We not only want to woo the international businesses and their financiers here, but we also want them to be encouraged to stay. Let us look at making our fees and rents more competitive so that the cost of doing business here, compares favourably with competing jurisdictions in the Caribbean and elsewhere. We want the insurance companies business. We want mutual funds company business. We want trust business to consider Bermuda the place to be.

The PLP welcomes the addition of $500,000 for marketing international business. We believe that the International Companies Ministry would be able to assist significantly in marketing this Island.

Mr. Speaker, I do not think that the UBP Government is that naive, or that the people of Bermuda are naive enough to believe that if there is a change in Government then our international business will dry up. Businesses do not make decisions dependent on emotion and sentiment but based on hard economic reality. They abhor instability. Right now, with all this talk about a Commission of Inquiry, a referendum and Cabinet resignations, Bermuda, under the UBP Government does not appear to be as stable at it should be. We are concerned about the message this is sending to the international business community.

DELEGATED AND LEGISLATIVE AFFAIRS In last year's PLP Budget Reply, we deplored the cutbacks to the Police Service. So, we now welcome the fact that this year's Budget reflects an increase in their allocations -- albeit by a marginal sum. However, much more remains to be done, not just increasing the numbers of parish constables, but reinstating, and indeed increasing the number of police cadet training placements Government so ill-advisably reduced last year.

LABOUR AND HOME AFFAIRS Mr. Speaker, the PLP believes that real employment opportunities for Bermudians are closely linked with immigration, education and training policies.

Further, the PLP feels that it is imperative that emphasis be placed on the fostering of trust and understanding between organised labour and management.

Our concern for industrial harmony also envisions a basic code of behaviour which would guide both employer and employee towards better industrial relations.

Meanwhile, the PLP observes that last year's Throne Speech revealed that the UBP Government was still awaiting the Task Force on Employment and the Commission on Competitiveness Report while unemployment statistics in Bermuda soared. These two study groups have yet to report and one of them has members who have accused the Government of playing politics with that particular Task Force and the release of its findings. After continual pressure from the PLP, only recently has the Government decided to address the question of re-training and reviewing of the operations of the Government Employment Office.

In order to spur the UBP Government into meaningful action over Bermuda's record high unemployment statistics, the PLP will: Move to limit categories that are open to non-Bermudian work permit holders, and in which there are still qualified, unemployed Bermudians available. The basis for our concern and action is set out in the following table.

TABLE 2 UNEMPLOYMENT STATISTICS OF BERMUDIANS (by age group and sex) Age group Total Male % Fmle % 16-25 234 102 18 132 23 26-35 169 92 16 77 14 36-45 116 60 11 56 10 46 44 31 6 13 2 Totals 563 285 51 278 49 Source: Government Employment Office It can be seen from the above Table 2 that it will not be sufficient for the relevant authorities to sit and wait for the employment statistics to improve.

Therefore the PLP will ensure that Government revamps the Government Employment office, instilling in it a more pro-active role in reaching out to the community and facilitating job placement of unemployed Bermudians; and at the same time; cause Government to review the terms of reference of the Labour Advisory Council to facilitate: (a) the convening of more frequent meetings of the Council as an effective means of anticipating and eliminating problems affecting Labour Relations. (b) the promoting of the Council's role as an advisory body to the Ministry of Immigration & Labour.

COMMUNITY AFFAIRS Small Business Development The significant contribution of small business to our domestic economy must not be overlooked. The trend is clearly toward smaller companies, employing an even greater percentage of the work force. This trend locally mirrors what is happening in the United States and Canada. Whilst overall employment of Bermudians in the work force decreased from 26,706 in 1991 to 26,486 in 1993, a reduction of 220 persons or one percent, the actual number of Bermudians working in activities traditionally associated with `small business' registered an increase as Table 3 shows.

TABLE 3 RETAIL SECTOR BY SIZE OF FIRM & NUMBER OF JOBS Firm size 1992 1982 1992 1982 Chg Chg (No. jobs) Firms Firms Jobs Jobs Firms Jobs 1-9 282 200 898 707 41 191 10 78 84 3,337 3,601 (6) (264) Tot 360 284 4,235 4,308 35 (73) Source: Manpower Surveys A further confirmation of this trend is the growth of firms and employment in the retail sector during the period 1982 to 1992. Firms employing between one and nine staff increased from 200 in 1982 to 282 in 1992, an increase of 82 or 41 percent. At the same time employment by these firms increased from 707 in 1982 to 898 in 1992, an increase of 191 or 27 percent. During this same period, the larger firms, i.e. those employing an excess of 10 staff reduced in number from 84 firms in 1982 to 78 firms in 1992, a reduction of six or seven percent. Employment in these firms reduced from 3,601 in 1982 to 3,337 in 1992, a reduction of 264 or seven percent as Table 3 shows.

The Progressive Labour Party has always shown a firm commitment toward the development and success of small business. As recent as "The Budget Reply'' in 1993, we advocated the restructuring of the Bermuda Small Business Development Corporation, to make this QUANGO responsive to the needs of today's small business.

Mr. Speaker, the Bermuda Small Business Development Corporation was created by an Act of Parliament on May 30, 1980 with an initial capitalisation of $680,000. In 1994, the capitalisation remains at $680,000 and the Corporation may not at any time lend directly one half of its capital or guarantee four times its capital. This restricts the Corporation to direct lending of $340,000 and guarantees of $2,720,000. We perceive these amounts as totally inadequate in light of the trends. We would increase the capitalisation of the Corporation to $1,500,000 such that direct lending and guarantees can be increased to $1,250,000 and $6,000,000 respectively.

The Corporation provides a Bermuda Government guarantee to local lending institutions. These institutions then make a `riskless loan' to a borrower.

Although there is no risk to the lender, the borrower is still required to pay interest at normal commercial rates. We believe that the small business borrower should be the beneficiary of this guarantee in the form of lower interest payments to the lender.

Mr. Speaker, we advocate the study of alternative sources of capital formation for financing small business, including the establishment of a privately financed `Venture Capital Fund'. Such a fund, managed by the Small Business Development Corporation, would evaluate new business proposals in light of their contribution to the overall Bermuda economy and would provide initial financing and management support to assist in the growth and development of such businesses.

We continue to believe that the Corporation should avail itself of retired, highly skilled business managers to assist small businesses and individuals in the preparation and evaluation of business plans, budgetary concerns, cash flow analyses and computerisation. It is only after we equip the small business manager with the skills and resources to remain competitive in today's ever changing business environment, that we see the real potential of small business in Bermuda.

Mr. Speaker, you may recall that in the PLP Budget Reply last year we advocated that small businesses should be granted relief from the Hospital Levy. This request was ignored. A number of small businesses are now in debt to the Government, and are still reeling from the effects of the recession. We repeat our call for this relief to be provided to small businesses.

TOURISM Mr. Speaker, the illogical and misleading submission by the Honourable Finance Minister that his policies, including the 1990 1 Budget, allowed Bermuda to ride out the recession relatively comfortably is nowhere more inaccurate than in tourism.

Far from helping Bermuda to "weather'' the effects of the recession, increases in passenger head tax, duties on wines and spirits, fuel oil that hotels consume and other taxes directly or indirectly affecting components of our tourism industry only exacerbated the problems facing Bermuda, and made it even more difficult to compete with other destinations.

In contrast the Progressive Labour Party espoused policies that would stimulate the tourism industry and our ability to raise foreign currency revenue. The PLP has said and continues to say that Bermuda must: 1.Pay more attention to developing the Continental European tourism market; 2.Revamp a staid and stuffy advertising campaign; 3.Ensure that the tourism advertising budget keeps abreast of inflation so that we do not lose advertising buying power at a time of increased challenges and more aggressive media campaigns by our prime competitors; 4.Market more aggressively adventure sports activities, such as SCUBA-diving, deep-sea fishing, parasailing, for example; 5.Concentrate more on developing key target audiences and further promote ecological tourism and the cultural attributes of Bermuda and Bermudians; 6.Increase the number and variety of activities, particularly those that are entertainment oriented, in the winter and shoulder seasons; 7.Encourage the enhancement of entertainment opportunities in our hotels, utilising Bermudian entertainers in particular; 8.Assist Bermuda small properties in promoting themselves more effectively, and becoming more economically viable; 9.Put more muscle behind Government's involvement in the marketing, convention and incentive and travel business; 10.Develop a programme of joint venture air charters to develop new gateways; 11.Provide tax incentives to encourage the lengthening of the cruise ship season during the shoulder periods, and further scale taxes and fees which affect the tourism industry overall to greater reflect the seasonal nature of the industry, and 12.Increase the number of regular weekly cruise ships to six, including a vessel dedicated solely to St. George's.

The pressures of the recent General Election forced the UBP Government to belatedly adopt some of these long-standing PLP proposals, albeit often in a piecemeal and ineffective way.

The cruise ship passenger tax was reduced for the dead-of-winter months -- but not for some of the shoulder months, and other taxes and fees were not touched.

A dedicated cruise ship for St. George's was finally reluctantly conceded, but we still need a weekend cruise ship.

Modest additional funding was arranged for European promotions and talks are underway to develop a risk-sharing air service out of the European Continent.

However, the amount expended for increased marketing in Europe is just a drop in the bucket. Any new air service cannot succeed without adequate seed money being devoted to the on-the-ground sales efforts in markets such as Germany and Switzerland.

Thus, we are disappointed that despite some increase in advertising in Europe, there is an overall reduction in the funds allocated to the Department of Tourism's UK representational office. This is a total contradiction on Government's behalf.

Similarly, while there is a greater increase in the Department of Tourism's overall budget and in proposed advertising media expenditure specifically, the amounts of approximately three and four percent, respectively, will barely keep pace with inflation in the advertising area.

While we are happy to see some downward adjustments in the rate of customs tariffs on certain merchandise favoured by our visitors such as perfumes and watches (the latter by only one and one quarter percent, which is negligible) this is nevertheless a case of too little too late. Instead we should follow the lead of some competing destinations and totally eliminate import duty on certain select items, and thus restore Bermuda's reputation as a top shopping destination of value. Additional visitor arrivals resulting from this would more than offset any modest duty revenue losses by generating more hotel occupancy tax and passenger tax revenue, for example.

HEALTH, SOCIAL SERVICES, FINANCIAL ASSISTANCE & HOUSING Housing is a basic human right, and has a great impact on family life. The number of empty rental units in the marketplace is of mounting concern, not just for landlords facing mortgage payments and an increase in land tax.

Tenants recovering from the recession cannot afford the rents, and also face hardship. The PLP supports the continuation of the Housing Assistance Programme and believes the Department of Financial Assistance can greatly assist tenants in meeting the cost of necessary accommodations.

The 1994 5 estimates do not address the demand for manpower to carry out the necessary social programmes that families in need require.

In this Budget Statement, the Government has allocated approximately $9 million in its budget as funding for the Social Assistance Programme. Whilst the statistics confirm that this level of funding is still inadequate in light of the levels of persons still unemployed, we believe that these funds would be better spent in an Unemployment Alliance with the private sector. Our statistics confirm that a large percentage of the unemployed either lack the necessary job skills or require retraining to become productive citizens in the private sector. We would like to see Government with the private sector, where applicable, making the social assistance programme more productive through work raining schemes.

"Give a man a fish, he has food for a day; teach a man how to fish and he will have food for a life time''. That is also the PLP's philosophy. It is our firm belief that a Government rivate Sector partnership can most efficiently achieve the long term objective -- the training and re-training of our citizens in the work place -- in order to better utilise our limited manpower resources. The register for unemployment shows a reduction from 1,089 unemployed persons at the end of April, 1993 to the end of October, 1993. Then the number of unemployed was 563 persons. This is still unacceptable.

Government created a Temporary Work Scheme in the Works & Engineering Department as a result of the numbers of Bermudians added to the unemployment role during the recession. While the actual expenditure for the Temporary Work Scheme in 1992 3 was $1,210,000, the revised estimate for 1993 94 is $731,000 yet the budget for the 1994 5 year is $503,000. The erosion in the funding of this highly successful programme which has been the saving grace of many a Bermudian family is of concern to us.

Table 2 shows the unemployment statistics of Bermudians by age group and sex.

These figures show that of a total of 563 unemployed persons, 403 or 71 percent were in the 16-35 age group. These figures can be further disaggregated to show that 234 persons or 41 percent of the total were in the 16-25 age group.

CAPITAL DEVELOPMENT Mr. Speaker, the Government's Capital Development Programme is expected to cost some $47.2 million. The Government intends to continue to raise some of the funding through prudent borrowing and in this regard proposes to raise $20 million through a further local bond issue.

Mr. Speaker, we note that the UBP Government have radically changed their position with respect to borrowing for capital projects. Now they are more in line with the position that we in the Progressive Labour Party have been advocating for many years. We remind them that in the past they loudly criticised us when we recommended that large scale capital projects be funded by a combination of self-liquidating loans through the use of prudent borrowing. To this Mr. Speaker, we say, "Imitation is the sincerest of flattery.'' WORKS AND ENGINEERING Mr. Speaker, the Finance Minister indicated that in 1990 1 government, in anticipation of a prolonged period of economic uncertainty, provided for substantial increases in spending on essential social programmes and capital projects. We feel however government did not spend as much as they could have on capital projects and other job intensive schemes. Government has also indicated that the economy is on the upswing. If government had the foresight it claims, it should have realised that many of the unemployed during the recession would have been employed had government undertaken a more ambitious scheme of capital projects.

Continued on page 7