paid by vouchers.

Management and Technology Minister the Hon. Grant Gibbons made the announcement on Wednesday as the House of Assembly debated the Budget.

Defending the $5 hike in the departure tax to $20, he said there were fears that fears what it would damage visitors' perceptions of Bermuda.

But he said legislation was being brought in to ensure the tax was paid through a voucher system. This would remove the inconvenience of paying the tax at the point of departure from the Airport.

On international business, Dr. Gibbons highlighted the ways Bermudians enjoyed an employment spin-off from this sector of the economy.

Up to 5,000 "secondary jobs'' related to international business were filled by Bermudians.

Dr. Gibbons accepted the Opposition's statement that employment at large retailing outlets had been reduced.

This had been part of a restructuring of the retail industry. But smaller businesses had expanded in "leaps and bounds''.

"This is a very positive trend.'' Dr. Gibbons expressed astonishment at Opposition protests that Government revenues were not keeping pace with gross domestic product.

Government's ability to keep the lid on such revenues was "remarkable'', and something to welcome.

Turning briefly to the Base issue, Dr. Gibbons said the strategy had been to put contracts out to tender.

This would protect taxpayers as much as possible.

"We are trying to keep control of costs, and will continue to do so,'' he said.

Dr. Gibbons went on to swipe at the Opposition for suggesting telecommunications was an easy option for boosting the economy.

This was not so. There was fierce competition in telecommunications, and such a market could not be created like turning on a light switch.

Instead, Government had adopted the approach of laying a solid foundation for telecommunications.

Shadow Home Affairs Minister Mr. Alex Scott applauded Mr. Cox for presenting a Budget reply which spoke to ordinary Bermudians.

This contrasted with Dr. Saul's Budget which failed to address harsh realities faced by many people.

He accused the UBP Government of lack of leadership and vision.

"These are not the group of leaders who can take the Country to Independence.'' This was exemplified, he said, by the decision to hire two foreigners to head up the Bermuda Police.

Mr. Scott said Home Affairs Minister the Hon. Irving Pearman had an admirable track record in piloting his own career.

But his record was no better than that of two people qualified to become the next Commissioner and Deputy Commissioner of Police -- Mr. Wayne Perinchief and Mr. Harold Moniz.

Mr. Scott questioned the suitability of Englishman Mr. Michael Mylod to become Deputy Commissioner.

The fact Mr. Mylod spent the early part of his career in Northern Rhodesia -- now Zambia -- sounded a warning bell.

There was no reason why Mr. Mylod could not have traveled to southern Rhodesia, which became Zimbabwe, said Mr. Scott.

"Any Englishman in the Rhodesias was not a liberal person, not a progressive person. He only had to be there two or three years, or two or three weeks, to make life uncomfortable for any African.'' Mr. Scott questioned why Mr. Mylod had been training the "natives'' in Africa when he was still a rookie Policeman himself.

"We should canvass from our friends in Zambia for a line on how well Mylod served that country at that time.'' Mr. Scott then turned to the handover of the military Bases, saying the land would provide a great opportunity to boost the lot of Bermudians.

"Bermudians don't want to see international companies being given contracts to employ foreign workers.'' The transfer of the Bases -- ten percent of Bermuda's current land mass -- represented an economic lifeline.

"Bermudians are looking at the Bases as the new frontier, the Promised Land.

They want Parliamentarians to lead.'' On international business, Mr. Scott praised the leaders in this field for seeking audiences with the Opposition more and more frequently. This was the way for forging a meaningful partnership.

Mr. David Dodwell (UBP) said Bermuda had to recognise change, and was doing so.

"We are in the process of restructuring,'' he said.

But Government could not do everything alone. Others were involved in the process -- employers and employees -- and there was a growing acceptance of this.

Mr. Dodwell agreed the return of the Base lands threw up a great opportunity for the future.

But he was concerned when too much focus was placed on using the lands for recreation.

Money was needed to provide such recreation, and where was it going to come from? Mr. Dodwell hoped for local and foreign investment in the lands to provide another leg to the economy.

"Economic investment is equally important as social investment.'' Touching on the departure tax, Mr. Dodwell said the $5 increase was modest, and a logical way of raising revenue. The voucher system would remove inconvenience.

Mr. Dodwell also defended the payroll tax, rubbishing PLP claims it was tantamount to income tax.

There had always been taxes on income -- such as hospital levy -- but these did not represent income tax, he said.

On Parliamentary salaries, Mr. Dodwell said it was important for MPs to demonstrate moderation.

"I think Dr. Saul has gone the extra mile to do this,'' he said.

Mr. Ottiwell Simmons (PLP) immediately complimented Mr. Cox on his Budget reply, saying it contained some innovative ideas.

Mr. Simmons described Dr. Saul's Budget as one typical of the UBP. It placed a burden on those with the least ability to pay.

The payroll tax was an example of this.

"Government members are saying we have tax of income, but do not have income tax.

"That is the quote of the century. I have never heard such double talk.'' Mr. Simmons said Bermuda was heading in the direction of a tax proportional to salaries and wages.

"To me it is unfair taxing. Government ought to be taxing people fairly and equitably.'' While Government recognised the needs of hotels and international businesses it appeared to be forgetting people.

On the Occupancy Tax, Mr. Simmons said there were major flaws in Dr. Saul's calculations.

The intent of the tax was to ensure Government acquired greater revenue from tourists.

A person would be taxed for his room -- as well as breakfast and dinner, if he ate at his hotel.

But what would happen if a guest said he wanted to pay for his room only? Mr. Simmons said guests could eat outside their hotel, such as in restaurants.

Some hotels recommended restaurants to guests as part of an arrangement between the two.

In addition, hotels, such as Belmont Manor, also provided restaurants on concession. What would happen in these restaurants? Would guests be taxed? Mr. Simmons went on to attack the proposed $5 addition to the departure tax, saying it represented a 33 percent increase.

"Make no mistake that airport tax is a lot of money.'' Mr. Simmons said he wished a way could be found to eliminate the tax. He demanded to know what people got in return for paying it.

Mr. Simmons then switched to tax relief for hotel refurbishment.

This was all well and good, but what did hotels do in return and why were no Bermudians running these properties, he asked.

Mr. Simmons said a target should be set for employing Bermudians.

And he suggested three local general managers should be in place over the next three years.

On the Bases, Mr. Simmons asked what was planned for the lands when they returned to Bermuda.

He said he had visited Daniel's Head and was disturbed by the state of the properties there.

The buildings were full of cobwebs and had deteriorated through lack of use.

Mr. Simmons had his own idea for the lands.

They should be used, he said, for manufacturing and exporting something like exclusive furniture.

Education Minister the Hon. Clarence Terceira said all the employment indicators were promising, and showed Bermuda was coming out of recession.

He then continued by defending Government's education record against Opposition attacks.

Teachers and principals were excellent, despite constant sniping from the PLP, he said.

His remark provoked a storm of protest from the Opposition benches.

Dr. Terceira continued by saying Government was ensuring teaching staff received training to prepare them for the school restructuring.

"We will be sending 60 teachers overseas for special training for Middle Schools.'' Dr. Terceira also said Government was catering to the needs of children with special needs.

"We have a three-year plan to increase teaching assistance as we continue mainstreaming students with special needs.'' Dr. Terceira went on to trumpet Bermuda's teacher/student ratios. These compared favourable with other countries.

The ratios were 1-3, special schools; 1-10, pre-schools; 1-14, primary schools; and 1-10, secondary schools.

"These ratios are very, very low.'' Dr. Terceira said it was not true for the Opposition to claim the Ministry staff had increased, stressing there had been no growth.

And he also pointed out Government had undertaken to set up school boards.

Shadow Environment Minister the Rev. Trevor Woolridge immediately blasted Dr.

Terceira for misleading the Country by stating the Opposition continually ran down teachers and principals.

This was untrue, and needed to be knocked on the head since Dr. Terceira had not apologised for the remark.

Mr. Woolridge also chastised Dr. Terceira for not mentioning the environment when he was responsible for speaking on the subject in the House.

He then lined up the Finance Minister in his sights.

It was absurd for Dr. Saul to speak in 1994 of the need to prepare Bermuda for the closure of the bases.

The Opposition had been urging Government to prepare contingency plans as far back as 1989 and 1990.

"Government believed Uncle Sam would look after us forever.'' Now Ministers were running around like "chickens without their heads'' trying to deal with the problem.

Budgets ought to be forward-thinking and prepare Bermuda for the "worst case scenarios'', he said.

It was also essential the lands be transferred to Bermuda in an environmentally acceptable condition.

Mr. Woolridge then momentarily focused on Catchment Hill, asking what were Government's intentions for the land. Last year Government had promised to report on the controversy.

Switching tack again, Mr. Woolridge called for more to be done in promoting Bermudians at work, particularly black ones.

He then went on to accuse the Press of being "too easily persuaded'' by the Budget is `the calm before the storm' Budget would not hit the common man.

"How the Press could have digested it so fast and come to the same conclusion as the Finance Minister astounds me,'' he said.

"After close scrutiny, the Minister of Finance has not let the little man escape because the professionals will pass the costs on to the consumer because there has been no break in the tax structure.'' Government backbencher the Hon. Ann Cartwright DeCouto (UBP) took several swings at the Budget.

"It isn't as bad as it could be -- or should be -- given what is on our plate.'' she said."But I have a healthy suspicion that this Budget is the calm before the storm. Next year it will be socked to us.'' She encouraged Dr. Saul to rethink and report back to the House on several matters including the six percent hotel occupancy tax; the capital gains tax on non-Bermudian home owners; the $400 corporate service fee on those service providers dealing with non-resident international companies that set up in Bermuda; stamp duties and a truth in lending act that would address the exorbitant interest charged on local credit cards.

"Think twice, look twice, sleep on it and come back and give us some good news,'' she told her former Cabinet colleague.

Shadow Education Minister Ms Jennifer Smith said Dr. Terceira's refusal to share the design brief for the senior school with the House and the public went a long way to convincing Bermudians that all was not quite right with the state of education in Bermuda.

She said Government had not done as good a job at promoting the arts as it did sport in Bermuda.

The Arts Council only received $175,000, but the Sports Development Assistance Programme received $643,000 and that was only one of the awards made to sport.

If Government really understood the value of the arts on people's ability to learn in addition to its calming effects, more attention would be paid to it.

She also said senior citizens on fixed incomes were concerned about the increases in car licence fees which many use because they have difficulty catching the bus.

Mr. David Dyer (UBP) said it was unfair for Cabinet members with portfolios to receive the same increase in salary as those without a portfolio when they often did more work.

He said those members who did not have to put in as much time should not have the same level of increase.

Mr. Nelson Bascome (PLP) said Bermudians who bought a house at a favourable rate from the Housing Corporation should not be allowed to sell it for a profit because that favourable original price was made possible due to taxpayers' money.

Transport Minister the Hon. Maxwell Burgess (UBP) said the PLP's Budget response was dismal. The party had the opportunity to say to Bermuda what it believed should be the social contract without having to worry about costs.

Mr. Burgess said Bermuda was part of an increasingly competitive world, and could not live in a "fish-bowl''.

"We are going to have to retrain, retool and re-equip ourselves if we are going to survive...the reality is the tourist industry is if are more competitive.'' Shadow Human Affairs Minister Ms Renee Webb began by taking a potshot at Mr.

Burgess.

"It is always amazing when Mr. Burgess gets up to speak and rewrites our speeches and responses,'' she said.

She added she was sure Mr. Burgess would have a chance to respond to the Progressive Labour Party's Budget once it was in power after the next election.

Ms Webb continued by saying Government's stance on Bermudianisation was contradictory.

On the one hand it expressed commitment to it, but on the other it went overseas to find officers to fill the two top Police jobs.

Government stated the two British officers were coming here as part of a plan, she said.

"What is this mystery plan?...Let us know what the master plan is.'' Ms Webb attacked Labour Minister the Hon. Irving Pearman over the hirings.

She said he has lost credibility in the eyes of the public.

Ms Webb was less harsh on Government over its Budget.

"It is not a bad Budget,'' she said, accepting Government had attempted taxing those most able to pay.

But Ms Webb wondered at the names given to taxes in Bermuda.

People paid tax on income, yet it was not called income tax; and people paid land tax, although there was no tax on land.

"We create names instead of dealing with facts. Government should say exactly what people are paying.'' Ms Webb said it was time for honesty.

The United Bermuda Party had always tried to scare voters by claiming the PLP would bring in income tax, and lead Bermuda to Independence.

And yet Government was taxing income, and had launched an Independence initiative, even though it was not in its election Blueprint.

Ms Webb noted Government, through the Budget, was increasing the number of Police cadets.

This had been trumpeted by one Government member as a move against crime.

But how could this be so when racism still flourished in Bermuda, people were succumbing to drugs, and black males were being ostracised? In fact, statistics showed black males were the only group of people to suffer from increasing unemployment.

"Black males always seem to bear the brunt,'' said Ms Webb.

Dr. Saul's Budget did nothing to address these problems, all which led to violence.

Ms Webb turned to the relaxation of financial controls, and said the PLP had been apprehensive about this, believing it would not benefit Mr. and Mrs.

Bermuda.

Government had boasted the move would lead to cheaper borrowing and reduced mortgages.

What had happened? And who had benefited? "Lo and behold, the banks have benefited,'' said Ms Webb, while "the little man'' was hit by increasing mortgage rates.

Shadow Community Affairs Minister Mr. Leon (Jimmy) Williams also spoke of widespread concern over the hiring of two English Policemen.

"Bermudians are really fired up.'' Mr. Williams said Bermudians were becoming increasingly upset at being shut out of the workplace.

Why were there no local people running the hotels here? "We are turning Bermudians into murderers,'' he said, adding: "Make Bermudians happy and you don't have a problem.'' Mr. Williams also touched on the case of the seven Under-23 soccer players arrested in Miami, and charged with possessing marijuana.

He said the young men had been through a traumatic time, and he told Sport Minister the Hon. Pamela Gordon they needed "counselling''.

Finance Minister the Hon. David Saul cited to MPs the old adage that there were two constants in life -- debts and taxes.

"All of us have to pay taxes,'' he said, while stressing Government accepted its responsibility for helping the "ordinary man''.

Dr. Saul went on to try to shoot down PLP criticisms of the Budget.

He said the Opposition's Budget reply contained inaccuracies, although this was understandable since the party only had a week to prepare it.

Firstly, he said it was wrong to describe the payroll tax as income tax.

It was merely an amalgam of the hospital levy and employment tax, which would ease administration for employers.

Dr. Saul strongly defended the removal of the ceiling on interest rates, saying it was an acceptance of reality and allowed more people to get Bermuda dollars loans.

On foreign exchange controls, Dr. Saul said there were no moves yet to relax the $25,000 limit on capital outflow from Bermuda.

However, the Bermuda Monetary Authority had made administrative changes to help people.

Dr. Saul tackled a concern raised by Government backbencher the Hon. Ann Cartwright DeCouto.

He said the Budget had not touched on Independence because it would have been presumptuous to have anticipated any Constitutional change before a referendum.

Dr. Saul went on to stress he had not raised the price of gas, fuel oil, alcohol and Customs tariff.

This would have been the easy course to take to raise funds, but it would have hit the "little man''.

Dr. Saul also rejected Opposition claims the Budget should have considered the ultimate costs of the handover of Base lands.

How could this be done when nobody knew how the lands would be used? Dr. Saul then took PLP leader Mr. Frederick Wade to task for incorrectly station voluntary conveyances would now be closed.

"He is wrong.'' Elsewhere, Dr. Saul said it was ridiculous for the PLP to maintain Government had not helped the construction industry during the recession, and he defended the passenger tax increase, saying surveys showed most people objected to the inconvenience of it. This was now being tackled.