It should assure confidence in the business sector in that it does not raise taxes and can be considered to be business-friendly. At the same time it promises prudent investment in some of the social needs of the community, especially in housing, education, health and public security.

The Progressive Labour Party's greatest challenge -- to overcome the perception that it cannot manage the economy and that, once in Government, would hike spending and taxes -- has been dispelled in this Budget at least, which is prudent and careful.

Indeed, taxes this year will be barely increased as Government believes that continued economic growth, a healthy Budget surplus left behind by the outgoing Government, more effective tax collection and greater Civil Service efficiency will meet its increased spending goals.

If the Budget has a weakness, it lies in these assumptions. If economic growth slows, tax revenues could decline as well. And if Government is unable to find efficiencies or collect more taxes, then this could result in revenues falling below projections at the same time that spending rises; a recipe for disaster.

There will be some people who will be disappointed with the Budget. Mr. Cox confounded some pundits when he committed to continuing the previous Government's plans to renovate 100 derelict houses, but made no commitment to expand the affordable housing stock further.

Perhaps retailers and hoteliers will be the most disappointed with the Budget.

The fact that the Minister, perhaps wisely, has set the Tourism Ministry the target of halting the decline in tourism arrivals means that both sectors can look forward to little more than a flat year at best in 1999; that will be bad news as both sectors struggled in 1998.

Tourism Minister David Allen spent a good deal of time in Opposition complaining that the tourism industry was being taxed to death and had proposed a range of tax concessions, ranging from seasonal tax breaks to a lower head tax for cruise passengers. None of this has come about yet, although it should be noted that none of these taxes have been increased either -- at least so far.

Retailers hoping for reductions in Customs duties in order to reduce their inventory costs and help them to be more competitive will be disappointed as well. There will be no relief for them, and they will have to make an effective case to Government to get it.

Mr. Cox has continued to fund a number of projects which should improve the quality of tourism service and the range of activities available to visitors.

In the long run this should help to turn around the industry, but it is vital that it should be able to compete on price as well as service and it is to be hoped that Mr. Cox will find ways in the future to give all involved in the sector some relief.

Mr. Cox also notes the high level of Government debt that has been accrued in the last ten years. He points out that much of this debt was taken out in a period of economic growth and worries that it will be a drain on the Country if the economy slows or shrinks. He is right to be worried. But he is silent on how he plans to reduce the burden, only promising to stay within the statutory debt limit.

Those points aside, this is a good Budget. The fact that few taxes are being raised should help the economy to continue to grow. At the same time, the Government is committed to helping the "have-nots''.

Budgets are officially described as estimates of revenue and expenditure and they are just that: estimates. But if all goes according to Government's expectations, the new Government will have passed its first major test.

HOUSE OF ASSEMBLY HOA