“..the prospects for Bermuda are bright..”
The 2021 Bermuda Fiscal Responsibility Panel Report (the Report) has been completed and is published today. It is available on the Ministry of Finance section of the Bermuda Government portal. (www.gov.bm)
The Report represents the seventh annual report of the Fiscal Responsibility Panel (the Panel), which was established in 2015 as an international independent committee, to review, monitor, assess and publicly report on the fiscal progress of the Bermuda Government. The Panel is composed of a team of international experts, chaired by Jonathan Portes, a former government chief economist and UK Treasury official and now a professor in economics and tax policy at Kings College in London. The other members of the Panel are Marian Bell, a former external member of the Market Policy Committee at the Bank of England who also previously advised on fiscal matters to the Government of Jersey; and Victoria Perry, a US tax lawyer who recently retired from the International Monetary Fund, having spent many years providing technical advice to countries on tax policy and revenue administration.
The Report contains a comprehensive analysis of Bermuda’s fiscal and economic position, its strategy, and related actions. The Panel provided their assessments, highlighted critical risks facing Bermuda, and provided recommendations for several key areas impacting Bermuda's fiscal and economic outlook. These include fiscal and tax strategy, expenditure policy, the Economic Recovery Plan, Bermudians’ access to financing; Immigration, Health, Pensions and Climate Change.
The Panel endorsed key aspects of the Government’s fiscal and economic strategy, including the Government’s commitment to staying within the spending allocations for this budget year. The Report also noted that.on present plans, Bermuda was on track to remain within the new fiscal guardrails established in relation to the ratios of gross and net debt to GDP. The Panel also positively endorsed work being done with regard to the Economic Recovery Plan, immigration reform, and climate change. The Report also includes recommendations for consideration by the Government. These include the following concerning fiscal and tax strategy:
- Fiscal Strategy – should establish, in the next Budget, a set of time-bound objectives relating to revenue and budget balance after 2023-2024 and targeting a budget surplus of $50 million a year by 2026-2027.
- Tax Strategy –overhaul the tax system with a medium-term strategy which will move towards a more progressive tax system with a broader tax base, and appropriately take into account changes required as a result of the OECD Global Tax initiative.
The Review Panel noted that, “having now largely emerged from the worst of the pandemic, with the right policies, the prospects for Bermuda are bright. The potential of the island and its people should not be in doubt”. The Panel commended the potential of the island and its people. Although they recognized the nature and extent of current challenges, they stated that “policies to address them are being developed and were impressed by the sense of urgency on the part of the Government and the shared commitment of other stakeholders”.
Premier and Minister of Finance, the Hon. E. David Burt expressed his appreciation to the Bermuda Fiscal Responsibility Panel and those who contributed to the Report for their hard work.