Budget Statement, which was delivered in the House of Assembly on Friday. The first part of the full text of the reply was carried in Saturday's newspaper.

Other pieces of legislation, which are important to the competitiveness of our international business sector, have been delayed as well. They include the Trustees Amendment Bill, the Limited Liability Partnerships Bill and enhancements to our insolvency legislation. We recognise that it takes time for a new Government to get up to speed on these issues. However, there is mounting concern that unless this legislation moves forward promptly, Bermuda's business community will be penalised by missed opportunity costs and loss of its competitive advantage.

PENSIONS Countries throughout the world are grappling with the challenges of a rapidly ageing population and the consequent pressures on existing government-sponsored pension schemes.

Fortunately, in Bermuda, we have not only recognised the challenges but have also enacted legislation, "The National Pension Scheme (Occupational Pensions) Act 1998''. This legislation gives us a firm foundation and outlines a process scheduled to start in July of this year. In order to implement the scheme, however, the PLP Government must take a number of important steps. One is the appointment of a Pensions Commission. The second is the drafting of regulations that will set out details of such items as pension portability, allowed investments and protections for both employer and employees.

At this point, it would appear that the PLP Government has dropped the ball.

The Commission should have been appointed in 1998, and no evidence of regulations has been seen by the private sector. Private sector pension providers have already done extensive planning to meet the July 1st, 1999, commencement date. Delays in implementation could create confusion and incur unnecessary expenses and lost time for both service companies and employers.

The existing Contributory Pension Fund (CPF) is financially sound, with some five to seven years of buffer, and it provides a useful supplement to the incomes of many senior citizens.

Last year, the PLP stated, "An International Monetary Fund report indicates the scale of the (pension) problem and urges governments to act fast.'' If the PLP understands the need for speed, why are they so slow to act? It is crucial that the new National Pension Scheme be implemented as soon as possible to ensure that our senior citizens have a reliable source of income in their retirement years.

GOVERNMENT DEBT We agree with the sentiments expressed in the Budget Statement that the proceeds of Government borrowing have been appropriately invested in the capital stock of the country. In the past, United Bermuda Party Governments borrowed prudently to finance large capital projects in much the same way that a prospective homeowner finances a mortgage. Most Bermudians have regarded projects such as CedarBridge Academy and the Tynes Bay incinerator as welcome investments in infrastructure that would also benefit future generations.

The policy of borrowing only for capital expenditure, the creation of a sinking fund to put money aside every year to retire the debt and the self-imposed ceiling on borrowing of ten percent of GDP all speak to the careful and conservative manner in which successive United Bermuda Party Governments have managed Bermuda's finances. Indeed, the AA1 ratings on our sovereign debt by Moody's and Standard and Poor's relate directly to Bermuda's significantly lower debt ratios compared to most other industrialized countries with ratios ten times higher. In short, there is no Government debt problem in Bermuda.

However, if the PLP Government were really concerned about the current net level of Government debt -- which amounts to only 6 percent of GDP -- it could have redirected some of the $35 million in increased expenditure toward reducing the debt. Perhaps the Finance Minister could also explain why he has added another $17.7 million of debt to the 1999-2000 Budget.

We recommend that the PLP Government give immediate consideration to refinancing the existing debt while it is still riding on a strong United Bermuda Party economy and while interest rates on quality debt are lower than they were when it was originally financed. A reduction of only one-quarter to one-half of one percent on the debt interest rate could save the taxpayer from $450,000 to $900,000 in reduced annual interest payments. The Ministry of Finance held discussions on this subject last fall, and they should be pursued without further delay.

TAX REVIEW The extensive tax review commissioned by the United Bermuda Party Government was completed by the consultants in late summer, 1998. Copies of the review were circulated to a limited number of private sector representatives for initial feedback before releasing it for public discussion. The report should be released now. We expect it will confirm that the long-term impact of the Bermuda tax system is roughly proportional across income groups. It should also confirm that Bermuda's tax system may be as progressive as possible for a small country that is dependent for its economic prosperity on highly mobile capital and skilled professional labour. Although not all of the consultants' recommendations were endorsed, a United Bermuda Party Government would have moved ahead in this Budget with the recommendation to introduce a scheme allowing Bermuda's retailers to offer duty-free shopping for visitors. Given the promise in the PLP election platform to "introduce duty-free shopping for visitor-oriented merchandise'', we are surprised that this relief measure was not introduced in the PLP Budget.

TELECOMMUNICATIONS Bermuda's continued economic growth will depend on a strong telecommunications infrastructure. Recent handling of deregulation issues has been muddled at best. We are concerned that the long-term outlook for this key sector will be damaged unless the management of key decisions improves significantly.

There are also growing opportunities for global telecommunications infrastructure providers to use Bermuda to support their international business. Government must develop clear policy guidelines for their operation in Bermuda and consider customs duty relief on equipment to encourage this potential new source of jobs.

EDUCATION Over the last few years the United Bermuda Party Government has invested heavily in education. In last year's Budget alone, a total of over $97 million was invested in education, and over 46 percent of new Budget money was allocated to this area. We will continue to support investment in education, because our children deserve it and Bermuda's future depends on it.

The United Bermuda Party Government has had notable successes in education.

The well-received EPT report in the late 1980s set out the plan for educational reform. This led, among other things, to the elimination of the 11 plus exam, the establishment of middle schools, a new Bermuda curriculum and the completion of CedarBridge Academy in 1997. We recognise that we did not achieve everything we had hoped to accomplish.

The PLP Budget allocates a further $5.65 million in new money to education.

With a change in government, we feel that this is an appropriate time to ensure that our considerable investment is really working for the maximum benefit of our children, their parents and Bermuda's future. Accountability must be strict, value for money must be demonstrated and individual school results should be benchmarked and made public.

The 1997 Curriculum Management Audit and a more recent Management Services review of the special education program highlighted deficiencies in the delivery of education in Bermuda. While some progress toward improvement has been made, more of the recommendations contained in these reports should be implemented to achieve greater efficiencies and greater benefits for our children.

HEALTH CARE In response to the alarming increase in Bermuda's health care costs as a percentage of GDP, the United Bermuda Party Government commissioned the 1996 Health Care Review, or the "Oughton Report'', a detailed examination of Bermuda's health care system. This was followed by the 1998 "Bermuda Health Care Strategic Planning Report'', prepared by Arthur Andersen in collaboration with the Bermuda Hospitals Board, medical practitioners, insurers and the Department of Health. These efforts led to establishing eight key initiatives for improving the quality of care, improving access to care and containing the cost of care.

Serious work has begun on two initiatives: one, the implementation of comprehensive disease management programmes for those suffering from asthma, diabetes and congestive heart failure; and two, establishing partner relationships with overseas health care providers to decrease costs, improve access to treatment facilities and provide medical training opportunities for Bermudians.

We are pleased to see that the PLP Government has allocated $1 million in consultancy fees to continue the implementation of the strategic initiatives.

As we pointed out in last year's Budget, in 1996 health care costs consumed 4 percent of the average Bermudian's income, and this is expected to rise to 8 percent by the year 2010. Health care costs as a percentage of GDP are estimated to rise to almost 12 percent in 1999 from 7.3 percent in 1991, a bill ultimately paid by consumers and taxpayers.

However, it is not sufficient for the PLP Government to simply promise consultancy services. Bermudians need to hear the PLP Government's plan for containing health care costs.

We urge the PLP Government to recommit to the eight strategic initiatives, including the recommendation to evaluate the impact of and develop regulations and quality standards for physician-owned ancillary services and equipment.

Information from the Health Insurers Association of Bermuda shows that the claims cost for private laboratory and diagnostic facilities grew more rapidly than any other claims category during the period 1993-1997. Such regulations would lower costs by reducing inappropriate use of such services, reduce the inherent conflict of interest between the physician and the provision of these services and protect the consumer by setting quality standards.

We would also suggest that the PLP Government consider providing free prescription drugs and eyeglasses for seniors in financial need, an initiative featured in "Keys to Partnership'', the United Bermuda Party's five-year plan for Bermuda's future.

HOUSING Bermuda's increasing affluence has put pressure on the availability of affordable homes, whether for rent or purchase. While we are pleased that the new Budget supplements funding for one hundred new affordable housing units, which were announced in the summer of 1998 as one element of the United Bermuda Party Government housing initiative, we have not yet seen a comprehensive housing policy from the PLP Government. Without such a plan, piecemeal spending that corrects just one aspect of a complex issue may not, in the long run, be an effective use of the taxpayer's dollar. Bermudians, particularly those personally affected by the housing crisis, need to know what the PLP Government intends regarding the 54 homes at Southside and whether it will proceed with renovating the over-100 derelict houses identified for this purpose by the Bermuda Housing Corporation.

PUBLIC SAFETY Over the last few years, funding provided in United Bermuda Party Government Budgets toward the successful Police Service civilianisation programme has supported the addition of 61 positions. This has allowed the redeployment of trained police officers from desk and administrative jobs to community-based policing and critical areas such as narcotics.

Unfortunately, due to difficulties in recruiting Bermudians, there are still many empty positions within the Police Service.

Opposition replies to the Budget While we support wholeheartedly the active training of Bermudians for these positions, we question whether the re-establishment of the old Cadet Scheme -- which was only marginally successful in producing trained Bermudians for the Police Service -- is an appropriate use of taxpayer money.

We recommend using the facilities at Bermuda College to develop an associate degree programme in criminal justice and law enforcement. Graduates would form a pool of trained and dedicated Bermudians with career opportunities in the Police Service as well as the prisons and private security firms. We would combine this with financial incentives in the form of scholarships and/or reimbursement for those who, upon graduation, agree to work for the Police Service for five years.

OTHER MINISTRIES We are pleased that the PLP Government has adopted and funded many programmes that were announced or initiated by the UBP Government. These include but are not limited to: The Senior Service Centre Child care support for low-income families The youth centre for Sandys The National Sports Centre The Drugs Court The Consumer Protection Office Enhancement of Bermuda's trademark and copyright laws Administrative support for the Registrar of Companies The purchase and preservation of open space We have many other practical ideas on the social and economic issues that affect Bermudians. Many of them were costed and then outlined in "Keys to Partnership''. We will raise these initiatives during specific discussion on Departments and Ministries in the Committee of Supply Debate.

CONCLUSION The PLP Government describes its Budget Statement as "people based and people focused'', with Government expenditures "focused on improving the quality of life for all Bermudians''. That is as it should be. Last year's United Bermuda Party Budget was called a "People's Budget'' by many in the community. We said, "Our people are the key asset for economic prosperity in the modern global economy, and, accordingly, most of the expenditure in this Budget is focused on people.'' Last year's United Bermuda Party Budget allocated 55.9 percent of total current account expenditure to spending on people. In comparison, the Budget just presented by the Progressive Labour Party allocates 55.8 percent to the same people-oriented departments and ministries.

Two Budgets, two political parties, clearly sharing a people-oriented focus.

So what is the difference? The United Bermuda Party has always focused on the economic fundamentals that make spending possible, rather than the spending itself. Without paying attention to the fundamentals, without positive economic indicators and economic growth, fewer funds are available to pay for education and training, health care, housing, public safety, transportation and community and cultural development. A list of economic statistics may not mean a great deal to the average man and woman when things are going well. But the average man and woman will get excited, very excited, should the economy go bad.

The PLP Government objective to improve Bermudians' quality of life is a goal the United Bermuda Party has always supported. The level of increase in PLP Government spending to achieve that goal is worrisome, however. The last thing Bermudians want or need is reduced purchasing power due to creeping inflation.

Empty pockets do not enhance quality of life.

There is growing concern in the community that the PLP Government is simply not moving fast enough. Key legislative initiatives affecting such things as financial security for seniors and Bermuda's competitive position in tourism, financial services and e-commerce lag way behind.

The United Bermuda Party suggests that the presentation of the PLP Budget Statement means that the honeymoon is coming to a close for the PLP Government. Once the Budget Appropriation Bill has passed, plans must be put into practice. Attention must be focused on substance rather than form. Put another way, the PLP Government must deliver the goods.

We watch and wait with this thought: There is a difference between "steady-as-she-goes'' and dead in the water. The PLP Government must trim its sails and move forward quickly before hesitation and inaction negatively impact Bermuda's competitive position.