An OBA portrayal of the economy, and a PLP portrayal of the economy… are they different?

Very much so, the Shadow Finance Minister would argue.

Dr Douglas De Couto used his reply to the 2025/26 Budget to present his party’s own economic report, and suggests that overall GDP growth and the low unemployment rate hide ‘troubling trends’ – that growth is driven ‘almost solely by International Business and Financial Services’.

(ABOVE: Highlights from Dr De Couto’s economic comments in the Budget Reply; BELOW: OBA’s full Reply to the Budget)

Dr. De Couto told the House today that Bermuda’s economic growth from 2017 to 2023, at 8.7% GDP adjusted for inflation, lagged behind the US (13.9%) and the world (16.8%), only beating the Euro area (6.7%).

He adds that more than three-quarters (76.1%) of Bermuda’s GDP growth over the period was driven by International Business, rising to seven-eighths (87.4%) after adding in other Financial and Insurance activities.

Dr De Couto says that the local economy – or everything apart from IB and Financial Services – only grew by 2% – far below the overall 8.7% GDP growth.

“That is essentially no growth at all”, he said.

“Fewer people and fewer jobs”

Saying that Government loves to cite the low unemployment rate, Dr De Couto suggests this is driven by “fewer people and fewer jobs”.

Citing the November 2023 Labour Force Survey, he says youth unemployment was four-times the national average at 13.5%.

“The reality is that the number of people has shrunk faster than the number of jobs”, Dr De Couto suggests. “Government has outsourced our unemployment, as people who can’t find work have been emigrating.” 

According to Employment statistics, Dr De Couto says that while overall employment in Bermuda fell by 793 jobs from 2017 to 2023, Bermudian jobs fell by 1,438, while the non-Bermudian share grew by 787 jobs.

“All those missing jobs are for workers under 55 – who should be the backbone of our workforce”, he said.

“The largest increase in jobs is for workers over 65, presumably they have been unable to retire due to the cost of living.”

Dr De Couto adds that IB and Financial Services pay had risen by 6%, while all other jobs combined had risen by 1.8% – all while the overall cost of living had risen by 2.4%.

Immigration

Citing the “critical underlying issue’ of the number of people living and working in Bermuda, Dr De Couto said, “we should consider it an urgent national priority to make it more attractive for young Bermudians to return home, for Bermudians and people working here to stay here, and for new people to come to Bermuda.”

He says immigration is ‘understandably a controversial and emotional topic’, and that it has been ‘cynically manipulated’ as a political tool by the current Government.

Dr De Couto called for a ‘good-faith engagement’ over our population issues. “It’s easy for Government to say what they won’t do” he said, “but we’re more interested in hearing what they can and will do to solve this problem.”

Tax Cuts

The OBA is disappointed that Government has not scrapped the sugar tax, Dr De Couto says, and suggests Government should also cut or target the Foreign Currency Purchase Tax.

“Since all of our goods are purchased from overseas” he said, “this adds 1.25% to the cost of all goods, including essential goods, purchased by Bermudians.”

“The FCPT disproportionately impacts those who earn the least, and pay a higher fraction of their income on necessities.”

“In general, the One Bermuda Alliance would adjust tax reductions to be targeted to those most in need.”

Local Economy

After spending most of the Budget reply criticising the current Government’s management of the economy, the Shadow Finance Minister said the One Bermuda Alliance would put primary focus on improving the local economy.

He stated, “in areas ranging from the Office of the Tax Commissioner, Planning, Immigration, and numerous other departments that businesses work with, businesses need a responsive and friendly Government that provides the required services efficiently.

“Now that the Public Service has received a pay rise, the public will be looking for the promised increase in morale, performance, and effectiveness from Government departments.”

Dr De Couto said the OBA hoped to see duty breaks for retailers, but Government is instead encouraging more overseas purchases by raising the duty-free allowance for individuals.

Citing tourism as a sector with a variety of job and entrepreneurial opportunities, Dr De Couto said the OBA would “ensure that the Bermuda Tourism Authority is working well, and independently of political interference”.

While the OBA did not support the scope of concessions and guarantees given to the Fairmont Southampton, “the horse has left the stable”, he says, and the OBA would “ensure that tourism concessions are awarded consistently and with accountability for targets such as numbers of Bermudian staff hired, or amounts invested.”

‘Hollow claims of fairness’

In closing, Dr DeCouto said the OBA’s reply to the Budget “shows just how hollow the Government’s claims of fairness really are, as businesses and Bermudians in the local economy continue to struggle, and cost of living outstrips whatever small pay increases people are getting.”

“We’ve shown how Bermuda’s biggest challenge is our shrinking and emigrating population, which the Government continues to ignore.”

“We’ve debunked the Government’s financial performance – the parts of it that have been good are riding solely on IB.”

Dr De Couto said the approach and ideas of the One Bermuda Alliance would allow youth to “dream of their future here at home in Bermuda”.

“A Bermuda where the pie grows to feed us all, not a Bermuda where we are fighting over a shrinking one.”

READ THE FULL REPLY TO THE BUDGET HERE.