Part II Mr. Speaker, a PLP Government will take a number of vital steps to arrest the malaise in our most important industry, including: A truly comprehensive basket of tax incentives and concessions for the ailing hotel industry, including adjustments to the Hotel Occupancy Tax geared to the seasonal nature of our visitor industry; incentives to encourage the restitution and expansion of hotel night-club and entertainment facilities, and the employment of Bermudian entertainers.

Adjustments or removal of duty from a truly wide range of visitor-oriented merchandise to establish Bermuda as a major duty-free shopping venue, and restore the lustre of our reputation as a value-oriented and quality shopping destination.

Allocate greater resources to the Department of Tourism's overseas on-the ground sales force to increase Bermuda's sales presence in the marketplace.

Seek a sixth cruise ship for Bermuda which will call on weekends only.

Mr. Speaker, the Shadow Minister of Tourism will expand on these and other points during the debate on the Tourism Estimates of Expenditure, but I wish to underline one point which the PLP considers fundamental to the restoration of our tourism industry.

No long-term solution will be effected without the broad and in-depth co-operation and indeed, enthusiasm of Bermudians themselves, particularly those directly employed in the industry.

Mr. Speaker, we must dispel feelings of alienation and ensure that Bermudians look at the tourism industry, including the hotel sector, as an area of opportunity and advancement to all levels.

TAX REVIEW The role of government is to practice equity -- equal opportunity for all Bermudians. The real benefits come from equity.

Mr. Speaker, the 1997/98 Budget has been looked upon with favour by some.

However, the Government of the day will face significant challenges as they seek to fund future expenditures. The latest available audited financial statements of the consolidated fund for the year-ended 31 March, 1994 showed a deficit in the consolidated fund of $88.6 million and long-term debt in excess of $76.8 million. The notes to the financial statements reflected unfunded pension liabilities of $164.6 million and Government guarantees totalling $50.4 million. Overall our national debt stood at approximately $380 million as at 31 March, 1994. There is obviously a demonstrable need for the comprehensive tax review that the Progressive Labour Party has consistently called for over the years.

Mr. Speaker, this has been stated in past PLP Platforms and successive Throne Speech Replies and Budget Statement Replies. It is therefore heartening to see that the business community and the UBP Government has supported our call for a thorough and comprehensive tax review. We understand that the Chamber of Commerce is already conducting a study on the feasibility of a point of sale tax as an alternative to customs duty tariffs on retail goods.

Mr. Speaker, the real estate market is one of the areas where future development plans may be severely hampered by the inadequacies of our current tax system. Recently one of the financial service companies complained that government taxes foreign buyers of local property too heavily. This company's chief executive stated that he doubted the viability of plans to develop the base lands if this tax in particular is not revised. The company President and CEO added that the high licence fees paid by non-Bermudian purchasers of local real estate, which increased a year ago from 20 to 22 percent, sends a negative message to potential residential property purchasers from overseas.

He stated: "We believe it is in the community's and government's interest to reduce this tax to a more acceptable level. We might add that unless there is some change in this tax structure, we have serious doubts of the viability of the development plans for the bases.'' THE BASE-LANDS "People who make things happen.'' "If you really want something, you can figure out how to make it happen.'' It starts with a dream.

Mr. Speaker, it has been two years since the base-land properties were vacated. The significance of this property to the future of Bermuda is indisputable. Mr. Speaker, we would suggest that this House be kept fully apprised of all developments with regards to the future of the base-lands and no opportunity must be missed to inform Bermudians about the progress of the negotiations for the utilisation of these properties. We must ensure especially Mr. Speaker, that there is no `closed-shop' approach in awarding contracts.

We should not only like to encourage economic development but we would also like to see the UBP Government use innovative methods to promote change.

Governments create or change markets all the time by stimulating demand, but they must take the initiative. Changing the marketplace means more than restructuring the economy. It means also strengthening the community.

Plans not promises.

THE GLOBAL ECONOMY We must be mindful of events in the United States.

Mr. Speaker, we need to be aware of the global economy because of the economic fallout to Bermuda. These factors include the following: The uncertain US stock market, which is susceptible to Federal Reserve tampering of interest rates and increased inflation.

The continued efforts by major corporations to bolster their bottom lines by laying off thousands of employees.

The increased wealth disparity as the interest burden continues to be borne by the lower and middle income classes in the US.

The uncertainty as to whether or not the US has actually come out of what had been previously described as "the Quiet depression of the 90s''.

In one way or another, we are all part of the global economy. When America sneezes, Europe gets a cold and so do we. The international linkages and advances in the telecommunications industry has caused the world to shrink so that there are virtually no national borders. When we drink our imported coffee, when we use a foreign-made VCR, we are participating in the growing world of international trade and finance.

COMPETITION "Systematic innovation requires a willingness to look on change as an opportunity.'' Peter F. Drucker Mr. Speaker, there are ways to use choice and competition to increase equity in the economy. We believe passionately that increased equity is not only right and just, but is critical to our success as a country. We cannot compete effectively if we waste a single component of our human resources.

Mr. Speaker, it is very important for Bermuda retailers to become more competitive and to appeal not only to island visitors but to the well travelled local shopper. Providing quality service at a competitive price is a commitment to be embraced by all sectors of our business community. Bermuda has enhanced its reputation as a premier financial centre, due in large part to the singular efforts of the local business community. Fortunately, they were able to expand company resources where they felt there were shortfalls in Government initiatives.

The Progressive Labour Party has spearheaded the formation of a focus group to discuss issues of importance to the local business sector and to obtain information from the community on matters of economic concern to us all.

Mr. Speaker, Bermuda is at the crossroads -- the decisions made today will be of far-reaching significance to us in the future. Accordingly, we need to be a part of framing the solutions together.

Mr. Speaker, we in the Progressive Labour Party recognise that Government must be committed to strengthening the economic base of small businesses. Small businesses are crucial to the competitiveness of Bermuda's economy, and it is vital that we create an environment where small businesses can develop with some protection from the many barriers that exist. Fledgling entrepreneurs and small businessmen that look to government for advice and in some instances relief, must be given the same audience as those larger companies with far greater financial resources.

Mr. Speaker, we applaud the efforts of the Bermuda Business Organisation which has published the Bermuda Small Business Directory 1996. This will undoubtedly provide small business with additional exposure and greater networking opportunities.

EDUCATION We believe education should help children find their way.

"Excellence in education need not mean elitism, and equity need not mean mediocrity.'' Mary Jean LeTendre Mr. Speaker, we believe that reform is a continuous process and we call on Government to study the needs of students for supervision and/or programmes prior to the mandated start of the school day. We also call on Government to consider the number of subjects now included in a school day and institute a study into the benefits of year-round schooling and other alternatives to the current three term school year.

Mr. Speaker, the Progressive Labour Party warned on the floor of this House that Government should not undertake mainstreaming without first putting the necessary support services in place. Now, we are told in this Budget Statement that $1.4 million for mainstreaming was an unbudgeted item -- confirmation of the fact that Government precipitously introduced a programme it had not planned and prepared for.

Mr. Speaker, we welcome the "$500,000 committed to the training of teachers to support restructuring'', but we have to ask what happened to the funds previously earmarked for such training? Mr. Speaker, it is precisely because Education and training are a lifelong process that we want to see increased use of public school buildings and community schools, to provide services throughout the island to those interested in continuous learning.

Mr. Speaker, the Shadow Ministry of Education will comment further during this debate on Government's handling of Education.

REINVENTING GOVERNMENT Anticipatory Government equals Forward Planning.

It used to be that governments focused more on prevention. However, as governments gained more capacity to deliver services the attention shifted.

Instead of dealing with problems when they happen, it is preferable to be pro-active to avert problems. Mr. Speaker, had the UBP Government been more pro-active, tourism, in our view, would not now be in a crisis and Government on sensitive issues such as the dumping of asbestos would not be in such a quandary.

A PLP government would look to reduce government expenditure by: (i) making better use of the recommendations made by the Auditor with regard to increasing the level of internal controls over cash outlays by Departments, and; (ii) working very closely with the Auditor to ensure that his Department is adequately staffed and receiving the necessary support from government departments. Mr. Speaker, we should note that the additional funding for the secondment of Auditors has been allocated to deal with back-logs. However the problems which the Auditor faces on an on-going basis cannot be alleviated by a `band-aid' approach which is aimed at dealing with short-term problems. This appears to always be the UBP Government's philosophy for handling long-term problems. Must we remind the Government, once again, that the last audited financial statements presented by the Auditor were for the year-ended 31 March, 1993.

LABOUR AND HOME AFFAIRS Bermudianisation Mr. Speaker, an economy must pay heed to the forces of supply and demand. It is incumbent on Government to create economic opportunity for all of its citizens who seek to be gainfully employed and live a productive life.

Mr. Speaker, the decline in the hospitality industry continues to impact on the demand for Bermudian labour. The Progressive Labour Party reported in the 1994, 1995 and 1996 Budget debates that between 1982-1991 Bermudians lost `job share' - in the economy! Regrettably, the trend is continuing. This UBP Budget Statement, like previous statements, does not acknowledge this loss of job share by Bermudians, nor does it recommend any fiscal initiatives to address this unacceptable condition.

Mr. Speaker, it is regrettable that even as millions of dollars are being made available to the Bermuda Police Service, the Government have elected to discontinue the Police Cadet Training programme claiming that it was too expensive. This Mr. Speaker, underscores the Government's commitment to training and creation of job opportunities.

The PLP maintain that in order to ensure that all Bermudians share in the economy, organised labour and management need to approach these changing times with different and innovative solutions. To this end, management must not try to recover at the expense of labour -- but recover -- with labour! TAXES TAX