more social spending and cuts in Customs duties while criticising tax hikes imposed by Finance Minister the Hon. David Saul.

But Shadow Finance Minister Mr. Eugene Cox was short on details about how the Progressive Labour Party would pay for increased Airport costs and new spending programmes it proposed in its Budget Reply, which kicked off a marathon debate in the House of Assembly last night.

Instead, he called for a complete review of Government spending and Bermuda's taxation system.

At a news conference following Mr. Cox's hour-long Reply to the Budget, Opposition Leader Mr. Frederick Wade did outline one specific measure for raising Government revenues -- extending the new capital gains tax, which only covers property sales by non-Bermudians, to apply to Bermudians.

Mr. Wade said the ten percent tax on property sales by non-Bermudians sent "the wrong signal to international business'', and Dr. Saul should not have imposed it.

However, "once you take the calculated risk of a capital gains tax, you might as well go the whole way and put the capital gains tax on Bermudian real estate sales,'' he said. "It would have been better for us as a Country.'' Bermudians commonly bought and sold real estate for large profits, he said.

While the February 15 Budget had not been immensely unpopular, "it has been said that this Budget is serving one other purpose,'' Mr. Cox said. "To try to appease the people, because the Premier wants a `yes' vote on Independence.'' For his part, Premier the Hon. Sir John Swan said the Opposition Reply was "predictable''. The Progressive Labour Party wanted Government to "do more and tax less,'' he said.

And Government MPs insisted that the combined hospital levy and employment tax was not an income tax. "Income tax is all pervasive,'' said Management and Technology Minister the Hon. Grant Gibbons.

But in his speech, Mr. Cox said the 11.5 percent payroll tax outlined in the Budget, combined with the tax on profits from property sales by non-Bermudians, meant income tax had arrived in Bermuda. The new taxes "set the stage we believe for the gradual introduction of a whole host of forms of income tax.'' Mr. Wade complained there was a double standard in the Country's reaction to the United Bermuda Party on the one hand and the PLP on the other.

"We know that if the PLP had had the temerity to introduce an 11.5 percent payroll tax,'' there would be editorials, newspaper headlines, calls to radio phone-in shows, and "the Country would have been in a crisis'', Mr. Wade said. But if "Government does it, it's all right.'' The Opposition Leader also accused Dr. Saul of perpetrating "a fraud on this Country'' when he lifted the seven percent ceiling on interest rates in last year's Budget. At the time, Bermudians were told cheaper borrowing would result, he said.

"We told them last year it would be wrong to raise the interest rate ceilings and not protect Bermudians from higher rates,'' Mr. Wade said. Now, mortgage rates are pushing above nine percent, Bermudians are at the mercy of the world, and a promised insurance scheme to protect against higher rates has never appeared.

And Government has gone silent on the issue, he said.

Noting that the return of the US Bases and accompanying major Airport costs were the driving forces behind the Budget, Mr. Cox said the Opposition had pushed for changes in the terms of the Bases agreements for years, and warned Government in 1992 to start preparing for the closures.

At the time, Government said it had received no word of the American Base closures and it was "not feasible to make detailed plans'', he said.

"The UBP Government delayed and lost as much as two years of preparation time,'' Mr. Cox said. A contingency plan should have been prepared that placed the rights of Bermudians first. Instead, the UBP was awarding foreign contracts and hiring "many more foreign contract workers than would otherwise have been necessary''.

While calling for more spending on Police, international business promotion, the Commission for Unity and Racial Equality, drug treatment, Tourism, job training, the National Stadium and sports development, Mr. Cox called for tax rebates for companies that hired large numbers of Bermudians, "exemptions, relief, and deductions to the commercial sector'' to help lower prices, and said the $5 hike in the departure tax was "untimely''.

He said it was not true that the "little man'' had been spared in Dr. Saul's Budget, noting the removal of the five percent discount for early payment of land tax, unspecified licence fee increases, and increased costs for estate planning.