Premier Paula Cox delivers her first Budget in her new joint role as leader of the Country and Finance Minister tomorrow.In that sense, this is her opportunity to show what she can do when she is more than “a cog in the wheel” and to give a genuine sense of where she wants to take the Country.To some degree, she faces a Catch-22. A harsh budget with deep cuts will only show that had she taken steps in previous years to reduce spending, some of the current pain could have been avoided.And if the Budget does not take meaningful steps to tackle the deficit and to get the economy moving, it will suggest the Government cannot handle the economic crisis the Island is in.And it is a crisis, which so far shows little sign of easing. Just yesterday, Government released statistics showing that the Retail Sales Index fell for the 32nd consecutive month. It was also announced tourism arrivals rose by four percent compared to 2010, but all important air visitor arrivals fell by 1.5 percent.In the meantime, the international business sector remains generally flat, with few signs of jobs growth in Bermuda.Against this background, it seems almost certain that Bermuda will register another fall in gross domestic product instead of the one percent increase forecast last February.What also seems certain, and the widespread reports of cuts in Government departments seem to confirm this, is that Government will miss its revenue targets again as well.So deep expenditure cuts now loom. Ms Cox has said she has identified $150 million in savings. But she has also said she plans to do it without cutting jobs.Cutting around 15 percent out of a Budget with job cuts would be hard enough. But to do so without cutting jobs, except through attrition, means that the scale of the cuts in the rest of Government would have to be doubled; an even taller order.At the same time, some areas need to be “ring fenced”. Areas of Government spending that promote economic growth should be protected as they provided a net benefit to the Government’s finances and to the economy as a while, assuming, as always, that they are spent wisely.But marketing spending on tourism and international business development should be protected. So should programmes like the Small Business Development Corporation and the Economic Enterprise Zones.The Police, reported to have been told to make $16 million in cuts, should not have to, at a time when violent crime threatens the Island and poor economic conditions mean that crimes of desperation are likely to rise. The United Bermuda Party Government made this mistake in the early 1990s, The Progressive Labour Party Government should not repeat it. But some cuts may be possible here, including the detachment at Government House.Education and training, along with support for those who find themselves in financial difficulties, must also be protected, as these are areas by which Bermuda’s economy can grow.But almost everything else can be cut to some degree.This newspaper supports the idea that Ministers and MPs should take a wage reduction. At a time when many people have lost their jobs or had their earnings reduced, this would be a demonstration that the Island’s leaders feel the pain too. Bermuda’s offices in London and Washington, DC can go too.On the revenue side, this newspaper believes that moderate cuts in payroll tax would create jobs and would end up being revenue neutral at the same time that they would help the economy.But to get the revenue necessary to keep the Government running and to reduce debt levels, even with the cuts, some tax increases will be necessary. This newspaper thinks the top bands of land tax payers could survive an increase, and so could drinkers and smokers. So Ms Cox could raise “sin taxes” without too much pain.There is almost no one who would want to be in Ms Cox’s shoes tomorrow. But it is in making hard choices that leaders prove themselves anyone can make easy ones. Ms Cox needs to make the hard choices now. And she also needs to make the right ones.