Premier Paula Cox’s announcement that payroll tax will be frozen for retail workers for the next six months is welcome news. This newspaper has been advocating actions of this kind for some time, and anything that will help local businesses keep people employed and put money in their pockets will help the economy.Ms Cox’s decision to restrict the duty free allowance for returning residents to one household member will be less popular, as will the decision to raise the tariff from 25 percent to 35 percent on declared goods by returning travellers. It should deter people from spending abroad, which will slow the drain of foreign exchange at the same time that it encourages people to buy Bermuda, but it should only be seen as a short term expedient, and not a long-term solution.Shadow Finance Minister ET (Bob) Richards has been somewhat critical of the proposals, and with some reason. As welcome as they are, on the basis that some action is better than no action, they are temporary measures, and do not constitute a long term plan for recovery. The third plank of Ms Cox’s programme a guarantee to Wedco to build 100 low cost homes in the Dockyard area is particularly jarring. This may keep some people employed, but unless Ms Cox knows something the rest of Bermuda does not, the idea of building more low cost housing at a time of population decline and plummeting real estate prices and rents makes little sense.There is infrastructure work that is needed, including work on a host of near derelict Government-owned buildings, roadworks and more, but a public-housing project cannot be the priority.So while the measures can be justified as short term emergency measures and that is all Ms Cox has called them her assumptions that these will give business time to reinvent itself and for economic growth to resume is misplaced.The Premier cannot avoid the reality that she has consistently underestimated the impact, depth and length of the recession. She has failed to acknowledge that unsustainable spending before the recession left Bermuda ill equipped to deal with it and she and her advisers failed to recognise how severe it would be. Now she is putting in measures that might have helped a year ago, but are no substitute for real policy changes that will genuinely reset the economy. So while the freeze on payroll tax for retailers is welcome, it does not address the real problem, which is the high cost of doing business in Bermuda. A permanent reduction in payroll tax across the board is the kind of measure that would make Bermuda more competitive at a stroke, and would get away from the patchwork quilt of different forms of relief for different, mainly loss-making industries.Similarly, the airport duty measures, while welcome to retailers in the short term, are not a long-term solution either. A reduction in duties, and a rationalisation of duties to one, or at most two, bands to reduce red tape would be a much greater help to retailers and other importing businesses because they would lower prices and make Bermuda more competitive. All of these measures would also help to put Bermudians back to work, boost tourism and help make Bermuda more attractive to international business. As Ms Cox noted, the freeze on payroll tax will mean a drop of $3 million to $5 million in payroll tax revenue, although economist Craig Simmons has said he thinks the drop will be larger. It is unlikely that that money will be made up in the short term, so the cut will also increase Bermuda’s already large debt. The hope would be that the cut would result in increased revenue in other parts of the economy, but that is unlikely to materialise within six months.In the absence of a long term plan, further reductions in Government spending are needed. This newspaper has already called for cuts in many areas, with a particular focus on reductions in overseas offices, overseas consultants and travel, so that the spending cuts do not impact the local economy. Similarly, contracts with overseas consultants and service providers should be slashed unless they are absolutely essential.These cuts alone may not make up the shortfall. Nor would a reduction in Ministerial and MPs’ salaries, but they would still have the symbolic value of showing Bermuda’s leaders are sharing the sacrifices of the rest of the community. These ideas and more need to be debated and acted on urgently. This week, Economy Minister Senator Kim Wilson will stage the first of a series of meetings on the economy. It is vitally important that these ideas and more get aired and discussed. But it is critical that the meetings be more than words. Action is needed.