fair, even though their bank licence fees have gone up for the second year in a row.

Top executives from the Bank of Butterfield, Bermuda Commercial Bank, and the Bank of Bermuda all indicated a willingness to do their part in the community for the future. They noted the challenges facing Bermuda, including new expenses from operating an airport and the departure of foreign military bases.

"We are ready and willing to do our part, although we still need to sit down and understand the full impact on the bank of a number of changes in the new budget,'' Bermuda Commercial Bank managing director Ms Audette Exel said.

The bank will see its licence fee increase from $100,000 to $150,000.

Mr. Michael Collier, president and CEO of the Bank of Butterfield, said there are still important needs to keep Bermuda competitive in tourism and international business. His bank and the Bank of Bermuda will see their fees jump from $750,000 to $1 million. And while the increase comes as a surprise after the bank's significant contribution to the economy, he said he can see the rationale.

"I'm surprised that we have been hit again this year, bearing in mind that we decided to go ahead and spend $11.5 million, employing some 132 people in building our headquarters extension. We helped the employment situation with that decision,'' Mr. Collier said.

"I'm surprised he (the Finance Minister) is coming after the banks again.

Unfortunately, when you make $30 million a year and more, I guess we are fair targets.'' Mr. Collier applauded the efforts of the Minister to help small businesses and said that Butterfield's Bank was providing more capital this year to aid the efforts of the Small Business Development Corporation in helping new entrepreneurs.

He said he is not surprised, either, that the Government is seeking to obtain a piece of the professional service fees that management companies take in from exempted undertakings which have no physical presence here. But all three are yet to determine what effect, if any, it will have on their operations.

Mr. Louis Mowbray, executive vice president of administration for the Bank of Bermuda, said there appeared to be nothing particularly dramatic in the new budget, although he emphasised that the study of its provisions are likely to continue today.

None of the three would commit to saying whether they felt measures announced in the budget would drive the cost of doing business up in any significant way.

The Minister has announced that he will have an annual $400 fee paid to the Government by those companies for each undertaking they provide corporate services for.

The Minister rationalised that industry data fee income for the service providers "has been rising faster than returns in any other form of economic activity.'' The bankers seemed generally to be happy with the Government's budgeting of its own spending.

But Mr. Mowbray said, "I think they need to do more in that area. Over a period of time, there should be more privatisation and more efforts to control Government expenditure, and in fact reduce it.

"There are all kinds of demands on Government and some of it may need to be handled in different ways, perhaps with some of it being taken on by private companies.'' Ms Exel said, "The budget seems to make a genuine attempt on the part of the Government to control expenses and increase revenue.'' Mr. Mowbray added, "It's a very good budget under the circumstances. I don't think that it will unduly affect Bermuda's ability to compete. There are a couple of things that may be a bit adverse to tourism, including the raising of the airport departure tax and the re-positioning of the bases for the hotel occupancy tax.'' The three also said they felt that the combining of the hospital levy (long considered a misnomer) and employment tax into a single payroll tax will save time and money for both employers and Government.

The scheme, first announced a year ago, also increases from 11 to 11.5 percent the combined standard rate of tax payable by an employer.