Ministry of Finance Update 16 December

Wednesday, December 16th, 2020

Good afternoon.

Thank you for joining us today.

Bermuda certainly has seen our challenges recently with the increase in the number of positive cases of COVID-19. I would like to commend the team at the Ministry of Health and all of their stakeholder partners and front line workers for the significant work they are doing to stop the spread of the coronavirus here, and keep this island safe.

In my remarks today, I will cover three areas. They are as follows:

·         The Government’s new Unemployment Benefit;

·         The Framework of the 2021/22 Budget; and

·         The new Electronic Registry System for the Registrar of Companies.

The Unemployment Benefit

Let me start with Government’s recently announced Unemployment Benefit.

The COVID-19 Pandemic has had a significant impact on our community, especially on those who find themselves out of work on short notice and without an income as a result of this crisis. Providing emergency financial relief to these families, is a responsibility that the Government takes seriously.

The public will recall when the 18-week Unemployment Benefit concluded the Government quickly introduced a Supplemental Unemployment Benefit (SUB).

Due to recent increases in the number of confirmed cases of people with the coronavirus, on December 7th the Government introduced further precautionary measures to contain the spread of the virus. These measures, included the closure of bars, nightclubs and members clubs. These restrictions may cause affected employees to either temporarily lay off, or reduce the hours of their employees. Accordingly, the Government has reacted quickly to provide short-term financial assistance to affected employees and introduced a new unemployment benefit to those affected employees.

These benefit payments will pertain to verified employees of bars, nightclubs and members clubs who have had to close due to current COVID-19 restrictions. The total benefit for these persons will be $500 per week for the period that these restrictions are in place. The spirit of this benefit is to compensate individuals who work at these establishments and are unable to earn their ordinary compensation. The initial benefit of two weeks or $1,000 will be paid this week to individuals who have complete application submissions, including verification from their employer. The Government will revisit the restrictions on December 22 and may extend the benefit further if deemed necessary.

Due to speed with which the Government responded, an incorrect email address for employers and incomplete website address were posted…apologies for any confusion or delay this caused. Recent press releases have shared the correct contact information and explained the application process. We encourage all eligible employees and employers to take the time to properly follow the process to ensure payments are made on a timely basis. This information can be found on https://uba.gov.bm.

At this time I can confirm that we have approved 50 applications for this benefit and will be instructing the Accountant General to make payments to those individuals. Our team is currently assessing an additional 110 applications.

In addition, individuals who have been directed into mandatory quarantine or isolation by the Ministry of Health, and are unable to earn their ordinary compensation while under quarantine or isolation can also apply for this benefit. This benefit was already provided for in the original unemployment benefit and these individuals will be paid on a biweekly basis starting on 18 December. The benefit payout will be calculated at 60% of an individual’s remuneration with a maximum of $500 per week.

At this time I can confirm that we have received 63 applications for this benefit that are under review and a further 37 that are awaiting employer input.

We want to ensure that those persons in our community that need assistance receive it. Therefore if members of the public who have been impacted by the recent Health Regulations or have been forced to quarantine or isolate and are unable to earn their normal compensation I encourage you to fill out the application.

It is important to continue to help people through these challenging times and this unemployment benefit will provide temporary assistance to persons by providing financial support to meet their basic needs.

Again, please go to https://uba.gov.bm, for complete details on the unemployment benefits.

 

The Framing of the 2021/22 Budget

Preparing the 2021/22 Budget will be challenging given the unprecedented uncertainties in the context of the COVID-19 pandemic. As highlighted in a recent Ministerial Statement that I made in the House of Assembly, in fiscal year 2020/21 the Government has taken and continues to take unprecedented policy actions to redirect existing resources towards health and social support measures. These actions have required unbudgeted COVID-19 expenditures of approximately $125 million for this fiscal year. COVID-19 has also had a significant impact on Government revenues and the Ministry estimates that revenue yields for 2020/21 will contract by about 18.5% or $208.1 million. After factoring in the impact of COVID-19, and various austerity measures taken by the Government, the revised deficit for 2020/21 is estimated at $295.4 million.

Other factors which will impact the framing and composition of the 2021/22 Budget include:

·         Continuing deficits, high debt levels and the debt ceiling;

·         Government’s 2020 General Election Campaign Platform and the 2020 Speech From The Throne;

·         Economic considerations;

·         Taxation sensitivities;

·         Continuation of Zero Based Budgeting that will include a Public Service Value Assessment to provide for a better-quality portrayal of the range of services delivered by the Government of Bermuda;

·         Feedback from the Pre-Budget Report in advance of fiscal year 2021/2022;

·         Risks facing the country; and

·         The implementation of the Government’s fiscal strategy; which is to reduce net debt and balance the budget by 2023/24.

Like most small states and territories, Bermuda’s economy is highly vulnerable to external events, underlining the need for financial and fiscal prudence. This vulnerability is compounded by our continuing budget deficits and Government indebtedness. This vulnerability has now materialised in a far more rapid and powerful form than anyone could have expected with the onset of COVID-19.

The Government has to take a number of actions to address the problems the island faces, and it is important that stakeholders and citizens understand these vulnerabilities, have the opportunity to give their views, and are aware of the factors driving the Government's fiscal policy decisions.

Therefore, in keeping with our pledge on openness and transparency, we will continue with the process of releasing a Pre-budget Report (PBR) as part of the preparation process for the 2021/22 budget.

The objective of the PBR is to increase public awareness of a government’s fiscal and budget policy objectives, and to establish a benchmark for evaluating the conduct of fiscal and budget policy.

This will continue to ensure that our budget process is clear and transparent and our Pre-budget report will explain the factors driving the Government's fiscal policy decisions while also giving everyone the opportunity to make their views known during this period of uncertainty.

I can confirm that the Pre-Budget Report in Advance of the 2021/22 fiscal year will be released before the end of the year and we welcome all key stakeholders including you, the People of Bermuda, to fully participate in the process after the report is released.

 

Making Government more efficient - New Electronic Registry System for the ROC

An important part of the Government’s economic recovery plan relates to making the Government more efficient. To this end I am pleased to report on recent legislation passed which will make us more efficient in the area of company formation, an important part of the Bermuda economy.

I am referring to the Companies and Partnerships (Electronic Registry) Amendment Act 2020. This Bill amended the Companies Act 1981 and other legislation to provide the Minister of Finance with the authority to make regulations to require that all documentation under the relevant Acts be filed with, or issued, by the Registrar of Companies (ROC) is to be filed or issued electronically.

This legislation is important as it will provide the legal framework for a New Electronic Registry System for the ROC which will replace the existing, outdated obsolete systems which are no longer supported by vendors, and is extremely administratively burdensome and to some degree costly for industry and the Government.

The Registrar’s electronic system will be implemented in several phases beginning with some of the registration services available in February 2021. The remaining services will be made available over the ensuing months with the expectation that by summer 2021, the Registrar of Companies will be fully operating its electronic registration system.

Upon the full implementation of the electronic registration system, all filings required by the various pieces of legislation will be submitted via the electronic platform which will be hosted on the Registrar of Companies website. Certificates and notices required to be issued by the Registrar will be generated by the electronic registration system. This also means that all records that are required to be available to the public will be available for viewing online.

This initiative also aligns with the Government’s Paperless by 2023 Plan, and will provide quality public services in the area of company formation to address the needs and expectations of citizens and businesses.

In closing, I want to remind everyone that this recent uptick in cases means that we must continue to do our part – avoid socializing, especially outside of your bubble, download the WeHealth App and follow the public health guidelines.

I’d also like to wish all of you a Happy Holiday and a safe and prosperous New Year.

Thank you.

 

Feedback