be found here: Summary of Budget 2018 – Key points at a glance

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