Bermuda Government presents near one billion dollar budget to Parliament

PREMIER DAVID Burt on Friday presented a national budget of US$992 million to Parliament indicating that the overseas British territory is on course to records its first budget surplus in more than 20 years.

“It is my privilege to state to this honourable House and the people of Bermuda that this Progressive Labour Party (PLP) government has successfully balanced Bermuda’s budget, with a projected surplus of US$210,000.

“This budget surplus is only the second budgeted surplus in 35 years. The last time Bermuda achieved a balanced budget was in fiscal 2002-23, but today, 21 years after that was last achieved, through the turmoil of a great recession and after being battered by a once-in-acentury pandemic, we will return this country to a balanced budget,” he told legislators.

Burt told legislators that projected revenue for the fiscal year 2024-25 is expected to reach US$1.23 billion, which is 6.6 per cent or US$76.8 million above the original estimates for this current fiscal year.

Capital expenditure for 2024-25 is forecast to be US$112.3 million, $16.3 million or 17 per cent more than the current year’s original estimate with the government indicating that this level of capital expenditure is the largest budgeted investment in capital since 2010.

Burt, who is also the Minister of Finance, said the his PLP government is anticipating revenue of US$750 million annually, on average, from the new corporate income tax.

He said US$40 million of unused borrowing would be used to fund new affordable homes and to freeze health insurance rates.

Premier Burt said that at the height of the coronavirus (COVID-19) pandemic in 2020, the government borrowed funds to “ensure Bermudian families in need could keep their lights on and had food on their tables”.

He said that at the time the government expected to accumulate US$408 million in deficits “prior to reaching a balanced budget”.

“However, due to our sound financial management, combined with significant economic growth, we only accumulated US$322 million of deficits over the last four years, leaving us with US$89 million more in the bank than we expected a few years ago.”

Burt said the funds the government borrowed in 2020 were sitting in an account earning interest and that the law requires that it can be invested or used to fund future deficits only.

But he said the government will seek to amend the Government Loans Act “to enable the transfer of funds from the excess borrowing account if those funds would not be required to meet deficit spending”.

He said it was the government’s intention to use US$40 million of the funds, with $30 million to be transferred to the Mutual Reinsurance Fund and $10 million to pay for more affordable homes.

“The government’s actuaries have advised the Ministry of Health that in order to keep up with health insurance claims, which continue to escalate due to our ageing population, the government will need to increase its health insurance rates by $45 a month.

“This government cannot and will not allow that to happen. Therefore, we intend to transfer US$30 million from the excess borrowing fund to the Mutual Reinsurance Fund to ensure that our health funds are able to pay claims without asking every resident in Bermuda to pay an extra US$540 a year,” he said.