Finance Minister Curtis Dickinson echoed a familiar warning today when he told MPs that “Bermuda’s aging population, a certainty, not just a risk, will result in serious medium and longer-term pressures on public spending and challenges to growth”.
Delivering his first-ever maiden Budget Statement in the Lower House this morning, the Minister said: “This is perhaps the single most serious long-term issue Bermuda faces.
“It will not be possible for the Government to meet its obligations to our retirees and pensioners without significant structural reforms to our economy,” said the Minister.
“We must have more Bermudians working in Bermuda and have more jobs located in Bermuda to ensure we collect the revenue necessary to fund our pensions and care for our seniors.”
While noting that the most recent census “throws these issues into sharp relief, suggesting a sharp rise in the old-age dependency ratio in
the near future” he added: “While demographic trends are, by their nature, slow-moving and may not be immediately visible to the public, this is perhaps the single most serious long-term issue Bermuda faces.
Speaking on Bermuda’s domestic economy, the Minister also countered the narrative “advanced that Bermuda is in a recession”.
“The facts simply do not bear that out,” said Mr Dickinson.
“Over the last several months we have seen signs that Bermuda’s economy is improving.
“Many of the major economic indicators – such as employment, construction, and air visitor arrivals and spending, increased in 2018, indicating some improvement in the Bermudian economy.
“However, while we are seeing some evidence of growth, there are other indicators showing signs of softness that may have a negative impact on economic growth.”
On the issue of employment, the Minister noted that “preliminary data from the 2018 Employment Survey indicates that “the total number of jobs in Bermuda grew by 144 from 33,653 in 2017 to 33,797 in 2018, a 0.4 percent increase”.
“The year 2018 represents the third consecutive year in which there has been an increase in the number of jobs available in Bermuda,” he said.
“Much of the growth was fuelled by an increase in jobs filled in the construction and hotels sectors, which added
131 and 105 posts respectively.
“The report also showed that there were employment increases in the following sectors: retail trade and repair, real estate and rent, business services, public administration, education, health and social work, and, most importantly, international business.
“These increases were offset by declines in transport and communications which shed 69 jobs, and other community and social and personal services, which shed 57 jobs. Other losses in positions occurred in agriculture, forestry and fishing; electricity, gas and water supply; wholesale trade and motor vehicles; restaurants, cafes and bars; and financial intermediation.
“One of the major headwinds in our growth prospects is the level of employment,” he added.
“Although employment numbers are marginally positive, the pace of job growth must increase if we are to have a sustained economic recovery.
Employment income “decreased by $16.4 million to $2.61 billion, a modest decrease of 0.6 percent”.