Statement by Scott Pearman, Deputy Leader of the Opposition:

Do you consider Labour Day to be the end of summer?  Perhaps not when the heat lingers into September and beyond.  Yet the holiday seems as good a date as any to turn the page to autumn.  Scientists might prefer the autumnal equinox.  For me, Labour Day weekend has that ‘end of summer’ feeling.

And this is true of the political calendar.  Labour Day sees a return to the business of politics, as politicians gather on the holiday Monday for a march around Hamilton, followed by speeches in Union Square.  This year has the increased intrigue of the PLP leadership vote, an upcoming internal election which has caused the PLP considerable internal strife.  As a political party, the PLP historically kept internal matters private.  Yet the current fracture between the two leadership factions is palpable.

REDUCING THE COST OF LIVING…

            Labour Day weekend also involves catching up on past editions of the Daily.  One Editorial (27 August) discusses the PLP’s disastrous plans for price controls.  Most will agree that price controls don’t work – more on that below.  Yet what caught my eye was the RG’s view that: “Although not all of her approaches make sense, [Minister Alexa Lightbourne] is at least looking for solutions to problems where many of her political colleagues, past and present, have either kicked the can down the road or washed their hands of any responsibility.”

            The Gazette’s reference to delinquent “political colleagues” must be to the Minister’s colleagues in the PLP.   Because the One Bermuda Alliance has already identified numerous solutions to tackle Bermuda’s cost of living crisis.

The OBA Shadow Finance Minister, Dr. Douglas De Couto, caused a ‘Take Notice’ Debate in Parliament focusing on economic “opportunities, challenges, and risks”, including the spiraling cost of living.  In the Debate, the solutions came (almost) exclusively from the Opposition.  Only two PLP MPs chose to speak.  One was MP Wayne Furbert.  The other, Premier David Burt, who remarked: “my comments will be all of two minutes long”.  Despite the PLP’s silence, the Premier was brash enough to conclude: “I promise you the debate has taken place.”  Really?  Or was the RG’s Editorial correct?  When the PLP addresses the cost of living crisis, their answer involves ‘can-kicking’ and ‘hand-wringing’.

            In contrast, it’s worth repeating the OBA’s solutions, with many OBA MPs highlighting the opportunity presented by the surplus in Bermuda’s new corporate income tax (CIT).  The CIT must be harnessed, not squandered.  Used to reduce Bermuda’s stifling debt, restore the crumbling infrastructure, and help those who most need help – particularly on social issues.  As MP De Couto emphasized: “I just want to repeat these three points, Mr. Speaker, because they are pretty important … Pressing fiscal needs, pressing infrastructure needs, and pressing social needs.”

Eight other OBA MPs spoke in the Debate, many focusing on CIT revenue being used to create new opportunities for Bermudians.  MP Dwayne Robinson pushed for growth in other local industries, including revitalizing tourism, citing AI’s potential impact on local jobs.  The point being that a strong economy – with meaningful and well-paying jobs – is necessary to meet rising costs.  My own contribution to the Debate recognized that: “The biggest challenge that Bermuda faces…is the challenge of affordability.  It is the challenge of the cost of living.  …  We are all being prevailed upon as leaders of this Island to try to identify ways to make this Island more affordable and to reduce the cost of living.”

And the OBA has identified ways to make Bermuda more affordable and reduce the cost of living, focusing on four major things people pay for every month: food; electricity; health care; housing.  In each case, the OBA has solutions.  Repeal the PLP’s sugar tax, to bring down grocery costs.  Reform the energy sector, to give the Regulator more ‘teeth’ to reduce electricity costs.  Increase our population, to drive down costs by more and younger people paying into our healthcare system.  Reduce the foreign currency purchase tax, to allow Bermudians to buy US dollars more cheaply to reduce the cost of imported goods.  This last one is a stealth tax, driving up the cost of living (and the PLP increased the tax).
            All these OBA solutions can and should be implemented.  Yet the PLP wants to march Bermudians down the dangerous path to price controls.

WHY NOBEL PRIZE ECONOMISTS DON’T LIKE GOVERNMENT PRICE CONTROLS?

If you’re interested in economics, you might have thought price controls were discarded long ago onto history’s trash heap of bad ideas.  That’s because interference in private-sector pricing often leads to fewer goods and job losses.

Don’t take my word for it.  Ask Professor Google: “Why Nobel Prize economists don’t like government price controls?”.  Friedrich Hayek (Nobel Laureate, 1974) dismissed price controls as a “pretence of knowledge” causing widespread waste and shortages.  Milton Friedman (1976) observed that government interventions generally fail to fix market problems properly.  Paul Krugman (2008) dismissed price controls as “economically illiterate policies that ignore basic supply and demand realities”.  So, generally a very bad idea.

And yet the PLP’s so-called ‘Cost of Living’ Bill wants price controls.  The Bill was rightly delayed by Senate concerns in July; the Bill returns for the final Senate vote on 14 September.  Bermudians needs this PLP Bill to implode.  The OBA has offered alternative solutions. And they make so much more sense.

Scott Pearman is the MP for Paget East (Constituency 22), the Deputy Leader of the Opposition, and Shadow Minister for Legal Affairs and the Municipalities.  He can be reached at spearman@oba.bm.