Bermuda's Finance Minister Paula Cox a useless "cog in the wheel"
politicians last night reacted with surprise to the Minister of Finance's statement saying that she was a "cog in the wheel" and cannot overrule Ministries' requests for more money.
And they said more needs to be done to reduce Bermuda's debt and effectively manage the economy.
Earlier this week Mrs. Cox told the Bermuda Sun that Government would have to borrow money to meet its needs, adding: "Debt is a necessary tool in public finance."
But it was Mrs. Cox's comment that she cannot decline financial requests which has struck a chord across the Island. She wrote in the Sun: "The Minister of Finance operates as a cog in the wheel. My role is to add value and to provide input on fiscal positions taken in various ministries.
"I can indicate support or objection. However the sponsoring minister(s) knows that I cannot overrule their request unless I have others who join with me to support and uphold my position."
And she appeared to indicate that there have not been enough financial controls in place when she stated: "Cost overruns on projects are vexatious and are not taken lightly. Lessons have been learnt from recent experiences. Enhancements to controls that accord with best practices are in the pipeline."
Currently, Bermuda's net public debt, excluding the $200 million guarantee to Butterfield Bank, amounts to about $679 million. And Government's Consolidated Fund has received two back-to-back, qualified audits, with the current Auditor Generals citing cost overruns in unnamed capital projects as the reason.
Port Royal Golf Course is a capital project which was seen its cost jump from the original $7 million budgeted to a final cost of $15.9 million. The Dockyard cruise ship pier was originally estimated to cost $35 million but ended up costing taxpayers $60 million. Neither project was mentioned in the last two Auditor Generals' reports.
Yesterday, Shadow Finance Minister Bob Richards said the Minister was interpreting her role differently from previous politicians in charge of Bermuda's finances.
"I just don't know how she defines her job," he stated. "If she interprets it as a cog in the wheel then I guess that explains some of the actions that we have seen.
"I believe Finance Ministers should be able to exert their authority over other ministries when it comes to the Country's finances.
"I don't know how a person who cannot stand up to different opinions in her own party could be considered for the highest post in the Country? It is a conundrum."
And regarding enhanced financial controls Mrs. Cox said are in the "pipeline" Mr. Richards said: "I don't know what that means? There are supposed to be financial controls in place now. If she is introducing them now it appears there were no financial controls in the first pace, which is a scary thought! I am sceptical about her statement."
And he claimed Government's "laisse faire spending culture" went largely unnoticed when revenues were up thanks to international business, but now that revenues were down people were starting to realise "spending is out of control". He pointed to Government's decision to spend $800,000 on consultants to "reform" the Island's two municipalities as an example of Government's "we'll just find the money" approach.
Craig Cannonier, speaking on behalf of Bermuda Democratic Alliance, said the party was not convinced by the Minister's statements, particularly as cost overruns have happened over the last decade.
"This is not prudent fiscal management," Mr. Cannonier said. "The Alliance believes in Government that is fiscally responsible: careful in its spending, honest in its financial reporting and works for the betterment of our people. We have not seen this from the current Government.
"The Minister should have considerable control over other departments as it is the Ministry of Finance which should set departmental expenditure limits, yet Government debt has multiplied four and a quarter times over the last six years."
Mr. Cannonier said the Alliance welcomed tighter fiscal controls which Mrs. Cox said were in the pipeline, but added: "So far all we have seen is lip service to the concerns raised by the Auditor General and others. The solutions to correcting the problems have been suggested and ignored.
"The time for action is now. We must reign in spending as a matter of priority and public projects must be carefully monitored."
The $800 million missing from the consolidated fund is still nowhere to be seen.
Economist,Robert Stewart was right in his assessment of the debt at over $3 billion.
Larry Burchall says the debt was $198m at 31/3/07 and Paula Cox now says it is at least $679m. So in less than 3 years the debt has more than tripled.
Ms. Cox appears to have lost complete control of the public purse and the condescending rhetoric used against critics in previous years is coming home to roost. She was more than happy to accept accolades when the economy was booming, (the structure of which had been artfully crafted by a previous administration) although I would argue that it has been grossly mismanaged and allowed to overheat during her tenure, not to mention the capital project cost overruns and waste etc., but now that there is a significant downturn, it appears to be everybody elses' fault. I'm surprised that she hasn't blamed the UBP.
Ms. Cox must accept that she has been complicit in the economic woes that face Bermuda and that under her stewardship she has not shown the leadership, courage or integrity to stamp her authority on the fiscally responsible management of taxpayers' money.
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Bermuda, Hamilton, Bermuda