Premier and Finance Minister Paula Cox presented a $1.08 billion Budget yesterday which she said rejects harsh austerity measures in favour of economic growth.The package involves a year-long suspension of Government payments into the civil servants’ pension fund, harmonising duty rates at 25 percent for personal imports, and extending tax concessions for certain businesses.Government fees are to be increased by three percent for an expected $4 million to $5 million in additional revenue.As expected “sin taxes” on cigarettes will be increased.And, for some senior citizens, a land tax exemption will end as Government seeks to claw back an estimated $4 million.But residents will be spared any increases in bus and ferry fares.The 2012/13 Budget anticipates roughly the same level of total spend as for the current fiscal year which ends March 31, and is expected to come in at a $172 million deficit.And the statutory debt ceiling, which was raised to $1.25 billion in April 2010, will be increased again this time by another $200 million, to $1.45 billion.The Premier defended her Government’s use of debt in her Budget Statement which was read to the House of Assembly yesterday morning, saying that $98 million in payroll tax relief and other concessions to the hospitality and retail sectors had saved thousands of jobs.“In short, $98 million was added to our debt,” she said.“Government considers that it did the right thing. Preserving jobs and helping to stabilise vital sectors of the economy was the right thing to do. Some 8,500 jobs were at risk if Government had not responded with assistance.”The Island’s debt now stands at $1.2 billion, which at 24 percent of GDP, is below the 30 percent affordability rule, the Premier noted.The 2012/13 Budget foresees an overall deficit of $172 million to be financed in part by the issue of a local bond.That, Ms Cox said, will be a “win-win” for Bermuda because it will stimulate local economic activity.The Budget extends the payroll tax concessions for hospitality and retail, at a cost of $21 million, and aims to further stimulate the economy by allowing the private sector to freeze pension schemes for a year.“If the suspension of contributions is taken up across the private sector, it will provide both relief and stimulus to families and businesses,” Premier Cox said.“The stimulus to the economy will be generated if some of the saving is converted to consumer spending and business infrastructure and improvements.”Another stimulus measure is to eliminate a ten percent stamp duty charge on mortgage transfers. The intention is to promote competition between lenders and reducing costs to customers when transferring a mortgage from one bank to another.Government’s contribution to the civil servants’ pension fund will be frozen for a year, for an additional $31 million in “fiscal space” but the money will be returned to the fund in the future, Premier Cox said. In the meantime, an actuarial review of the fund will be undertaken to determine how to make it sustainable.And the Public Service Superannuation Act 1981 will be amended to allow its employees to access their pension money when facing financial hardships.Sandys 360 Sports, Aquatic and Enrichment Centre is set to receive a $2 million capital grant “to assist in defraying the cost of works undertaken”.Senior citizens have, since 2005, enjoyed a land tax exemption for their primary residence, as well as exemption from having to pay vehicle licence fees.But Government plans to claw back some $4 million in foregone revenue by charging land tax on properties with an annual rental value above $50,000.Another $3 million will be recovered by ending the vehicle licence exemption for vehicles from Class E to Class H the larger vehicle classes.Government has been concerned that the vehicle licence exemption scheme was subject to abuse as it led to an 358 percent increase in class H registrations to seniors.The revenue estimate for 2012/13 is $909.6 million, three percent lower than the original estimate for the previous year.The Premier noted that Government is developing new revenue streams “including the possibility of a public-private partnership to generate additional $18 million per year revenue from Bermuda’s commercial airspace”.And Government will be assessing the feasibility of commercialising its exclusive economic zone by establishing a licensing regime for international fishing vessels to fish in the Island’s waters.