Opposition Finance Minister Bob Richards believes the Island should expect Government revenues to continue to fall.

He spoke after the Ministry of Finance revealed the Island's revenues were down 3.7 percent, or $14.9 million, compared to projections made in the 2009/2010 Budget.

"I think we should expect more of the same for the next few months," he said. "Because of the time lags involved, all other things being equal, it is going to take longer than others for us to recover from this recession.

"We were still expanding when the US economy started to contract. We cannot expect to come out of this at the same time others do."

He continued: "And we don't think other things are equal. We are losing business to our competitors. I was just away with Bermuda International Business Association and I learned that certain counties in Ireland are giving companies cash to set up there.

"That is our competition right now. So we will have to try harder if we want to get new business and keep our current business. Things like term limits and creating an unwelcoming environment are not helping Bermuda."

Mr. Richards said he was not surprised the Government has found itself in the current position.

Government had initially projected a $2.7 million surplus for the 2009/2010 Budget, however it has now been revealed its revenues are $14.9 million below projections for the first five months of the year. This means that if Government revenue and spending stay in line with the Government's projections for the year, Bermuda is facing a $12.2 million revenue deficit with seven more months of the financial year to go.

In March this year, when the Budget was first announced, Mr. Richards said that the Government's view that the recession would only last 18 months seemed unlikely.

At the time, he said: "This Government, as everyone knows, is the master of spin. The problem is they often believe their own spin. This is a time for [a] hard-nosed reality check.

"For instance, every Government I can think of is experiencing huge declines in revenue, yet this budget forecasts a slight increase with no tax increases. It leaves virtually no room for error. It is not reality-based thinking."

He also pointed out the Government had left itself with little cushion and would be faced with running a current account deficit and borrowing money to finance operations, something he described as "concerning".

Five months ago he also recommended Government implement a hiring freeze as paying and training the Civil Service now accounts for approximately $500 million of Bermuda's $969 million budget he believes a freeze is needed now.