Limey in Bermuda has picked up on the PLP’s intentions to fund their "Future care" health care improvements for seniors plan by creating a new tax. How would the scheme work? What about the future? Who’s going to pay for it?
Under their scheme, working Bermudians will have to contribute to a health style pension plan where a portion of your income is siphoned to create a fund to cover the health care of seniors. While it’s hard to argue against better care of seniors, extra taxation is less than ideal. What will be offered by Future Care, what will it cost and how much tax will have to be collected?
Then there are the problems such as how age demographics will impact the fund itself. According to the Department of Statistics’ Population Projections 2000-2030, the proportion of seniors (65 years and older) will double from 11% in 2000 to 22% by 2030. When discussing old age dependency it suggests:
Prolonged life of the elderly equates to increased responsibility for the Bermudian working population in general and their children in particular. A shrinking Bermudian workforce and aging population, also means a smaller tax base for government revenue at a time when the number of pension payments will increase.
If we’re already facing potential problems with regards to the pension pool, what problems will we face with a health style pension plan? Does the doubling of old age dependency and the decreasing workforce suggest that this plan will be doomed to create spiralling tax costs as it struggles to match the growing senior population against the shrinking workforce?
Thinking beyond this year, how will we continue to pay for this program especially in the face of the poor general health of a large number of Bermudians? Indeed, we are sadly one of the fattest peoples on the planet at very high risk for disorders such as diabetes. How do we cope with the potential costs?
It also opens up the questions of the lack of preventative medicine which may bring this whole system to it’s knees by the time the current mass of Bermudians with poor nutritional habits hit old age. Why is preventative medicine still so low on the priority list?
While it’s easy to "let the youth pay for it", there is only so much that the youth shall be able to bear. In reality, should taxation spiral out of control it may well come to pass that more of our talented and most capable youth will pick up and leave for greener pastures (especially considering the high cost of home ownership) leaving even smaller tax revenues for our elder generations.
Sadly this scheme isn’t convincing in it’s present state. While the intentions are honourable, it raises far too many unanswered questions that must be asked and subsequently entered with well thought out planning. Unfortunately a "Whatever it costs we will do it" attitude won’t cut it because as Sir Issac Newton once suggested, for every action there is an equal and opposite reaction.