Government is proposing tax breaks for “struggling construction firms”.
However, as the article admits in the third sentence, this really isn’t meant to help construction firms, rather developers, and specifically hotel developers.
Because if a developer knows that a builder is able to secure a payroll tax break on their project, they will fully expect that savings to pass up the chain to the developer. So the “struggling construction firm” really benefits very little from this.
Given the volume of work and the number of firms still out there, there remains almost NO profitability in the industry at the moment. This move by Government doesn’t help that. Not that I am arguing they should intervene significantly. The free market still has work to do.
What this does is provide an increment of incentive to potential overseas hotel developers. As I have said before, making a major new Bermuda hotel development financially feasible verges on the impossible. If Government can increase the likelihood of financial feasibility by offering concessions, I am definitely in support. They aren’t getting taxes on the Club Med site now, so they have nothing to lose.
But my point here is that this move will not help “struggling construction firms”, nor was it designed to. At least not directly.