Premier’s Paula Cox’s Budget was today criticised as a ‘business as usual’ election Budget by the Chamber of Commerce although it did praise moves to help the retail sector.Speaking on behalf of The Chamber, economist Peter Everson noted: “There were no unexpected surprises in this year’s Budget, and as many suspected, it was little more than a ‘business as usual’ election Budget.He said the absence of increases in general taxation had been well received by Chamber members and said the restaurant, hotel and retail members were also pleased to note that much-needed Payroll Tax relief had been extended.Similarly, said Mr Everson, many retailers will be cautiously optimistic about the decision to harmonise taxation at a rate of 25 percent. He said in the view of the Chamber’s Economics Advisory Committee, this decision simply corrects a long-standing anomaly and brings Bermuda into line with internationally accepted tax practices.He said many people would be encouraged by the Premier’s reference to promoting new ways of enhancing competitiveness to facilitate the establishment of new business by “cutting through red tape”. “It is hoped that this policy decision translates not only into a streamlining of the process for international business but also the development of hotel properties in Bermuda,” said Mr Everson.Mr Everson added: “The Chamber was particularly heartened by the announcement of the introduction of a public Bond Issue. This is something we have been very actively encouraging Government to consider since 2009. The Bond Issue will strengthen the investment sector and stimulate the Capital Markets, and provide much needed diversification in the investment industry.”He said the Chamber was disappointed that there were no specific plans or programmes to arrest the shrinking economy. “The economy will not stop shrinking by itself, Government assistance is required,” added Mr Everson.“The Government’s intention to take money from the Sinking Fund to pay interest, and borrow from the pension funds does nothing to change the reality that Government is spending far more than taxpayers can afford to pay.“Equally concerning is the decision to allow private industry to voluntarily suspend employee and employer contributions to the Occupational Pension Act. While there may be those in the short term who see this as an opportunity to improve cash flow, the long-term ramifications can only be damaging, and employees under the age of forty should be very concerned.”Mr Everson pointed out that: “As of March 1, 2011 the Government’s revenue deficit stood at $405 million, and included the $105 million shortfall in the Government Pension and Health plan. Even with borrowing from the sinking Fund and Pension plan, the Government will still be short $172 million in 2013, with no viable means of repayment. Added to which there will still be an additional $115 million short fall in the sinking Fund and Pension plan.”Philip Barnett, President, Island Restaurant Group, said: "The Restaurant Division of the Chamber is extremely grateful that the Premier and Minister of Finance the Honourable Paula Cox has extended the payroll tax relief for another year. This is going to be a huge help for most if not all restaurateurs to continue slogging away at trying to outlive the recession, and return to better days."Mr Everson said: “Government can only service its debt by reducing spending and increasing revenues and there are no signs of plans to do either in this budget.”Steven Thomson, President of Mailboxes Unlimited, said in reaction to the harmonisation of duty on personal imports to 25 percent: "When governments intervene in free enterprise by imposing taxes on business or the consumer, effectively what you are doing is eliminating competition.“We’re eliminating competition here because the long arm of the retailers through the Retail Division of the Chamber have been negotiating with government behind closed doors because their business is declining. This will have an inflationary effect on the people of Bermuda. The retail industry now, absent of competition, will have the carte blanche ability to increase their prices."The object is to force consumers into the local shops. Now that they don’t have competition, it will give them free reign to increase their prices. If local shops increase their prices and it’s now expensive to bring items in, this is what inflation is."After an initial review of today’s Budget Statement, ABIC supports the Government’s commitment to targeting a reduction in deficit and debt levels over the medium to long term. In addition, ABIC is pleased to see that payroll taxes and their corresponding thresholds will be maintained at last year’s levels with modest fee increases on other items limited to three percent.Acknowledging the difficulties in framing a budget in the current economic climate, Mr George Hutchings, Chairman of ABIC, did however caution that meaningful deficit and debt reductions can only be achieved with tangible improvements in new revenue sources as well as providing increased certainty to our existing business partners. Given Bermuda’s unique business model and highly mobile customer base, the cost of doing business plays an important role in the ability to generate additional revenue streams and to maintain existing revenue sources from the International Business sector.ABIC recognizes that in the current depressed economy there is a short term need for a prudent level of stimulus. In addition, we commend the Government on the formation of the Business Development unit of the Ministry of Development and Tourism, with the objective of retaining existing business, and attracting new business to the Island. We believe there is an urgent need to formulate and execute substantive strategies which maintain and grow international business, tourism and additional revenue sources. Mr Hutchings confirmed that, “ABIC is committed to a transparent dialogue with the Government to consult on key international business policies as well as sharing information and data that will help to further develop Bermuda as the welcoming domicile of choice for those companies that are here and those that may be created here in the future.”ABIC, the voice of international business, represents more than 130 international companies incorporated in Bermuda.Lawyer Richard Horseman: “The Budget speech is vague and lacking any real content with the Premier leaving it up to the Ministers to speak directly about their portfolios in the coming weeks.“ What we do see is that our debt is now due to rise significantly. The new budget seems to sanction continued spending when the Honourable Premier states that ‘the clear choice is between growth or austerity’.“Government chose growth because growth puts Bermuda on the right track. It is concerning to hear the Premier say that debt is a natural unavoidable part of economic life. It seems that there is no commitment on the part of the Government to reign in the overspending. Unfortunately, we cannot simply continue to borrow and spend our way out of this financial crisis. We need to find ways to bring back international business and reinvent our tourism product and we need to do it fast.”Reaction from our Readers’ Forum included this: “Much was speculated about this budget before today. Would this be an austerity budget, normally produced during times of hardship which most would agree we are in. Would this be a so-called “sweetheart” budget designed to garner votes for the upcoming election?“Sadly for us, and even more sadly for my children, it appears Madam Premier bowed to the pressure of producing a budget designed not for the betterment of Bermuda’s bottoming economy and our future but for the continuing legacy of ensuring their party remains the government.“It is a fact that the global economy situation has caused a likewise recession in Bermuda. We had no control over that. What we did have control over is our response to that event. And for another year running, our response has been lacklustre and will ensure that our Bermuda recession outlasts that of some, not all, other countries. The problem isn’t so much the size of the budget, over 1 billion again this year, it’s that we consistently are overspending this budget whilst receiving increasing smaller than projected revenues. Budgets should be an estimate, yes, but this seems more like a shot in the dark at times.“The budget isn’t all bad, what little there is of it. Some highlights for me include the removal of stamp duty in cases of mortgage refinancing, the adjustment of seniors tax exemption for cars, funding for local entertainment.“In fact, there really wasn’t much bad about it. Unfortunately in order to raise ourselves out of this hole we are in there needed to be some bad. I’m not a fan of the raising of the debt ceiling, however, in this we really have no choice because instead of cutting, it seems we’ve just continued with “business as usual” with the added component of trying desperately to justify why we can’t cut back. Apparently, we have to build each other up, together. So why do I feel let down?”