A bill to waive cruise ship passenger cabin taxes at the Finance Minister's discretion was passed by MPs yesterday, despite criticism from the Opposition.

UBP MPs opposed the Miscellaneous Taxes Amendment (No. 2) Act 2009 because they said its passage through the negative resolution procedure showed a lack of accountability.

John Barritt, Shadow Minister of Legislative and Public Administration Reform, instead tabled an amendment to have the bill processed through an affirmative resolution procedure, but this was defeated in a vote.

Premier Ewart Brown's bill was passed unanimously by Government MPs in the House, despite reports it had previously faced criticism at the Progressive Labour Party caucus.

UBP MPs voted against the Miscellaneous Taxes Amendment (No. 2) Act 2009 but it was passed by 16 votes for and nine against.

Introducing the bill on its second reading, Dr. Brown, Minister of Tourism and Transport, said the amendment to Part VA (Passenger Cabin Tax) of the Miscellaneous Taxes Act 1976 would "create incentives for retention and prospecting specific to cruise lines to serve Bermuda".

He said that Government had entered into a ten-year contract with Norwegian Cruise Line (NCL) in 2008. During the 2009 season Government asked one of the ships to stay an extra night in port, to ease pressure on the marine transport infrastructure.

As one of the ships extended its stay to three nights Government offered an incentive to allow the Passenger Cabin Tax to be waived for the last night. This reduced costs to NCL of $263,472, the savings of which were then passed on to the passengers.

Currently the Passenger Cabin Tax is $14 per night from May to September, and $10 thereafter. It only applies to ships at Dockyard's King's Wharf and Heritage Wharf as it has been waived for Hamilton and St. George's until 2011.

Dr. Brown told the House: "Bermuda has one of the highest cruise taxes in the world and while Bermuda is a favoured destination, we recognise that cruise lines can deploy their ships to competitive destinations and achieve higher revenues.

"Therefore, in an ongoing effort to become more competitive, the Minister responsible the Minister of Finance will, on a discretionary basis and subject to an Agreement entered into by the Bermuda Government, waive the Passenger Cabin Tax or any portion thereof, for cruise ships in circumstances where such waivers act as an incentive to cruise ships to serve Bermuda's ports in a way that meets the needs of the Island."

He said: "While the waiving of the Passenger Cabin Tax will apply primarily to cruise lines that the Government is negotiating with to dock in St. George's and Hamilton, in some instances it may apply to ships at Dockyard, depending on the level of contribution the respective cruise line makes to Bermuda's economy.

"It is this Government's intent to ensure that any such waivers are mutually beneficial to Bermuda and its cruise partners."

Dr. Brown told the House Bermuda has four regular cruise ships currently in the season.

Mr. Barritt however, objected to the legislation.

"We (the UBP) think it goes right to the heart of the issue of governance in this country," he said.

While he recognised efforts to "develop and enhance cruise business in Bermuda", there was an accountability issue, he said.

"It provides for incentives to waive either fully or partially the cruise cabin tax but it doesn't tell us what the nature of that agreement will be."

He said: "If it satisfies the Ministers of Tourism and Finance, that is all that is required and it takes effect."

Mr. Barritt said agreements by way of the negative resolution procedure represented "an aggravation of our responsibility".

"We are talking about monies that are supposed to be raised for the Consolidated Fund," he said.

"Matters of money, finance and tax go to the very heart of Government and why we are here as legislators is to give issue when we think legislation is too high.

"Parliament ought to know the nature of the agreement in each case. It should not be left to just a notice being put in the paper (the Official Gazette), saying it's being done by the negative resolution procedure.

"The negative resolution procedure means it gets tabled in the House as something after it's been done.

"This is an unsatisfactory way of dealing with finance and this country's money."

He called for the amendment to be processed through the positive resolution procedure.

"The way it is now is to loosey goosey (casual). It ought to be done on the floor of the House of Assembly.

"The people of this country have a right to know. The people have an opportunity to look and vet, and this runs counter to that principle. That is why we find ourselves unable to support this amendment."

Michael Scott, Government Minister for Telecommunications, E-Commerce and Energy, said he was supportive of the bill as a greater cruise ship presence would lead to the "renewal" of the West End plus more investment in the local economy.

He told the Opposition: "To stand on the floor of the House in an economic downturn and look for ways of scuppering reasonable incentives of generating business is incomprehensible."

He said: "This is an endeavour and strategy simply aimed to make the wheels of business turn with greater facility and ease."

Derrick Burgess, Works and Engineering Minister, said: "By trying to keep the ships in port, it puts less strain on Marine and Ports and it puts some life into Dockyard, and into the cash registers in Dockyard."

Grant Gibbons, Shadow Education Minister, said: "The real reason for our objection is we don't like to write blank cheques on this side.

"There is too much discretion involved here and a lack of oversight by the House and that is why we can't support it."

He added: "We are quite happy to do individual cases. That makes sense."

Government Health Minister Walter Roban said: "I am quite surprised at the Opposition and am puzzled by it. The Government makes agreements with cruise ships all the time and they don't come to the House. They create the terms of theses contracts."

He said: "We've created a very small benefit that will create further benefits.

"This is a good proposal, it's good for us. It's a plus for Bermuda."

Mr. Roban said: "I certainly support this bill and commend the Premier and Minister of Finance for bringing it and getting out there to encourage the cruise ship industry to come to Bermuda."

Shadow Finance Minister Bob Richards said: "Our point of view here is not that we object to the rebates in principle. The Premier gave a very cogent reason for the debate. The issue here is whether the discretion can be given by the Ministers without it being brought to the House first.

"This is a matter of the public's right to know and is a matter that any taxes raised by the Bermuda Government have to be approved right here on the floor of the House."

But Finance Minister Paula Cox said: "I think a question of trust is what comes to mind. No one will disagree with the importance of accountability, governance and proper practice.

"We already have checks and balances."

She added: "We don't see the need to have a cruise ship concessions act. We are certainly looking at something that will be very limited in scale and scope."

But Patricia Gordon-Pamplin, Shadow Works and Engineering Minister, said: "It's not a matter of trust, it's a matter of process. It's the thin end of the wedge. We have to have a level of accountability.

"I do believe the very statements made by the Minister in the course of the last few days may give question to that question of unilaterality by ministers."

She added: "We want to know that this House of Assembly is fully accountable to the public purse, so the people of Bermuda know where their revenue arises from and if it is going to be diminished."

Premier Dr. Brown told the House that the negative resolution procedure had been introduced by a previous government, but that by placing a notice in the Official Gazette for a required time period.

"Every MP has access to the Official Gazette and can bring an issue based on that notice to the House, so there is no lack of transparency," he said.

"It's important for ministers opposed to understand that transparency."

Dr. Brown added: "It's important for members opposed to this to understand that the marketplace is not as easy and fixed as it used to be."

Stressing the need for flexibility in the modern cruise ship industry, he said: "This is a model that will allow us to make adjustments."