Where are the PLP’s tourism ideas?

In his latest opinion piece, PLP shadow minister for tourism Jamahl Simmons laments the lack of progress and the lack of job creation by the OBA in Bermuda tourism.  He spends 4/5s of it highlighting whose numbers were bigger and then proclaims “Yet this isn’t about whose numbers were bigger.”  He suggests the bigger aim is a new approach that results in jobs for Bermudians, but what is that approach?

Mr. Simmons encourages us to see what the PLP has planned for tourism

We encourage you to examine our vision, an economic vision for a Bermuda that at its core is about jobs, opportunity, inclusion and building a Bermuda that works for Bermudians. Weigh it against the performance of the OBA and join us in making Bermuda work for you.

Fair enough, I thought I’d take a look as I’m keen to know what his vision is.  So I went to the vision2025.plp.bm site and clicked on tourism.  I was very surprised because it was short enough I can just copy the entire piece here:

Vision 2025 requires us to commit to developing a vibrant tourism industry for our country, and it requires the necessary investment to support that effort. Tourism is a global industry and we must compete globally. That means that we must invest in our product, invest in our marketing, invest in our people, and understand the basis of tourism.Tourism Is About experiences, tourism is about escape, tourism is about letting go, and most of all, tourism is about fun. In order to compete in tourism we need to remember that if people don’t get it in Bermuda, they will go somewhere else to get it. The next PLP government will make changes to our laws to keep Bermuda competitive with other tourism destinations. If we as a people put the passion and investment into rebuilding our tourism industry we can succeed. Our future success must be based on the realisation that our beaches alone are not enough to attract visitors to our shores; we must offer a compelling product and that requires investment from both the public and private sector.

To be honest, it is disappointing because I expected more given how much effort Mr. Simmons has dedicated to pointing out the OBA’s failed numbers.  The bulk of the above can be whittled down to (and I’m of course paraphrasing) “we’ll invest more and change some laws”.  That’s about as concrete as it gets. So I figured I’d take a look at the budget reply and am rather surprised that the statement there is even shorter and says the same thing.  Increasing spending isn’t the compelling plan I’m looking for. Where is the actual concrete vision and plan?  What would the PLP do differently that amounts to real actionable goals rather than simply platitudes?





People resigning from a party should fully resign from parliament at the same time

First Shawn Crockwell, now Mark Pettingill.  I said it before when Terry Lister resigned

when a member of parliament is elected under one banner and decides to join a different party or go independent they should resign and re-contest their seat.

Under our present broken political system some people may have voted for the individual, others voted for the party.  As an elected representative you owe it to your constituents to honor the commitment you made being elected under one party banner or another.  If you cannot honor that commitment you should immediately resign and re-contest the seat under whatever new commitment you wish to make.



A rethink on duty tariffs?

So what is happening with Duty Tariffs?  I was pretty concerned that it looks more like a hike than a “harmonization” and was disappointed at what remains to be considered “essential” which really should see hikes.

Now the word is that the change is being put on hold though details are limited on why and how.




If someone is volunteering to pay taxes, why make it difficult? #DiscouragingEntrepreneurship

I simply don’t get it.  If someone wants to voluntarily come in to register to pay taxes for some side work, why would you want to discourage them by making the process difficult?  It is just one example of where government bureaucracy adds a great deal of friction with unnecessary and cumbersome processes.

Here’s an example.  I’ve been asked to consider doing some side work outside of the work I do for my primary business (for which I’m already registered and pay taxes).  It’s a variety of odd work like some google analytics analysis, basic software and website consulting and kiteboarding instructing that will add up to maybe a few hours a month.  Being a responsible citizen I went into the office of the tax commissioner to register so I can pay some taxes if I start collecting income for these odd jobs.

So, to register as an individual who is offering services I need to provide

  • a copy of my passport or drivers license
  • a recent utility bill to verify address
  • a business plan

I understand the passport or license requirement, but the others?  Why are these necessary?

The address verification is a pointless exercise which I simply don’t understand from many fronts.  The banks love it, health insurance loves it, government too apparently.  It is so incredibly easy to fake any sort of utility bill using basic image editing software why is this even considered valid?  It is bureaucracy for the sake of bureaucracy.

Why is a business plan necessary?  For a few hours side work it would be easy to simply not even declare the income and the tax office probably wouldn’t know any different.  Yet, when someone voluntarily comes in and says please provide a registration number so they can do their duty and voluntarily pay their taxes, the government wants to throw up requirements and make things difficult

Really.  A business plan?  I asked why this is necessary and was told that I would need to supply either that or a copy of a contract for any work I’ll be providing.  It is like being treated as guilty for evading taxes before you’ve even earned any despite voluntarily looking to pay what is due.  Why?  Wouldn’t you want to encourage honesty rather than dishonesty by making it as easy and painless as possible to be honest?

Both the OBA and the PLP talk about wanting to encourage job creation and entrepreneurship. The problem is we seem to want to talk about it, but when it comes down to it, we’re not doing much to make it any less difficult and painful to actually do it.



Bermudian job growth actually did occur when accounting for attrition in government jobs

Recently there has been discussion that the non-Bermudian category was the only status category to see job growth in the last two years. There had been no official releases by the stats department suggesting this however it turns out it was discussed in parliament and reported in the newspaper.  On an absolute basis it turns out to be true, but quoting simply the absolute numbers doesn’t tell the whole story.  Government is finally seeing significant and much needed reductions in job numbers through voluntary attrition (retirements).  If you exclude declines in public administration jobs then there actually was Bermudian job growth alongside non-Bermudian job growth.

The PLP and the BPSU were absolutely correct that the non-Bermudian job category saw significant growth of 158 jobs when considering the period up to August 2016 while Bermudian jobs declined.  The thing is, when digging through the numbers there seems to be a lot more to the story to be discovered than simply “non-Bermudians got all the jobs”.  Government jobs accounted for heavy declines which significantly impacted the Bermudian numbers but government workers weren’t fired or laid off.

What led to this realization?  I didn’t get how how the PLP and the BPSU were claiming that only non-Bermudian jobs saw an increase in the last 2 years while the latest data from the stats department only showed 5 new non-Bermudian jobs added in 2015.  I assumed I must be missing something and I was.  A reader was kind enough to point out that some mid-term employment data was provided via an article back in February but wasn’t released as official stats updates.

Both Bermudian and non-Bermudian jobs saw growth in 2016 when factoring out government job declines.  Approximately 71 Bermudian jobs were added alongside 176 non-Bermudian jobs

Note: non-Bermudian excludes spouse of Bermudians and PRCs

Let’s take a step back and look at the numbers.  We’ll start by looking at one of my previous charts of government jobs vs. all other jobs updated with these Aug 2016 numbers.

Note: government jobs are on the left axis, all other jobs on the right.  I accidentally chopped off the labels.

That is a significant drop in public sector jobs.  169 less jobs in August of 2016 vs. 2015 to be exact.  The chart above shows the stark reality of 2008-2013 where government has been incredibly slow in reducing jobs while all other sectors (except social work and healthcare) have been hit with declines.

Since there were no mass firings or layoffs in government, the only explanation for these declines is voluntary attrition where people retired or resigned.  This is one of the things the OBA has taken the slow and steady approach to and while it has been excruciatingly slow it does seemingly seem to be bearing some fruit.

The problem is that numbers weren’t provided breaking down the impact of government attrition by status so we can get a better idea of the non-government job picture.  So, let’s attempt to approximate how many jobs were reduced by way of attrition.  We’ll do some fancy approximating of the 169 public sector jobs to figure out how many likely declined by status in Aug 2016.  We’ll take the average values of public administration jobs from 2008-2015 for each status category, determine the percentage breakdown of each and then apply that to the 169 to approximate the changes by status in 2016.

Here’s what it looks like.

Roughly speaking the breakdown of government workforce by status using an average across the data is 86% Bermudian, 10.5% non-Bermudian, 2.5% spouse of Bermudian and 0.5% PRC.  So that 169 reduction could roughly be approximated to 145 Bermudians, 18 non-Bermudians,  4 Spouses and 1 PRC.  The actual numbers could vary somewhat from this but unfortunately they weren’t available so this is what we’ll work with.

So, if we do some further approximation and remove public administration from the overall jobs numbers broken down by status we can get a better idea of how jobs have changed over time.

Non-Bermudian jobs show a noticeable trend upwards however we can also notice that there is an ever so slight improvement in Bermudian jobs as well.

The raw approximations tell us that roughly 71 Bermudian jobs and 176 non-Bermudian jobs were added when excluding government job declines. One could sensationalize this with a fancy chart and misleading headline but ultimately the real story is that when you look at the numbers in detail, we actually are seeing an improvement in job growth for both expats as well as Bermudians when looking at data available up to August 2016.



Only 5 non-Bermudian jobs were added in 2015. FIVE

The latest stats I’m aware of from the 2016 Job Market Report shows that the “Other non-Bermudians” category added a total of 5 jobs.  The PLP and BPSU are making this out like it’s some sort of huge number.  Like Bermudians are falling behind while non-Bermudian jobs are in abundance.  Is there more up to date statistics available or simply sensationalizing things for political gain?

In the PLP’s recent reply to the budget statement they lament “At the same time, just like last year, the number of guest workers employed in Bermuda has increased.”

During the BPSU panel on the job market BPSU President Jason Hayward laments that Bermudians are losing their jobs while non-Bermudians are seeing job growth.

Where are they getting their statistics?  Are there 2016 numbers available or are they actually making a huge issue that there were literally a small enough number of non-Bermudian jobs added that you could count it on one hand.



Does it make sense to make some government services worker owned and operated?

One of the things that come up in the Chamber of Commerce’s budget breakfast is the idea that portions of the civil service could be restructured via entrepreneurial initiatives. This is something I’m wholly in favor of.  Workers should be given more of a stake in success of the services they provide.  We should aim to give ownership and control over some of the existing government services directly to the workers who provide them.

Erica Smith, executive director of the Bermuda Economic Development Corporation, said: “With the potential restructuring of the Civil Service and the potential for redundancies and loss of jobs, maybe there is a way to incentivise entrepreneurs so privatisation comes into play.”

Let’s take garbage collection as an example of an area that could be converted into a set of worker owned and operated enterprises.

Create a couple companies and give one a set term contract for each of the east end parishes and another a set term contract for each of the west end parishes, each contract matching the existing rates it costs government to operate those services.  Give each company an interest free loan to purchase the existing equipment from the government.  Then either make the organizations worker owned cooperatives or register them on the Bermuda Stock Exchange and give each worker ownership shares in the organization.  Stipulate that after the contracts expire parish councils will be provided the budget to choose their own providers.

What are the flaws with such a concept?  Would it be possible to move much of the maintenance and service responsibilities




Why is this a terrible and misleading chart? AKA: the PLP didn’t actually destroy tourism

Another lesson learned?  If people don’t understand why a chart is misleading then they can miss that you’ve made a chart so ridiculous it was meant to be humourous, not taken seriously.  So perhaps it it helpful to point out why this chart was terrible and misleading.

1. The y-axis has been set to 200,000 which as you can see by the markings makes it appear as if the change between 2012’s number and 1995’s number is significantly larger than it is in reality.

Contrast the above chart vs the one below.  Notice how significant of a difference it makes?  The decline represents roughly 1/3 of the overall numbers however when depicted with a y-axis of 200,000 it gives a perception of a 4/5th decline.

2.  The date chosen of 1995 is a subtle detail that makes it look like we were on an uptrend before the decline and betrays the long term truth.

Choosing simply 1995 doesn’t tell a complete picture.  If we take numbers going as far back as I could find we see a the trend was part of a larger decline.  For example, had I chosen to start the chart in 1993 instead of 1995, it would have emphasized the decline has beginning under the UBP (labelled OBA in the chart).

3. The pre-1998 and post 2012 years are both labeled OBA even though pre-1998 would have been the UBP

This was a jab at the OBA but not a fair comparison.  A fair comparison separates out each party to show the details of each.

Bonus points?

  • The chart only focuses on “Air Arrivals” and not people who specifically came on vacation.  It also doesn’t focus overall on overall visitor spending which is the most important number in tourism.

  • If you look at the long term trend as a rolling average (this means you take the average of 5 values to smooth out the peaks and troughs) you can see the general peak in the 80s and the decline began in the 90s under the UBP.
  • The decline happened to coincide with the rise of international business.
  • Likely reasons for the decline are rising costs that made a Bermuda vacation more expensive while offering less value.  We also saw significant changes in the number of hotel rooms available over that time period with hotels that were increasingly aging and rarely renovated.



Wait… pearls, jewelry, decorations and antiques are “essential” and not subject to duty hikes?

While I’m absolutely in favor of harmonizing duty towards a single rate and reducing the complexity, the government’s duty changes don’t make sense according to my current understanding. It seems as if the government has simply just found an excuse to hike rates without actually harmonizing anything.  They’ve also made efforts to keep rates low on a whole raft of things that should be taxed at a much higher rate, while simply hiking things that were already taxed fairly highly.

Perhaps I’m entirely misinterpreting the new rates but as far as my understanding goes, they haven’t changed any categorizations, simply just hiked rates.  Let’s take a moment to review a few scenarios to see what I mean.

Let’s say your importing something via a courier.  What are the new rates?

Well, if you’re importing a computer for work or for school originally you would have paid 22.25%, now you’ll pay 28%.  Good luck.

However, if you happen to be importing Pearls or Jewelery you’ll be happy to know that you’ll have no rate hike.

Wait, what did they say in the budget statement?

The 3 lowest rates remain the same as they contain several goods which are considered essential.

Let me get this straight.  Pearls, Jewelery, decorative glassware, fancy china and ornaments, are all considered essential and will not see any hikes?

You’re kidding right?  What am I missing as they certainly couldn’t have left rates low on these items while simply hiked the rates on other things.



Where are the cuts in the civil service? #WhereDidTheJobsGo

With the introduction of the recent budget, the civil service is under the spotlight for the tremendous burden it places on the economy.  The Chamber of Commerce expressed its disappointment that little is being done to reduce this burden.  Facebook has lit up with claims that “the civil service is basically welfare”.  Is it fair to say that the civil service is oversized for a jurisdiction like ours and overloaded with far too much unnecessary bureaucracy?  If so, what is being done?

Let’s take a look at how civil service job numbers have faired against all other jobs.

First off, let’s note that there’s no crazy chart voodoo being done here.  On the zeroed left axis we have public administration jobs and on the zeroed right axis we have all other jobs.  The two data points are plotted in such a way as to give a relative comparison from the same starting point.

What we can see from this chart is that the civil service has only gradually started reducing overall numbers from about 2012.  Declines are happening, though they aren’t happening all that quickly when you contrast them against the declines across all non-public jobs.  Non-public sector jobs witnessed a start decline right from the start of our available data in 2008 and have only recently shown signs of halting.

Let’s take a deeper look at changes of specific occupational groups within the public sector to better understand what has been happening.

Interestingly the largest job category is “professionals” which has seen rather significant declines over the years.  The other categories are not as clear, mostly seeming to either stay around the same or actually rise a bit.

Let’s narrow in on the declines other than professionals.

Technicians and elemenary occupations don’t show a great deal of change while clerks (such as secretaries) have seen a significant decline.

How about job growth?

This one was a bit surprising.  Interestingly there was job growth in management as well as service worker positions.  It would seem that although attrition is happening, there does seem to be considerable growth in management which could be pushing up costs as salaries tend to be higher for these roles.

So, there are certainly some arguments to be made that the civil service is gradually being reduced in size, albeit slowly.  Unfortunately this means that the private sector is left to take on an increased burden and the public faces higher taxes as a result.  It’s too bad the furlough days were eliminated, they seemed like a good solution for reducing costs without eliminating jobs.