Statement.

This 1993/94 Budget is a false start, based on a false economic premise. The United Bermuda Party Government's economic blueprint thus degenerates into meaningless political rhetoric rather than economic discussion.

What the UBP Government has failed to realise is that to set a new economic agenda, the cornerstones of the economy must rest on twin pillars: One, economic stimuli; and two, education and training.

Mr. Speaker, the Minister has based this Budget on certain revenue assumptions. These are the factors which must come to pass if we are to experience the budgetary results that the Government is seeking. The first such premise is that tourism arrivals will increase by three percent over 1992.

Mr. Speaker, if one examines Table 9 of the Economic Review released by the Ministry of Finance dated February 1993, one will note that 1992 was the worst year for air arrivals during the period 1986 to 1992. A 3 percent gain would have us recover to the dreary results of 1991.

The PLP economists are not as negative about the abilities of the Clinton Government to the further effect of enhancing tourist figures. A PLP Government would have projected tourist arrivals at the 1990 level (up 7 percent). An improvement to 1990 spending levels would see visitor expenditure increase by as much as $40 million over Government's 1993/4 estimate. This would benefit the whole community, especially the retail sector.

The Budget assumption regarding foreign currency earnings is that the foreign currency generated by the international business sector increased by 1 percent. This again is not acceptable. Table 12 of the Economic Review shows the growth rate of foreign currency earnings over the 1987 to 1991 period.

Foreign currency earnings are dominated by wage earnings along with professional and bank fees. Table 13 shows the 1992 international business register growth at 2.6 percent with 7,271 companies on the register. One would expect that with the growth in the number of companies together with the growth in the number of people (1,909 in 1991 to 2,006 in 1992) as shown in Table 16 this would increase foreign exchange earnings by at least 5 percent to 7 percent. Examining these Tables together, it is obvious that Government have gotten their basic premise wrong, yet again.

Mr. Speaker, a one percent increase in international business foreign currency earnings is worth approximately $3.5 million. Thus the Country will benefit by a further $14 million should the growth rate be five percent rather than the one percent predicted by Government and again, there would be cause for encouragement among the retail sector.

Government has its priorities wrong. It is extraordinary that at a time when the community needs a helping hand, the UBP Government is proposing cuts, which exert a stranglehold on the economy. For instance, we see significant cuts in education. Even with the rising incidence of crime and drug abuse, we see cuts to the Police Force. The YHED grant has been halved since 1991/92, and there has been a freezing of grants to various institutions, which are dependent on Government assistance, especially in the present economic climate. The evidence overwhelmingly demonstrates the utter ruthlessness of the Government. They have sacrificed community interest for their own self-interest.

EDUCATION The PLP has always had education as a priority. A major pillar of the PLP Government policy would be to invest in training, re-training and education and also apprenticeship work schemes. Skills training is a critical element in any effort to re-tool the economy. The understudy programme would have teeth and would be closely monitored to guard against abuses by an effective PLP Government in charge.

A Penn and Schoen report on "Attitudes of Bermudians Towards Their Educational System and Proposals for Reform'' commissioned by the UBP Government was finalised in April 1992. The results revealed that the people of Bermuda were even prepared to pay a small tax for educational improvements introduced immediately. The Government are putting a sinking fund in place.

The question that has to be raised is whether the Ministry of Education faced with a dilemma as to its future direction would not be better served with applying the money to be allocated to this sinking fund towards current needs.

Would this $1.4 million be more useful paying for additional teachers, who are required to meet the special needs of our children. The very children, who require special programmes so they can be re-integrated back into the mainstream of educational development.

The Budget provides that $3 million be made available for education projects.

Again, we note the refrain "too little, too late''. This does not appear to be enough when there is so much to be done. In fact, the new prison complex has been allocated a higher priority than education. Mr. Speaker the Progressive Labour Party deplores the fact that Government continues to overlook the needs of the student population. This is not just in terms of the current lack of opportunities for education and training, and the lack of summer jobs for vacationing, college and university students. Also the Government seems to ignore the fact that education is a necessary investment for the future. It is short-sighted to view this investment purely as expenditure.

Although it may be sensible to see how best to effect improvements in the educational system, and how to streamline the Ministry, one has to be very careful not to use the planned review of the system as a witch-hunt and a means of making certain programmes the scapegoat. The consideration of long-range plans to reform the current system should not lead to putting on hold programmes which have been identified as of particular concern, and that have been termed inadequate. The Education Planning Team's recommendations about inadequate facilities and the need for more music and art teachers should not be deferred due to the proposed secondary school reforms.

Mr. Speaker, in last year's Budget Reply we stated: "Further we expect that Government will continue to sacrifice capital projects, especially where they have full autonomy with respect to the decision to stop, start or defer a project as with the prison, the incinerator and the school plans.'' Mr. Speaker, the Country's future is in its young people. In 1985, upon appointment, the present Minister of Education promised to fix the system. He appointed the Education Planning Team, which reported in 1989. He claimed to be committed to fully implementing his plan by 1994. Yet in a statement released to the Press yesterday, the Minister has said the plan is not expected to be fully implemented before the year 2001.

Mr. Speaker, this House approved $14 million for the refurbishment of existing secondary schools with the intent of creating Middle Schools in last year's Budget. In June of 1992 the Minister came to this House and outlined a transfer system for our schoolchildren, which results in a neighbourhood high school system being in place in September of this year. There was $14 million available in June, 1992 to ensure the needed changes would be made. Yet, in this year's Budget we see that, after not proceeding in summer 1992, this Government has no plans to create equal schools in summer 1993. We now learn that it will not be until 1997 that the schools will have equal facilities.

Mr. Speaker, this Government must be held to its commitment to the future. The PLP would have ensured that the necessary $14 million be included in this year's Budget. Table X, Schedule 2 (P. 56) shows that the Government's borrowing for 1992/93 is projected at $42.5 million while this year's figure is $26.8 million. However, Table XI, Schedule 3 shows that while Government has a statutory limit on borrowing of $185 million it is planning to be at $117.6 million at the end of this fiscal period. The PLP would have borrowed the additional $11 million (over the $3 million currently allocated) thus increasing the total debt to $129 million. This would be well within the $185 million statutory limit and this year's borrowing would still be less than last year.

Mr. Speaker, the bulk of the monies to be spent in this area would be in renovating the buildings themselves and this work should be done in the summer. It would help the community in the following ways: 1. The workmen for the prison site would be nearing the end of their employment there and thus would be available to move to this group of school sites; and 2. Bermudian young men, in particular, home from university for the summer could have jobs on these sites as well.

Mr. Speaker, the Minister of Education has indicated that twenty teaching posts are to be removed. This is an indication of the knee-jerk reaction to the short-term cash problems of Government rather than the execution of a sustained plan of development for our young people. The Minister of Education must move as quickly as possible to determine the number of teachers that will be required each year under the new school plan. A vision for the future is needed and the execution of a plan must begin.

POLICE, CRIME AND DRUGS In view of the rise in crime, increased drug abuse, crimes of violence against women and children, now is not the time for cuts in the Police Force.

A cut of 35 Policemen is not acceptable. We reiterate our call for a redeployment of Police. It would be preferable for civilians to be co-opted to do the clerical work thus freeing the Police to be more effective in their job of safeguarding the community.

A PLP Government would commission a review of the manpower needs for effective police deployment.

SOCIAL ASSISTANCE YHED has performed valuable service to this community and yet its programmes are under threat. At a time when family life is particularly vulnerable, and a recent Government survey on teenage sex showed an alarming increase in casual sex amongst young people. YHED programmes have enabled many teenage mothers to go back to school, yet the Government has cut these programmes.

Nearly all of the social services have been frozen. What makes this policy even more ruthless is that this is against the backdrop of a recession. The charitable dollar has declined and the future of these philanthropic institutions is under threat.

It would be different had the level of grants remained constant. Now there is much less charitable donation available due to the belt-tightening.

Mr. Speaker, the Minister of Finance has done a sleight of hand with regard to the social assistance programme. In this Budget the Minister states: "Funding for the social assistance programme within the Ministry of Health, Social Services and Housing has been increased by $3 million over the original 1992/93 estimate, bringing the total available funding for this programme in 1993/94 to $6 million.'' This is a totally misleading statement. The statement implies Government is providing a 100 percent increase in 1993/94 over 1992/93. This is not true, as while the original estimate was $3 million, the revised estimate for 1992/93 is $7.4 million. Thus, this year's estimate of $6.25 million is a reduction in funding of $1.15 million.

Mr. Speaker, surely the Minister has attempted to give the wrong impression to the people by using inappropriate figures. Again, a reduction of $1.15 million in funding will cause real difficulties for the people of Bermuda as at no point in this Budget has the Minister of Finance made an estimate as to job creation for Bermudians thus there is nothing to indicate that there will be fewer people on the Health and Social Services register in 1993/94. Mr.

Speaker, it is the PLP's view that this area will also be the subject of a supplemental budget increase after the election so as to address the needs of the Community.

Mr. Speaker, Government has attempted to address the needs of the unemployed via the Temporary Work Programmes. In Budget year 1992/93, over $1 million has been spent by Government. Table 16 of the Economic Review shows that there was a further job loss in 1992 of 971 jobs. Included in this job loss are 278 construction jobs and 188 hotel jobs. These are the very workers that the Temporary Work Programme was designed to help, yet Government is budgeting a contribution to this programme of only $100,000.

It is difficult to appreciate why Government has eliminated 90 percent of the funding in the current year for a programme whose "clients'' increased, not decreased. It should be noted again that from 1988 to 1992 the job loss in these two principal areas of employment has increased significantly. In the case of construction from 2,895 to 1,832 and in the case of hotels from 5,187 to 4,413 (743 jobs). We believe this is an area of gross underbudgeting which will have to be covered in a supplemental budget to be brought to this House later this year.

THE UNEMPLOYMENT INSURANCE SCHEME Mr. Speaker, in last year's Budget, the Minister of Finance included $50,000 to fund a study into the feasibility of an unemployment insurance scheme. The PLP reacted negatively to this and included the following comment in our Reply: "We know from many past experiences how long a Government sponsored study takes. We cannot realistically expect to see the implementation of any recommendations before the recession is over and Bermudians back to work and fully employed!'' Time, it appears, will prove us correct. There is no mention of an unemployment insurance scheme in this Budget. No funding has been set aside for those many Bermudians still out of work. Again, Table 15 shows 28,069 Bermudians working in 1988 compared with 26,358 in 1992, a fall of 1,711.

These people are in need, yet Government provides no support through an unemployment insurance scheme. Mr. Speaker, the question must be asked what did we get for our $50,000; we know what the unemployed did not get.

TASK FORCE ON EMPLOYMENT Mr. Speaker, at this time last year the Government also announced a plan to establish a Task Force on Employment. The stated aim was "to improve economic stability and the present employment situation''. However, during the past year it has become obvious that this is one of the many dozen Front Street teams looking at what they want Bermuda to become in the future. There is no focus on addressing employment needs of today. We are unaware of any Committee that has a commitment to improving employment conditions now. We challenge the Government to outline specifically during this Budget debate which Committee is actively seeking to develop new permanent jobs for the Bermudian worker today. Also we challenge the Government to report on the success of any such Committee.

JOB CREATION/SMALL BUSINESS There is little in the Budget that will stimulate new job development. The decision not to increase taxes across the board will not eliminate jobs but it has no impact on job creation. The Minister has adjusted the employment tax for small businesses. However, he stated "It is estimated that these measures will have a considerable beneficial impact on approximately 700 small businesses who account for about 70 percent of all those who pay employment tax. The above changes will come into effect on April 1, 1993. The resulting loss of revenue to Government will be approximately $800,000 in a full year.'' Mr. Speaker, this loss of $800,000 equates to an annual saving of $1,000 per small business or $250 per quarter. This will have little impact on the small business cashflow problem which the Minister states he wishes to address.

Mr. Speaker, a tax change which will cost Government $800 thousand and savings to each small business affected of approximately $250 per quarter must be recognised for what it is an election ploy. The tax changes on the surface have the appearance of being evidence of Government's commitment to small business. However, the reality continues to be that Government has no interest in the problems of small business.

The Minister of Immigration and Labour presented a paper to this House on November 17 entitled "Ministerial Statement on Employment Figures''. The statement showed that there were 3,589 businesses in Bermuda, of which 3,057 had less than 10 employees. These same businesses, representing 85 percent of all businesses in Bermuda, employed 7,176 people or 20.97 percent of all persons employed. As these businesses are small and the employees, on average, receive low wages it is estimated that the business portion of the Hospital Levy paid annually by these businesses may be in the region of $3 million to $4 million. A PLP Government would have waived the business portion of the Hospital Levy for all these businesses this year. This waiver would have met both of Government's stated objectives of easing cash flow problems and encouraging job creation. A PLP Government would recognise that the continued success of our Country will be determined by the continued success of the small businessman.

SMALL BUSINESS DEVELOPMENT CORP.

To further enhance the success of the small business, the PLP would totally restructure the Small Business Development Corporation. We would create an environment which would see the Small Business Development Corporation not only guaranteeing bank loans for small businesses but, in fact, assisting businesses by positioning itself in the middle and being the lending party itself. Borrowing money from the local banks at the going rate but lending to small businesses at 3 percent, 4 percent or 5 percent. We would envision the Small Business Development Corporation having on its own payroll highly skilled business mangers, who would visit small businesses on site and assist them in the technical areas. We would require the Small Business Development Corporation computer specialists to assist the small businessmen in computerising and making this advance possible. The small business would have a spokesperson in the form of the Small Business Development Corporation.

HOME OWNERSHIP Mr. Speaker, we believe the present method of assessing stamp duty on death is in fact inequitable. We would like to lessen the burden of stamp duty on families for whom the bonus of home ownership has become a millstone around their families' neck after death and their families face an hefty stamp duty bills.

Mr. Speaker, Government has attempted to give the impression that Estate Taxes have been eased by raising the exemption level on estates from $20,000 to $30,000. However, this does not go far enough. Many people find cost the Country approximately $70 thousand. This must be regarded as a vote-winning measure for St. George's! YOUTH Mr. Speaker, the PLP is pleased to see $1.4 million included in the Budget for the further development of the National Stadium. This House should be reminded that the original 1991/92 estimate approved by this House was $2.6 million for spending at the National Stadium. Since that time a 1991/92 actual was $112,000 and the 1992/93 revised estimate is $100 thousand. Thus, while we can be pleased with the $1.4 million budgeted, this figure is, in fact, almost half of that budgeted for two years ago. Our position, consistent throughout, is to see progress with the development of our National Stadium.

Government has made many statements over the past four years about its concern and commitment to youth. This year's budget is devoid of all such statements.

The youth theme seems to have been dropped by Government in recognition of its failure to provide for young people as evidenced by the National Stadium, cuts in Education, Social Assistance cuts and its failure to provide policies to create new jobs tailored for our young people. This UBP Government has certainly failed young people in Bermuda.

BERMUDA INC.

Mr. Speaker, the Minister of Finance has refused to give up the term "Bermuda Inc.'' He has decided to redefine the term and to attempt to include every person in Bermuda as a member of Bermuda Inc. We have very clearly stated Bermuda is no longer a private club and must not be run as such.

This year, the Premier attempted to give the impression of listening to the concerns of the Bermudian people. Instead, the reality has been the creation of dozens of Committees dominated by Front Street as well as many people on work permits. However, there is a noticeable absence of many segments of the indigenous Bermuda community. It is amazing to believe that having decided to become a listening Government, this Government would listen to and value the views of those who are temporarily here to the exclusion of those who are committed to this Country.

The Minister of Finance gave us a list of all the members of Bermuda Inc. It is fine to call upon all to work together and to avoid conflict at all costs, but if one really examines the comment, it actually means that if one is unfairly done by that party should avoid conflict. This is not the appropriate position to take. The position of a PLP Government will always be the desire to right the wrong rather than attempting to get the weaker party to accept the disadvantaged position as is being recommended by the Minister of Finance.

Mr. Speaker, a PLP Government will ensure that all Bermudians enjoy their rightful place in society and are given every opportunity to grow and to succeed in this our native land.

Mr. Speaker, the Minister of Finance has shamelessly borrowed from the PLP Throne Speech of November 1992 as well as our past budgetary proposals in developing this year's budget. Again we say too little, too late! Mr. Speaker, we commend the Hon. Finance Minister, Dr. David Saul, on his sartorial taste. He is in borrowed raiment, having stolen our clothes. A new twist on the story of the "Emperor's new clothes''. Only this time the emperor does in fact have clothes on -- ours! Any right thinking voter who considers the UBP Government's Budget and the Progressive Labour Party Budget Reply will see that the PLP is the Party to lead the country today. Just as the Americans have voted in a new Government, so too the people of Bermuda must do the same.

It is time the PLP gets the credit for doing right by this Country.

Mr. Eugene Cox.