Bermuda Government Press Conference – COVID-19 Update August 20th
Good afternoon members of the media, and members of the public who are watching at home.
Today, I am joined by the Minister of Health and the Minister of Finance who will provide information from their respective ministries. The Minister of National Security is also joining us this evening and is able to answer questions members of the media may have.
We will begin our press conference tonight with an update from the Minister of Health. Minister.
Minister of Health Statement
Today there were 1,149 test results received by the Ministry of Health, and none were positive for COVID-19.
Bermuda has had 166 total confirmed positive cases. Their status is as follows:
- 147 have recovered, and
- there are 10 active cases, who are
- all under active public health monitoring;
- none are hospitalized or in critical care, and
- the total deceased remains at 9.
The average age of all of our confirmed positive cases is 58 and the age range of all of our positive cases is from 18 to 101 years.
The source of all local cases is as follows:
- 61 are Imported
- 85 are Local transmission, with known contact
- 19 are Local transmission with an unknown contact, and
- 1 is under investigation
Bermuda’s country status remains “Sporadic Cases”. The seven-day average of our real time reproduction number is less than 1.
On Monday the Ministry of Health advised that there were four new COVID-19 cases; three imported and one under investigation. All are isolated and contact tracing began immediately.
There has been much public speculation regarding one of the cases – and the movements of that particular individual.
I can advise you today that staff from the Department of Health have since visited the places where that traveller went prior to receiving their positive test result. This included a number of restaurants, a gym, and a leisure boat. Staff visited for contact tracing purposes, to answer any questions or concerns from individuals working in those venues and to ensure that appropriate cleaning and health protocols were in place.
Some have wondered why the Ministry did not name those locations in the media…I think this would be a good time to clarify that Public Health is guided by the principal to only publically name an establishment or business when there is an ongoing threat to the public or when there is no way that ESU can contact-trace persons at that place. In this instance, neither of those situations applied.
We must be aware of the negative impact the naming of an establishment could have on them; to be branded with an unfair stigma which may affect the livelihoods of those working there. If they choose to publically name themselves that is their prerogative. But please don’t misunderstand me…Be assured that we would never put anyone’s health in jeopardy for the sake of a business’s privacy.
It’s important to note that two of Monday’s new cases were recent travellers who had negative pre-departure tests and negative arrival tests…and didn’t test positive until subsequent tests. This reinforces something which I have mentioned previously…you are not ‘out of the woods’ completely until you have received a negative result from your Day 14 post-travel test. Symptoms of COVID-19 can take 14 days to develop. This is why travellers are not really “free to roam” until they clear their day 14-test.
Once travellers have TWO negative tests you can “roam with the utmost care” but you must physical distance, wear a mask, avoid large groups of people and the clinically vulnerable and wash your hands well and often. It is not ‘carte blanche’ to go partying with dozens of people! Anyone arriving into Bermuda remains under mandatory 14-day public health monitoring, which includes self-monitoring temperature and symptoms daily and reporting any symptoms to the Epidemiology and Surveillance team.
In addition, it is very important for both visitors and residents to remember that you must remain in quarantine until you receive your individual results by email. There has been a small number of persons who broke quarantine because they heard on the news that there were no positive results the day prior. In fact, travellers must remain in quarantine until they receive their own personal emailed result of the negative test that releases them from quarantine.
As I announced on Tuesday, the Cabinet has reviewed the traveller requirements for returning arriving passengers in Bermuda who do not have a valid pre-departure test.
Effective Tuesday 25th August any travellers arriving in Bermuda without a pre-departure test will be required to test on arrival and quarantine for at least eight days. They will require a negative test result after day 8 to be released from quarantine. This mean they will not have to do a day 4 test.
Importantly, the pre-departure test must be taken in the country you are departing – that is, a test taken in Bermuda will never count as a pre-departure test to return to Bermuda.
In addition, have seen a couple of cases of residents travelling overseas, returning without a pre-test, and then breaking quarantine to fly out again. This is a dangerous practice that puts you and others at risk. We ask you to be a law-abiding, responsible citizen and adhere to the quarantine requirements.
We actively encourage residents to avoid non-essential travel at this time. During a pandemic, a holiday will never be entirely safe. But if you must travel, it is best to get a pre-departure test before you come back. This will keep you safe and prevent the mandatory 8-day quarantine on your return.
To support the enforcement of quarantine, all passengers who arrive without a pre-test and are subject to the mandatory 8 day quarantine will be fitted with a quarantine monitoring bracelet that will be connected to their smartphone.
Additionally, this week we activated the mandatory uploading of a pre-departure test for visitors during the Travel Authorization process. This should provide an added layer of safety for travellers, and will further ensure compliance regarding the requirement for all visitors to Bermuda to have a pre-departure test before travelling to Bermuda. The exception to this requirement are those aged nine or younger, who must upload a government photo ID with proof of their age in place of the pre-departure test.
Finally, in light of this week’s imported cases, I would like to encourage all businesses and public-facing establishments to reacquaint themselves with the guidance for each of their sectors, which can be found at coronavirus.gov.bm
Likewise, the general public is advised to ramp up preventive measures: wash hands frequently, wear masks diligently when mixing with other households, avoid large groups and keep six feet away from others if unmasked.
Remember a simple rule: Avoid the 3 C’s: Closed spaces, Crowded Places and Close-contact settings.
Stay safe, Bermuda, and thank You.
Thank you Minister of Health.
I would like to reiterate your message of the simple steps that we can all take to reduce the risk of additional spread of the virus. Wear your mask. Stop shaking hands. Be careful with your interactions and keep the physical distance. Remember many people, who are carriers of this virus are asymptomatic. That means they don’t have a fever, they are not coughing, they literally have no symptoms and they feel perfectly fine. If you are asymptomatic and you are at a funeral, unmasked [which is against the law] hugging senior citizens, after a weekend of partying on the water, you could be unknowingly transmitting the virus.
Remember this virus requires a host – us humans. If it cannot jump from one human to another it will not spread. I know how boring it is to keep your physical distance. I know how tedious it is to make sure you follow the rules and to wear a mask. We have all heard the stories from overseas of family dinners and outings that ended with multiple family members being lost to the virus.
Let’s not let our guard down, we can still enjoy ourselves – but we must be smart and keep each other safe. Rest assured as we have done for the last five months we will continue to protect Bermuda and its residents.
You have heard me, others, and even overseas media state that Bermuda’s COVID-19 testing regime for arriving passengers is the most stringent in the world. The new measures that will be introduced by the Government effective next Tuesday, will ensure that persons who do not have a pre-departure test are subject to more strict requirements.
There have been some who have asked why do we not just require a 14 day mandatory quarantine for all arriving passengers. A mandatory fourteen day quarantine for all arriving passengers would effectively shut our tourism industry and close our hotels, putting over a thousand Bermudians out of work.
One of the recommendations of the Economic Advisory Committee was to reopen our tourism industry with effective protections through aggressive testing and use of technology. The government has done that and we will continue to strike the right balance between keeping our country safe and rebuilding our economy.
The Minister of Finance will now speak more on the steps the Government is taking to ensure a strong and broad-based economic recovery. Minister of Finance.
Minister of Finance Statement
Today, I am pleased to provide an update from the Ministry of Finance on the actions being taken to appropriately and proactively manage the economic challenges resulting from the COVID-19 pandemic.
I will also report on how the economy has fared through our management of this crisis. Before I commence my report, however, I would like to thank the people of Bermuda, with particular focus on our essential workers, for what they continue to do to keep our island safe and our people healthy.
The three main areas of focus of my remarks will be the recent Bond Offering, our Fiscal Quarter 1 Performance, and the ongoing work in relation to the economic recovery plans and programs.
I will start with the very positive news on our recently concluded Bond Offering.
In my National Budget Statement delivered in February, I signaled an intention to evaluate market conditions to address borrowing requirements and refinancing opportunities for certain portions of Bermuda’s indebtedness. However, as a result of the COVID-19 pandemic, unexpected expenditures have necessitated an offering larger than contemplated in the Budget Statement in order to assist the fiscal situation.
On Monday, the Ministry of Finance accessed the international capital markets and raised US$1.35 billion of new bonds. As part of our debt management plan, we split the issue between 10 and 30-year bonds, with equal amounts of capital raised in each issue.
Orders from investors significantly exceeded the amount offered, reflecting massive interest in Bermuda’s credit. This allowed us to achieve record low coupons and spreads to Treasuries. At the same time, it also allowed Bermuda to repurchase for cash a portion of our outstanding Bonds and repay local credit facilities, all of which resulted in lower interest rates.
The 10-year bond were issued at a record low coupon of 2.375%, while the 30-year was also favourably priced with a coupon of 3.375%. It is noteworthy that this is the first time that Bermuda has issued a 30-year bond, this allowed the government to lock in historically low interest rates for a longer period of time.
As noted in press reports on this matter, the offering commenced with a series of virtual meetings over three days last week to update investors, primarily in the United States and Europe. With the ongoing COVID-19 pandemic, investors were focused on steps the Government is taking to mitigate the economic impact of the pandemic, largely containing it to this year and position ourselves for a solid economic recovery.
Feedback from perspective investors was very constructive and supportive of the proposed transaction. Accordingly, the offering on Monday attracted healthy demand from some of the world’s top investors, allowing the Government to execute on its strategy to not only fund large unexpected COVID-19-related expenditures but also to refinance existing debt at much lower rates. While total debt has increased by about $520 million, the average interest rate on the entire portfolio has decreased by approximately 59 basis points or 0.59%.
Further details on the offering will be released by the Ministry of Finance in a separate press release. In that context, I will now turn to an update on the financial performance in the wake of COVID-19.
2020/21 First Quarter Fiscal Performance:
With the onset of the COVID-19 pandemic, it has had a profoundly negative impact on the Bermuda economy and consequently the government’s fiscal position. The mandatory “Shelter in Place”, the closing of the airport and the lack of cruise ship arrivals has impacted our businesses and our people.
The headline numbers for the 2020/21 National Budget was: a revenue target of $1,122.2 billion; current expenditure of $1,057.0 billion, including debt service; capital expenditure of $85.0 million; and a projected deficit of $19.8 million. However, as previously announced, the public-health measures required to suppress COVID-19 have caused a severe economic shock in the Bermuda economy. The economic impact of COVID-19 has therefore also had a severe knock-on effect on the 2020/21 fiscal performance. The combination of lower fiscal revenues, and higher public spending, will cause the projected budget deficit of $19.8 million to significantly increase.
Revenues for the three months ending June 30, 2020 were $221.6 million. As noted above, this was $58.9 million (21%) lower than in budget estimates. The primary reason for this decrease was due to a shortfall in Customs Duty collections of approximately $20.7 million versus 2020/21 budget estimates.
With most stores and the borders remaining mostly shut, due to the COVID-19 pandemic, this had a negative impact on goods being imported into the country. The pandemic also had a negative impact on Passenger Tax receipts, as there were no cruise ship arrivals from March to June, and all other receipts as the island was under the state of emergency declared by the Governor on April 1st 2020 and the Emergency Powers (COVID-19 Continuing Precautions) Regulations 2020.
However, there was a bright spot as Payroll Tax was $18.2 million higher than was estimated in the 2020/21 Budget as $134.9 million, which was collected for the first quarter.
As a result of the impact of the pandemic, total revenues are tracking below budget estimates. However with the reopening of the economy and the borders we expect to see an increase Customs Duty collections and other receipts for the remainder of this fiscal year.
Current expenditures, excluding debt service, for the first three months ending June 2020 were
$281.6 million; this is $47.7 million (17%) higher than the budget estimate. The increase in expenditure was mostly COVID-19 related as $43.6 million was paid out for the Unemployment Benefit and $12.4 million was used to cover necessary public health measures to contain the spread of the virus. If not for the additional spending as a result of the pandemic, current expenditure would have been $8.3 million lower than the Budget estimates.
As to be expected, current expenditures, excluding debt service, are presently tracking ahead of budget estimates. The $281.6 million spent in the first three months of 2020/21 represents approximately 30.1% of the total current account budget of $935.6 million. However the Ministry of Finance COVID-19 – Fiscal Plan calls for a reexamination and reduction of lower priority budget expenditures to ensure that spending needed for COVID-19 matters are maintained and the deficit is contained within an acceptable level. Accordingly, savings have been identified in several discretionary areas such as capital, grants, consultant, travel, repairs and maintenance, etc. Additionally to reduce the deficit further, other temporary payroll or government employee overhead savings are being considered and the Government has been in negotiations with the Unions on this matter. I can advise that at this time the 3 largest unions representing over 80% of public sector employees have agreed to Government’s cost saving measures.
Capital expenditures for the period ending June 30 2020 are $9.8 million lower than Budget estimates. This is due to the Government’s proactive approach to halt all capital projects that have not started and to rationalize which projects take priority over others.
Capital expenditures are presently tracking below budget. The $11.4 million spent in the first three months of 2020/21 represents approximately 13.5% of the total capital account budget of $85.0 million. However, as mentioned before, this budgeted amount will be revised as a result of the impact of the COVID-19 pandemic.
For the first three months of 2020/21 Government incurred a deficit of $101.7 million, compared to a deficit of $4.95 million for the Budget estimate. This deficit was financed with both working capital and borrowing. This quarterly level of deficit is not only unsustainable but economically and fiscally imprudent. It is vital that Government achieve the cost reduction targets in this fiscal year. During these difficult times it is critical that we continue to manage the fiscal affairs of the country with prudence. Gross debt at the end of June 2020 stood at $2.82 billion, and net of the Sinking Fund debt was $2.78 billion.
After factoring in the impact of lost revenue, additional expenses relating to the COVID-19 pandemic and the Government’s cost-saving measures, our current estimate of deficit for the 2020/2021 fiscal year is $225 million. In making this estimate, we believe that the extraordinary COVID-19 related expenses that were recorded in the first fiscal quarter will not continue into the remainder of the year and with the easing of restrictions, including the opening of our borders, we expect revenues to show improvement over the first quarter.
Economic Recovery Plans
As noted previously, a critical part of the presentations to investors in the bond offering was providing information on the work being done to continually strengthen and build Bermuda’s economy and to address the economic challenges arising from the pandemic. The economic strategy focusing on COVID-19 and beyond has three key phases.
The first phase focused on assisting businesses and persons to survive in the short term, particularly during the period where business activity was significantly curtailed due to the lockdown that Government had to impose to ensure the health and safety of Bermuda’s residents.
With the opening of the airport and the resumption of greater levels of commerce, there is now increased focus on sustaining the economy and building on the ongoing work to stimulate the economy. It should be noted that there are three guiding principles which form part of the development and evaluation of the strategies and actions being incorporated into the plan.
These are fairness and equity, fiscal prudence and financial viability, and it is seen as paramount that actions taken must also consider the impact on the health and safety of Bermuda’s residents.
During this challenging period, I have therefore had extensive and ongoing discussions with my internal team and the various external advisers, who play an important role in addressing the various and complex areas that make up the Bermuda economy.
These include the Financial Policy Council, the Fiscal Responsibility Panel, the Bermuda Monetary Authority, and the Bermuda Business Development Agency who have provided very helpful advice during this period. In addition the Bermuda Business Development Agency and the Bermuda Tourism Authority participated in the investor presentations to highlight the initiatives that they are undertaken, which are part of positioning Bermuda to successfully adapt to “the new normal”.
I have also more recently had the opportunity to increase dialogue with industry partners (both in the domestic and international business sectors). This program, which was part of a communications strategy developed pre-COVID, and is intended to strengthen Bermuda’s existing business base. I think it is important to note highlight that two consistent messages which have been highlighted in the discussions have been the positive reactions taken to the Government’s handling of the crisis and the effectiveness and strength of the Bermuda Monetary Authority as Bermuda’s integrated financial services regulator.
In relation to the development of the Economic Recovery Plan, the Economic Advisory Committee continues to play a key role. The Economic Advisory Committee has been meeting regularly and they have prioritized ideas for the retention of existing business, growing existing sectors, and attracting new industries.
As noted in previous updates, the Phase 1 focus was on “quick wins” to assist persons and entities to survive through the early stages of the pandemic, and to take actions to mitigate the impact of the economic and financial challenges. There have been over 50 short-term ideas, prioritized by industry and their focus areas included taxes, jobs, immigration, tourism, technology, and new-sector growth. All ideas have been submitted to the Government for evaluation and approval, and work has been ongoing in relation to the implementation of a significant number of these proposals.
As previously reported some of the short-term ideas which the Government has executed to date include extension of the Unemployment Benefit, extension of Payroll tax deferral for restaurants and bars, amendment to the Employment Act in reference to redundancies, and implementing policies to attract long term stay business visitors.
A technology related proposal from the EAC was to provide “Government digitization projects for small and medium enterprise tech companies” I am pleased to report that IDT is working closely with the Department of Workforce Development and the Bermuda Economic Development Committee to identify individuals and small to medium sized businesses that have potential to undertake key Government digitization projects. Many of the items recommended with regard to immigration are currently being addressed by the Board of Immigration as they review the Work Permit Policy, as the Government continues its efforts to execute Comprehensive Immigration Reform.
The Committee is currently developing medium–term strategies which can be implemented over the next year to three years in order to stabilize and grow the economy. The strategies are being refined and assessed for impact before final submission to the Government.
The Committee is also working with the Finance Team to refine inputs being used in the model that was recently designed for Bermuda to assist in forecasting future deficits; and facilitate more effective debt and fiscal management. Further, they are providing valuable information on the potential impact of COVID-19 on various sectors, which is key to being able to facilitate economic stabilization and growth in affected sectors. I would again express my gratitude to the members of the EAC for the significant investment of time and expertise into this initiative that is so important to Bermuda.
I would further note that we continue to receive ideas from the wider community and we appreciate the interest and considered thought that is evident through these submissions. It should also be highlighted that a small committee of young Bermudians, the majority of whom are still in university and college or in the early stages of their career, have also been working to provide ideas to assist in Bermuda’s economic recovery. This committee provided me with an initial presentation yesterday, and will continue their deliberations over the coming weeks.
COVID-19 has had an adverse impact on our lives, our health, and especially our economy. However, we made considerable progress with managing the COVID-19 crisis and we continue to do so. Our progress is due to the hard work and dedication of our many frontline workers, other persons in the community as well as many earnest and hardworking public officers. I would like to thank them all. As well, I would like to thank the team at the Ministry of Finance, and our industry partners and stakeholders for their tremendous assistance and support as we continue strengthening our economy.
Thank you Minister of Finance and congratulations on the most recent debt offering from the Government of Bermuda. Although the figure is large, it is noticeable that the Government of Bermuda will pay less cost on interest on an annual basis, after this debt raise than we did before. So that is $6 million that will be saved due to the reduction of interest which can be either saved or used for other priority items. So I want to congratulate you Minister of Finance for that excellent work, which you managed to accomplish and I just reiterate as I say to all persons inside of Bermuda that the country is fortunate to have you as our Minister of Finance.
As the Minister of Finance has stated, we are setting the stage for economic recovery, by ensuring the Government can support the development of new industries, by providing funding and other measures at the Bermuda Economic Development Corporation, by making sure we keep the business that we have and expand the business that we have and continuing to meet with stakeholders to ensure Bermuda has all hands on deck to continue the work that we’ve already started to rebuild our COVID-affected economy.
Wearing my Tourism hat, the Government of Bermuda continues to work with stakeholders to ensure that we can get more Bermudians back to work in hospitality.
It is noticeable that there will be more hotels scheduled to open in the coming days and weeks and this is certainly going to be a relief to workers who are looking to get back to providing for their families and off of Government assistance.
To support the Public Health Offices at the airport, the Bermuda Tourism Authority has introduced a Tourism Ambassadors programme to answer general questions about Bermuda for travellers. They provide details about tourist attractions, restaurants, operating hours, etc.
The Tourism Ambassadors, appropriately attired, are stationed at the airport greeting tourists, thanking them for coming to Bermuda, and answering queries they may have. The Ambassadors will continue to serve throughout this time, and as the numbers of arriving tourists increase, so will the number of Ambassadors, ensuring hospitality and great customer service as they arrive.
I have been asked to relay a message by the Minister of Education. So I will relay that now.
Representatives from the Ministry of Education and the Bermuda Union of Teachers [BUT] have been meeting during the past few weeks to discuss the reopening of our Public School System in September 2020.
There was extensive discussions about the entry to exit safety and health protocols for the various school levels, staffing, school hygiene supplies, the hybrid learning model, the cleaning of schools, and the first week of school.
Recognizing the safety and health of students and school staff is paramount, the Ministry of Education and the Bermuda Union of Teachers both came to the agreement that it would be best to delay the return of students by three school days until Monday, 14 September to afford staff the time to learn and take on board the numerous safety and health protocols to ensure a safe environment for staff and students.
School staff will still return on 1 September. The additional three days will allow full professional development for staff to focus on safety and health protocols for: entry to exit of school buildings, isolating sick staff and students, special services programmes, school evacuations and the requirements for food services, as developed by the Department of Health.
Before I close, I want to speak about the Government’s online forum for the post COVID-19 economic recovery.
First, I want to thank, as the Minister of Finance has thanked, the persons who have taken the time to share their ideas. Most of the respondents were imaginative, thoughtful, creative, and pioneering. I wish to remind persons that it is not too late to submit an idea and continue to engage on the forum.
The ideas covered everything from tax reform to repealing the Spirits Act; a law that made it illegal to distill alcohol but legal to brew beer.
There were people who wanted a totally pedestrianised City, and people who wanted to be allowed to use their pensions to invest in local businesses whose plans had been approved.
Some of the ideas which have been submitted have already been put into place. But the vast majority of the submissions were also about how we in Bermuda could be more innovation than what we have.
In the past it was said that necessity is the mother of invention. Meaning that when push comes to shove, or a want becomes a need, that is when people invent. After 2020, people may come to say, COVID-19 is the Mother of Innovation.
That has to continue to be Bermuda’s story. We must continue to be innovators. It is the innovation that we have seen that has made Bermuda one of the best testing jurisdictions on the planet earning plaudits around the world. It is innovation that was driven by Bermudian scientists, Bermuda technology companies and Bermudian ingenuity and hard work.
It is the same innovation that has seen businesses evolve their models and showing more and more delivery services and others who have adapted to the new times and the new normal. We’ve also seen it in the retailers who are adopting their business models so they can better service not only locals but also visitors. And then there are those in our tourism industry who are modifying how they are servicing customers in the middle of a pandemic – and in some cases not even waiting for airlift but developing their own so they can make sure to keep Bermudians employed.
This is the ingenuity the country must continue to have as we move forward during this economic recovery. What I can state is to date we have done a good job and we have certainly managed to while keeping our testing regime in a very strong place that it has certainly helped us but we must continue to advance.
Before I take questions from the media, I will let you know that next week will be the last weekly press conference.
With schools reopening, this wonderful location will transition back to the use of The Berkeley Institute. What I will let you know is that individual ministers will continue to hold regular press conferences at the A B Place Media Room. However the A B Place Media Room will not be large enough for effective social distancing for all ministers to be in one place at the same time. So we will have these press conferences on a regular basis and I will also make myself available as it is important that we continue to answer the questions from the public via the media that you may have.
I am pleased to now take questions from the media for any of the ministers who are here in attendance.