Auditor General Heather Thomas says that “the need for the Government to practice strong financial planning and management has never been more important to help alleviate the ongoing economic impacts” as the Covid-19 pandemic continues.
A spokesperson said, “On behalf of the Office of the Auditor General, the Auditor General, Mrs. Heather Thomas, would like to express gratitude to everyone on the front line of the response who is working so hard to see Bermuda through this crisis.
“That includes our health care workers, grocery store operators, the police, the regiment, and all the public servants who are keeping our country running behind the scenes.
“The Auditor General, Mrs. Heather Thomas, also stated that the various short-term extraordinary expenditures dedicated to the COVID-19 response are a matter of Government policy and not for her to comment on.”
Mrs. Thomas said, “However, after we emerge on the other side, one of the legacies of this extraordinary period will undoubtedly be the longer-term impacts of the interventions by the government.
“While I recognize that those who need assistance need it quickly, I wish to point out that there is still an essential need for strong public accountability and transparency and it is important for decision makers to have up-to-date financial information in order to understand the available capacity for future interventions both during the pandemic and in the long term.
“In keeping with many countries around the world, the Government of Bermuda is battling to contain the virus and protect the country’s citizens.
“It has taken a number of steps in the fight against COVID-19 and to alleviate the anticipated financial hardships of its citizens.
“There will be significant amounts of taxpayers’ money spent on the Government’s COVID-19 response over the coming months. I appreciate that sound business practices may not be top of mind right now but sound financial management is essential during this unprecedented time.
“It is too early to tell exactly what the impact will be, but it will be profound.”
The spokesperson said, “Mrs. Thomas acknowledged that that the Government has recognized the potential economic impacts of its pandemic response.”
Mrs. Thomas said, “The Minister of Finance has recently revised the annual growth forecast for the Bermuda economy from 1.0 to 2.0% to -7.5 to -12.5%. According to the Minister, this is a preliminary projection based on various assumptions and is primarily dependent on how long Government’s intensive suppression measures remain in force.
“As well, the Government has recognized that the economic impact of COVID-19 will put pressure on the 2020/21 Budget. The combination of lower fiscal revenues and higher public spending is expected to cause the projected budget deficit of $19.8 million to increase.
“In my past annual reports, I have criticized governments for having rising deficits and debt levels and for not having an effective long-term plan for the reduction thereof. But I recognize that the COVID-19 crisis is different to anything that most of us have faced in our lifetimes and that extraordinary measures are necessary.
“Indeed, it is a time where people around the world are looking to their governments for strong leadership.”
The spokesperson said, “The Auditor General confirmed that it was not her intention to criticise increases in the deficit and the public debt levels arising from Government’s response to the coronavirus pandemic.”
Mrs. Thomas said, “I do want to stress that the need for the Government to practice strong financial planning and management has never been more important to help alleviate the on-going economic impacts.
“An example of why this will be important is the recently-stated fact that Standard & Poor’s has reduced Bermuda’s A+ long-term sovereign credit and senior unsecured debt ratings as well as its A-1 short-term rating and its AA+ transfer and convertibility assessment on Bermuda from Positive to Stable.”
The spokesperson said, “Mrs. Thomas said that she was pleased to note that the Government recently announced a number of measures to reduce non-COVID-related expenditures over the coming months.”
Mrs. Thomas said, “I strongly encourage the Government, over the coming months, to develop a long-term plan for reducing the expended deficit and associated public debt.
“In the meantime, be assured that my staff members and I are all working hard from home to fulfil our constitutional and legislative responsibilities to support the House of Assembly and the citizens of Bermuda during this challenging time.
“We are mindful of the pressures COVID-19 is placing on the Government and its organizations. We are also sensitive to the many challenges and are adjusting our work plans accordingly so as not to compromise the emergency responses.
“We will strive to maintain the same professionalism and productivity as normal and are committed to keep our team and clients safe and healthy during this challenging time.”