Sen. Terry Lister , who led for the Opposition in the debate on the $358 million budget, declared its tax increases imposed an unnecessary and unfair burden on the "man in the street.'' Government Senators defended the document as a realistic plan that would protect the Island's future.

Senator the Hon. Grant Gibbons led for the Government, saying the budget was put together against a backdrop of growing confidence in the economy. Two main budget objectives, he said, were to keep inflation low and to put Bermudians back to work.

Mr.

Gibbons said Government had also planned its budget with the understanding that recovery from the recession was being achieved with fewer workers, so it was important to keep the cost of Government for businesses as low as possible.

Mr. Gibbons said that the budget was not a one-off event since it meshed with those from previous years and those to come.

"People may see the budget in terms of how it affects them personally,'' he said. "But it's important to see it in terms of Government's forward planning.

"Since 1991, Government has made efforts to tighten spending and it's fair to say Government and Bermuda were responding to the challenges of a changing world.'' Mr. Gibbons said that while the repeal of the 10 percent foreign currency purchase tax would cost Government revenue it was important to view it as an "investment for the future''.

The repeal keeps Bermuda in line with the deregulations of capital flows in other countries.

He said he was disappointed by the Opposition's response to the budget especially since they saw themselves as the Government in waiting.

The Minister said the PLP had not put forward any recommendations on how it would raise revenues. "Where's the beef?'' he asked.

Sen. Gibbons, who is Minister of Management and Technology with responsibility for the military bases takeover, said $2 million had been set aside to initiate a smooth transition of base lands from the US Navy to Bermuda.

Other new spending initiatives included $600,000 to operate the new prison, $1 million for resurfacing roads, $3 million to the Hospitals Board and $4.3 million to operate the incinerator.

In addition, the Minister said $5 million was committed to Bermuda College to complete its final building phase at Stonington campus.

Changes in tariff rates would reduce Government's revenue, Sen. Gibbons said, making it simpler and easier for business to invest for the future.

Household goods would become cheaper.

Mr. Gibbons said tax increases did not amount to much. Land tax hikes for the lowest band, for example, would cost $4.50 extra each year, and for the highest band another $133 or about $12 a month.

Sen. Lister said that the budget did not mark a new beginning. Rather, it was the same old methods of dividing and separating the country through increases levelled against one sector and not another.

Government's budget policies, he said, turned "people against each other''.

Sen. Lister noted the inflation rate was about 2.5 percent, the lowest rate since 1977. Low inflation, he said, was primarily due to worker cooperation and acceptance of lower pay increases.

Though happy with 1993's 12 percent jump in tourist arrivals and the international sector's job creation record, Sen. Lister expressed concern that Government did not have a plan to put people to work.

He was sceptical of Government's plan for a job training programme with its $100,000 budget, of which $60,000 was salary for its officer. This did not amount to a real commitment to job training.

Sen. Lister referred to his party's finance critic, Mr. Eugene Cox MP, to brand the budget as "the poor man's burden''.

The one percent hike in the hospital levy, "sin tax'' rises and higher bus and ferry fares had hit the man in the street in the pocketbook, he said.

He chided Government for imposing "absurd'' fee increases that meant little to Government's overall revenue plan while disproportionately hurting taxpayers.

The five percent hike in vehicle licensing fees, for example, would amount to 0.3 of one percent of the budget's $385 million in revenues. "This is nonsense,'' he said.

Ferry and bus fare increases were also absurd. Some fares were as high as 30 percent, with users -- the "average man in the street'' -- having to pay.

Children too would be hit. Their fares are to rise to $1 from 65 cents -- a 50 percent increase.

While agreeing the hotel industry had been through a difficult period, Mr.

Lister said Government had to make sure that hotels getting legislated duty relief actually refurbished or improved their properties.

Sen. Lister said Bermuda had to be careful in its handling of the Island product since many other destinations were not far behind. "We need to invest more in our tourist industry to ensure that we have our market share under our control,'' he said.

Mr. Lister argued that Government should aim to encourage more visitors from Europe and Canada instead of relying so heavily on the US northeastern market.

He said Tourism should come up with a specific plan for the winter season, to replace its failed effort with Rendezvous Season.

Sen. Lister hoped that discounting would be stopped by travel agents in the United States and "reasonable prices'' be charged.

Speaking of the controversy over Boston-Bermuda Cruising, the company involved in the St. George's cruise ship, he said: "We want Government to come forward with the real truth.'' Adding that the whole business "appears to be coming apart,'' Sen. Lister believed any company involved in marketing the ship should be thoroughly checked.

He said he regarded cruise ship visitors on their first trips to Bermuda in the same way as college students. It hardly matters if they only have 10 cents in their pockets as long as they get to see the Island and want to return.

Sen. Lister then turned to Bermuda's other major revenue earner, international business, stating that he felt overseas companies had been concerned because of the apparent instability over moves towards Independence.

He said: "I find it disappointing that we, in this country, expose ourselves to this. I would find it better if the Premier would line all his ducks up and see if we are all moving in the same direction.'' He attacked the raising of fees for international businesses believing it could dissuade companies from using Bermuda.

Following earlier attacks on the PLP's "hidden agenda'' on income tax, the senator hit back, stating that a Government single tax on payroll would in effect be an income tax.

He defended his party's call to borrow money, saying that Government should have built the new prison and the incinerator years ago, to save money and boost employment. "Unemployment is now 3.3 percent. From 1960 to 1989 there was nought percent unemployment,'' he said.

Of 563 unemployed people on the Island, around 230 were aged between 16 and 25. "These are the people we call the youth. Our youth are out of work.

"Our Government needs to make an investment in youth in the future including putting more money into building the National Stadium.'' Sen. Lister said he found it strange that interest rates fell as the Minister of Finance announced the end of the ceiling on rates. And he was surprised at the Bank of Bermuda's sudden support for changes in foreign exchange regulations.

"All around this foreign exchange business we are slapped with outlandish statements from Government that cannot be backed up,'' he said.

Government Sen. Michael Winfield started by telling Sen. Lister that he could have "distilled'' his three hour-long talk into a half hour.

Sen. Winfield continued the attack by stating his amazement at Sen. Lister's apparent confusion over income tax and hospital levy.

"Sen. Lister made the outrageous statement that the budget is divisive. The budgets were designed to protect this country during the recession.

"The sole purpose in the life of the PLP is to get as much publicity and political mileage out of every issue.

"For years the PLP has advocated Independence. When Government says it is not an issue for Parliament but one for the people, we have the PLP scurrying around. Not because they disagree but because they want some political gain.'' Turning to Sen. Lister's call for land tax on businesses, Sen. Winfield said businesses created tremendous revenue by paying tax.

Sen. Milton Scott interrupted Sen. Winfield's speech by suggesting the Opposition would introduce price controls for business.

Sen. Winfield replied: "This is a new policy! Now we have price control as the answer to the whole economy. Price controls have been recognised, even by Russia, as the most counter-productive measure.

"Every economist will tell that price controls hurt the economy. If you hurt the economy you hurt the workers.'' Discounts in the tourist industry must be controlled, according to Sen.

Winfield, who said too much discounting would mean not enough money was available to be spent on keeping up high standards in the hotels.

He said the temperature guarantee scheme had helped to remove a widely held belief that the temperature in Bermuda in winter was in the 40s.

Summing up Sen. Winfield said: "No budget should stand alone. It is a succession of budgets that are part of a carefully planned process. The country has fared extremely well in the recession, because of good management and making tough decisions.'' Sen. Lawrence Scott (UBP) justified the increases in ferry and bus fares, stating that they were not Draconian.

He complained about Shadow Minister of Finance Mr. Eugene Cox who said the PLP would make decisions for the country.

He said Bermudians were now well-educated and did not need to be told what to think. He said the Government believed in "shared opportunities.'' Sen. Alf Oughton (Ind.) said he was sure the Opposition would find itself in a similar position as Government if it was in power -- having to raise taxes from time to time. Although there was much talk of the recession being over, a number of people were still out of a job or on reduced income, he noted.

Sen. Oughton said he supported Government's "prudent borrowing programme''.

One aspect of the Budget he felt could have been handled better was the relaxation of foreign exchange controls.

A booklet explaining how the moves would affect "the man on the street'' should have been -- and still could be -- compiled and made public, he said.

"I'm sure the reaction of the average man on the street is it is something for the rich man or corporate investor,'' he remarked.

Sen. Oughton also indicated he felt more money could have been set aside for St. George's. "Our most important and famous tourist attraction cannot be allowed to deteriorate,'' he said.

The Corporation of St. George's was "still sadly lacking in funds''.

Sen. Oughton said he was disappointed that the National Stadium still had not been completed despite funds being set aside for work on it in the last budget.

"It had been "a bit of an embarrassment'' when international teams visited, he said.

He felt it should have moved forward in the same way as the now almost-finished new prison.

"This fuels the negative perception that Government can find money for a new prison but not for a national stadium,'' he said.

His "biggest disappointment'' was the one percent hospital levy increase and provision for employers to pass it on to workers.

It was unfair on the many workers, certainly non-unionised workers, who had not had salary increases over the last few years and were now facing a one percent hospital levy hike, he said.

Sen. Neletha Butterfield (PLP) charged that Government had not done enough for Bermuda's young people. There were many who were out of jobs and had no money for education, she claimed.

"This Government seems to think people like being on social welfare,'' she said. "People are eager to work. They are walking up and down the pavements ... others are hanging out on the streets.'' It was getting to the point where there was "not enough space on some of the walls any more''.

"It's a serious thing out there,'' she said. "The money must be spent in the right areas.'' The new school system was still far off and she hoped Government had some interim plans for the youth, she said.

On the new prison, she said it was laughable that "a new building was undergoing renovations''.

She said she would be glad when it was finally completed. She was having to teach inmates while rain was pouring in the windows.

Sen. Butterfield also expressed concern for small businesses owing hospital levy -- and now it had gone up again.

Bermuda was not climbing out of recession, she said. It was "slowly creeping out'' of it.

Sen. Yvette Swan (UBP) knocked the Opposition for failing to say how it was going to fund all of its programmes.

"They are asking for taxes not to be increased. But where does one get the money to help the people?,'' she asked.

"Many of the things we have heard from them reminds me of a socialist mentality.'' Sen. Swan also took Opposition senators to task for choosing not to debate the Ministry of Community and Cultural Affairs because of time limitations.

It was an important Ministry, involving the entire community, especially the young people, she said.

Sen. Norma Astwood (Ind.) said the original intent of the hospital levy had been lost, to the extent it was now being misused.

It was for major work at the hospital. But when that work was completed, the hospital levy was never stopped, she noted.