Hamilton, Bermuda, February 21, 2011. The Association of Bermuda International Companies (ABIC) has praised the 2011-2012 Budget Statement for its commitment to the overall cost-cutting measures needed to address the high costs of operating a business in Bermuda.

“ABIC acknowledges the difficulties in framing a budget in the current economic climate, “said ABIC Chairman George Hutchings. “We are pleased to see the resolve from Government to cut back unnecessary expense, to reduce bureaucracy and improve the efficiency of service.”

These measures, and its commitment to a leaner operation, are critical elements in financial recovery. “If the cost of Government is not checked, the prospects of a recovery of the local economy could be further delayed or potentially inhibited over the medium to long term,” Mr. Hutchings said.

Mr. Hutchings also noted there is a need for properly targeted incentives to maintain and attract new business. The rollback of payroll taxes from 16% to 14%, he said, confirms the Government’s commitment to keep Bermuda competitive as a preferred domicile in the global marketplace, and to help attract new business to the Island – and is a very welcome development for both international and local business.

ABIC also welcomed Government’s intention to implement controls to address cost overruns on capital projects and current expenditure, and its recognition of reports from the Auditor General’s office highlighting the lack of accountability and fiscal restraint that currently exists in many areas of Government. The Bermuda domicile has significant reputational capital and prudent management of our public finances is critical, or we risk the erosion of our reputation.

”The cost of doing business is significantly influenced by government expenditures and the level of taxes needed to support them,” said Mr. Hutchings. “We hope in time that these and other measures will lead to a meaningful decrease in the level of national indebtedness and annual expenditure.”

He also noted that international business, as the central component of Bermuda’s economy, has a significant role to play in helping the Bermuda Government identify possible ways to stimulate this part of the economy.

“ABIC and its 130 member companies continue to have a strong commitment to Bermuda, and we look forward to working with Government to help develop strategies to maintain and increase employment in the International sector,” he said.