Ahh, if only Dr. Brown had as much success raising money from international companies as he does his pension fund 'friends' in the US.
The chilly reception which has greeted the Tourism Minister's request for the international companies to guarantee profits to airlines perpetually on the verge of bankruptcy can't be all that much of a surprise can it?
But let's get the not-so-subtle threat out of the way first, before discussing the attractiveness of this proposal.
He termed the effort an example of "good corporate citizenship" rather than a form of indirect taxation on international companies. "That's like comparing the opening up of an abscess to major medical surgery," he said. "This is just the same old partnership we're always talking about."
On the surface this might sound innocent enough, which is the intention, but the use of the phrase "good corporate citizenship" is a direct threat.
"Good corporate citizens" is the PLP's code word for work permit renewal and key employee exemption. That's not really a good starting point to entice businesses in for a 'partnership' is it. That type of passive aggressive behaviour is characteristic of this Government.
But moving past the typical PLP Government's intimidation, the question is why would the international companies funding airline guarantees?
For starters, the PLP have always looked at international business as a bottomless money pit to fund their misadventures. This is just another example, after former Tourism Minister David Allen attempted to have the industry finance a grand tourism headquarters (a self-serving idea Dr. Brown has hinted at resurrecting).
Businesses are not charities, although they do give heavily of their own accord, and they're certainly not around to be called on whenever Government doesn't want to pay for their programs.
Then there is of course the fact that Bermuda's businesses actually know how to make money, unlike the airline industry. The primary obligation of our international businesses is to its shareholders, not politicians, and certainly not propping up money-losing businesses. What would their shareholders think knowing that an insurance company was donating money to an airline they already pay exhorbitantly high fares to on a regular basis.
International business is already propping up the Bermuda airline routes. Take away the business travelers, who pay the much higher no-restriction first/business class fares and half of these flights would go away tomorrow.
But is this initiative for the new Miami route even going to help tourism? I doubt it. That Miami flight might do ok, but it'll be because of the locals not tourists. How many tourists are coming in from Miami? It's not exactly in the northeast, our real target market. I'm not against setting up flights for locals, we like to vacation too, but let's not pretend it's the saviour for tourism.
Which of course then begs the question of why the international companies should subsidise people's vacations. Which also raises the question of what guarantee the airlines have given in return to maintain reasonable fares?
But setting all that aside, $3M isn't a huge amount of money out of the Bermuda Budget. It's less than 0.5 of one percent. And wasn't it this tourism minister who was puffing out his chest during the budget debate about not needing any additional funding for 2005?
And of course, we can't forget Berkeley, the poster-child for Government fiscal waste. Over $70M additional dollars will being spent entirely unnecessarily there, not even considering the inevitable legal settlement with Pro-Active.
How many airline guarantees could the Government have offered with that? Hell, you might be able to buy one of those bankrupt airlines for $70M.
We could have taken that money and bought 140,000 tickets (assuming $500 each) to hand out for free on the streets of NY. That would certainly have put it to better use that the current plan to pour it into a building that should have been built for half the cost.
And finally, just one question:
If Tourism can't afford $3M for airline revenue guarantees, how do we propose to fund the infrastructure, both domestic and foreign, of an independent Bermuda?