Smart politics or a blink?

The Bermuda Government is putting its privatization bill on hold after getting an agreement with the union to find 5% of cuts in next year’s budget. Based on this year’s budget projections, that would amount of $60m in cuts and would leave Government about $60m in deficit unless revenues rose from the projected $900 million.

Maybe Government would not have gotten that concession without the bill, in which case this might be smart negotiating. But there are Government departments which could and should be privatized or outsourced and this means they now won’t be. That seems to be an opportunity lost and it is not clear when it will come around again.

For the unions, this looks like a win, depending on the nature of the cuts. If jobs go in order to find 5% in cuts, have they won the battle but lost the war?

It is difficult to see how you can cut 5% without a loss of some jobs given that more than half of Government spending goes on personnel. We will see.

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