Premier Paula Cox's payroll tax reversal was an admission she got it wrong with last year's increase, Bermuda Democratic Alliance finance spokesman Michael Fahy said yesterday.Mr Fahy accused the Finance Minister of a U-turn by dropping payroll from 16 to 14 percent, a year after she raised it from 14 to 16 percent.He questioned why Ms Cox had only now revealed last year's rise was always meant to be temporary, when such advice could have appeased her critics over the past 12 months.And he said h had never before heard her state the increase was designed to impress rating agencies of Bermuda's ability to collect revenue; a year ago she stressed how Government needed the money to tackle key issues such as education and security."I'm suspicious of her response," Mr Fahy told The Royal Gazette.“It seems to me that’s a U-turn on their approach a year ago. It’s not that often you see the tax go up and a year later it goes back down again.“It’s an absolute admission that she got it wrong. It certainly didn’t help the economy. It was the wrong thing when she did it, and we still say it was the wrong thing to do.”Throughout the past year, Ms Cox has faced public criticism from the business community about the two percentage points increase, which they claimed pushed employment costs so high it led to job losses.The Premier has consistently defended the move and said it has encouraged local businesses to be more innovative.In last year’s Budget debate, she said tax was being increased “so we can make sure Bermuda is a safe place to live and anchor your business”.It’s thought last Friday’s Budget was the first time she’s publicly stated the move was not meant to be permanent, although she told a press conference she had mentioned it in discussions with shareholders.Giving details on the reason for the payroll tax increase, she said on Friday: “Without it we would have risked a ratings downgrade which would have driven up the cost of borrowing in Bermuda and potentially damaged our reputation as an international business centre.“However, it was never the intent for such increases to be a permanent feature of the tax structure.”Mr Fahy replied: “I was unaware that this was a temporary measure in terms of raising payroll tax. What I’m surprised about was her announcement that the reason it was raised in the first place is the rating agencies were looking for some sort of revenue system.“To me that seems to demonstrate that she was doing it supposedly to keep outside rating agencies happy, but not many people in business put that much faith in agency ratings anyway.“You don’t raise taxes when people are looking to save jobs, it certainly wasn’t going to help small businesses, it wasn’t helping anybody.“I’m glad she turned it around, but it shouldn’t have happened in the first place.”Ms Cox says Friday’s move will stimulate the economy, retaining and creating jobs in hospitality, construction, retail, international business and manufacturing.Mr Fahy said: “It’s a start, but when it’s a recession people are going to hang on to their money. It certainly does represent a nice little piece for employers to put in their pockets. Is it going to stimulate the economy? We are going to have to hope that it does.“The revenue projections that she made are fuzzy at best, given the revenue that she collected this year. The fact that she’s reducing pay roll tax will give less revenue.“If you are going to have a cut in tax, you are going to need some corresponding cuts in expenditure. That’s not happened to the amounts it should have.”Mr Fahy also asked why Ms Cox is only now adopting a multi-year approach to the Budget instead of applying the “one-year horizon” she says she’s used in the past.He said the BDA had suggested a five-year plan last summer, only for people to respond: “That’s a silly idea, I’m sure they’re doing it already.”He said: “It’s not enough to wash your hands and say while I was Finance Minister I wasn’t the boss, I absolve myself of what happened.“This is not a new administration, not a new Government. Paula Cox was the Minister over the time period when the economy has tanked.“She’s got to take some responsibility for what’s happened in that time whether she was Premier or not.”