Mr Speaker, I rise today to provide this Honourable House and the people of Bermuda with an update on the Government’s financial performance for Fiscal Year 2023/24 arising from the extensive work done to prepare for the audit of the Consolidated Fund.
Mr Speaker, based on the work to date on the 2023/24 Consolidated Fund Financial Statements, the 2023/24 budget deficit is now projected to be $33.4 million, $10.1 million below the original estimate of $43.5 million. Revenue is projected to be $1.18 billion, $21.9 million above the original estimate of $1.16 billion. This increase is directly related to Payroll Tax collections, projected to be $541.7 million, $29.2 million above the original estimate of $512.5 million.
Mr Speaker, this revenue performance was delivered after this Government reduced payroll taxes for 86% of the island's workers and all local businesses. This result is a clear demonstration that our policies, which were not supported by the opposition, are benefiting working people and supporting a growing economy.
Mr Speaker, Current Account Expenditures are projected to be $986.5 million, 13.9 million above the original estimate of $972.6 million. It is worth noting that this figure includes unbudgeted items such as a $16.3 million subsidy grant to support BHB operations and $4.9 million to support negotiated pay awards for teachers and additional Substitute Teachers and Para-Educators. These unbudgeted Current Account Expenditures were offset by savings achieved throughout government departments due to firm budget control measures from the Ministry of Finance.
Mr Speaker, Interest and Guarantee Management costs are projected to be $126.1 million, $4.3 million below the original estimate of $130.4 million. Guarantee management fees totalled $1.3 million in 2023/24. The decrease in interest costs is related to the repayment of $50 million of Government debt in December 2023.
Mr Speaker, Capital Account Expenditures are projected to be $98.2 million, $2.2 million above the original estimate of $96 million. These expenditures include a $2.9 million deposit for the purchase of two new ferries, $6.1 million for new electric buses, $8.3 million for stabilisation works at Tynes Bay Waste Facility, $4.8 million for a new Asphalt Plant and $4.3 million in grant funding to Bermuda Housing Corporation to address the shortage of affordable housing.
Mr Speaker, it should be noted that this is the first time in some years that the Government has been able to meet the Capital Budget target, which is welcome news. All Honourable Members can agree that Bermuda’s infrastructure needs are great, and it is vital that funds budgeted are spent upgrading Bermuda’s infrastructure.
Mr Speaker, with these stats and figures, some may wonder what this all means. Put simply, it means that for yet another year, this government has effectively managed the country's budget and has once again exceeded budget targets, meaning that Bermuda’s financial position is stronger than forecast just five months ago.
Mr Speaker, I understand these statistics do not fit the negative narrative peddled by the opposition. That is why it is vital we share this information so that the public is aware of the facts and not politically biased rhetoric.
That said, Mr Speaker, this Government also understands there is still more to be done. We understand that economic growth, GDP statistics, or excellent financial performance do not mean much to a family struggling to make ends meet. This government is well aware of the need to do more, and earlier in this statement, I shared that last year’s budget deficit will be $10 million less than estimated.
Mr Speaker, since returning to office, we have stayed true to our commitment that as our economy and fiscal position continue to improve, we will provide further relief to Bermudians. Therefore, later today, I will table the Customs Tariff Amendment Act 2024, which will reduce the rate of fuel Duty for fuel used to generate electricity by 60%, from 20 cents a litre to 8 cents a litre.
Mr Speaker, this is a government of action, and when confronted with choices, our response isn’t, “Money doesn’t grow on trees.” Instead, our response is, “What can we do to help?”
This bill will be tabled under the Provisional Collection of Revenue Act and has been endorsed by Her Excellency the Governor to take effect from its first reading today. I would like to thank the Regulatory Authority staff for working with the Ministry of Finance to ensure this tax reduction can be implemented in time for next month’s billing cycle to reduce the impact of the recently announced increases in electricity rates.
Finally, Mr Speaker, this reduction is expected to cost the treasury approximately $10 million. Again, this government has positioned itself to take this action due to its strong economic performance and successful execution of our Economic Development Strategy.
Mr Speaker, this government is focused on building a Bermuda for the future. I look forward to returning to this Honourable House in September to ensure we keep our promise to invest even more in the social programmes required to confront the challenges on our island. However, Honourable members should note that this Government is only able to do more for our people due to our success in managing Bermuda’s financial affairs.
Thank you, Mr Speaker.