I came through the airport today with a number of people excitedly awaiting a 35% duty hit on anything bought overseas. I wasn't totally surprised when it wasn't applied, and this evening a statement comes to confirm that the increase has been postponed until Nov. 4th, as well as just what qualifies as 'retail':
On the customs duty changes at the airport, given the time required to make system changes, including the changes to bank kiosks at the airport that are used for payment of customs duty, the recently announced changes to the customs duty on goods accompanying residents when they return from overseas trips will have effect from November 4, 2011."
Hmmm. November 4th you say? That also just happens to be the day Parliament reconvenes, which suggests that the 'system changes' line is a convenient cover for the fact that financial changes require an affirmative resolution from Parliament. I'll bet 35% of my next overseas purchase that a bill will be hastily presented to Parliament that day.
You see, the Finance Minister doesn't have the authority to change duty rates overnight, nor waive payroll tax, although it was suggested to me that with a little calendar sleight of hand she might have been able to pull a bit of a fast one to buy a couple of months head start.
I was discussing this with some people at the airport this morning, and it seems that someone might have pointed this out to the Premier.
All of this confirms one of my long term criticisms of the PLP: they don't have a plan. They really have no idea what to do, can't see what is coming and are just lurching from short term gimmick to short term gimmick.
Retail hasn't been in distress since the global recession, the PLP's favourite excuse for everything. Retail has been in trouble for a long time.
There are structural problems with retail in Bermuda that need addressing but have been amplified by the reduced population on the island, lower demand, rising Government costs etc.. Retail has been asking for duty relief, duty at the time of purchase etc. for years.
The problem Ms. Cox has is that she's loaded Bermuda up with so much debt that she can't give up too much on the revenue side for Government or she won't be able to service her 9 digit debt.
What Bermuda needs is a plan. Multiple plans actually: a retail plan, an international business plan, a tourism plan.
Investors and business owners need to know what the environment is going to look like for the next few years. They need stability not knee jerk overnight policy changes, even if they are temporarily in their favour (this time - previous payroll tax change was not).
Six month payroll tax holidays are fine, but they're stop gap measures not a plan.
It's time for the Premier to fire her Finance Minister.