The following is the full text of the Opposition's response to the 2003 Budget, delivered in the House of Assembly yesterday by Opposition leader Dr. Grant Gibbons.

To His Honour the Speaker and Members of the Honourable House of Assembly:

Mr. Speaker,

I am pleased to present to this Honourable House the United Bermuda Party reply to the 2003/2004 Budget Statement.

For Bermudians, the year 2003 brings an election. Sometime soon, this Parliament will be dissolved, and the people of Bermuda will go to the polls. At that time we will make a choice of great consequence for our quality of life and the future of our country. We can choose five more years of false hope, undelivered promises and divisiveness from the Smith Government. Or we can embrace the vision of today's United Bermuda Party: to create One Bermuda in the 21st century.

The signs of an election are everywhere. We see it in the 2003/2004 Budget, a tired document delivered by a government that is out of gas, out of touch, out of ideas and out of time.

We see an election in the sudden activity of Cabinet Ministers, who realize that the time for judgment by the people has arrived. But announcing summit meetings can't hide the significant deterioration in our social fabric since 1998. Ministers rushing to do something at the last minute can't erase their five-year record of inaction in housing, healthcare, drugs, crime, and tourism. And nothing can disguise the arrogance, self-dealing, secrecy, scandal and abuse of power that have characterized the Smith Government from day one.

For the first time, the Progressive Labour Party has a record to run on, and what a disappointment it is. Not even the promise of no new taxes will convince an impatient and disillusioned public that Bermuda is on the right track.

Mr. Speaker,

The record of the Smith Government is far from what we were promised. In 1998, the majority of Bermudians thought that something good and positive would come from a change in government. At the very least, our democracy would be strengthened. And many Bermudians, particularly black Bermudians, believed, perhaps for the first time, that they could finally participate in a social and economic system from which they had always felt excluded.

But the Smith Government has deeply disappointed these legitimate hopes. They have made serious mistakes in office that cannot be blamed on inexperience, the media or previous governments. These mistakes threaten our quality of life, our economy and our reputation as a well-governed country.

Mr. Speaker,

Over the past five years of Smith Government, deep gashes have appeared in Bermuda's social fabric. Concern grows that our major helping institutions are in disarray from mismanagement and inattention. The National Drug Commission and treatment facilities are dysfunctional. Our hospital's finances are in critical condition, threatening the entire healthcare system. The Housing Corporation is embroiled in criminal allegations and scandal. Police officers stand accused of drug importation. Frustrated teachers go on a weeklong strike. Misguided young men join violent gangs and take each other's lives with illegal weapons. Some attack tourists and elderly women.

Whatever glue held us together as a civil society in the past is coming unstuck.

Mr. Speaker,

Over the past five years, the bond of trust between government and the people has been severely damaged, if not severed.

Early on, the Smith Government refused to allow the people of Bermuda to ratify far-reaching changes to their own Constitution. More recently, Cabinet Ministers and PLP backbenchers have used calculated and defamatory accusations of racism to stifle legitimate criticism from those who don't "look like them" or think like them. Anyone foolish enough to question the wisdom of joining Caricom was accused of racist thinking. The Auditor General, a highly visible victim, said their unprecedented attacks "indicate the length that officials will go to escape accountability when they have no legitimate answers to legitimate questions".

For five years, the Smith Government has withheld or delayed the release of information that rightfully belongs in the public domain. The current refusal to provide the Auditor General with information about the Berkeley performance bond is just the latest example of a pattern of concealment that began in 1998. At this point, no one can doubt that the PLP call for transparency in the last election was a complete sham.

Concern grows every day that the Smith Government can't be trusted to do the right thing.

Mr. Speaker,

Since 1998, the structure of our economy has changed significantly and now poses serious challenges for Bermuda's future. As the Smith Government presided over tourism's free fall, we became dangerously dependent on international business and the political whims of the US Congress for our prosperity. Only a perverse windfall from the tragedy of 9/11, resulting in the formation of new reinsurance companies-and an overheated construction industry, have kept our economic head above water.

Not once in five years has the Smith Government presented a comprehensive plan to deal with our increasingly narrow economic base and meet the other broad challenges that will inevitably test Bermuda's economic viability, including the aging population, rising healthcare costs and the $60 million bill for toxic waste remediation.

Unless we tackle these issues now, we won't be in any position to build the fairer and more inclusive society we all want. The United Bermuda Party believes that a good government must do more than react to events; it must shape them. Managing the economy by treading water isn't good enough to meet the needs of Bermudians facing a radically different 21st century.

The Smith Government: Undelivered Promises

Mr. Speaker,

Since this is an election year, let's look at some of the PLP promises for economic management made in 1998. They said, "Make it happen". Let's see what really happened.

In 1998 the PLP said, "Our first priority is to have a comprehensive review of the tax system."

Here's what really happened: Early in 1999, the Smith Government revised the comprehensive tax review completed by the last UBP government and promptly suppressed it. For five years, the Finance Minister has failed to produce a coherent tax policy. What are they hiding?

While the people of Bermuda never got the promised tax review, they did get the taxes. Whopping increases in land and payroll taxes have added appreciably to the cost of living and doing business in Bermuda. Since the Smith Government began raising taxes in 1999, the land tax burden has increased by 52 percent. And despite post-9/11 tax breaks to restaurants and tourist-oriented businesses, the payroll tax burden has jumped by 27 percent-all in the midst of an uncertain economy.

In 1998 the PLP said, "We are committed to introducing an Unemployment Insurance Programme".

Here's what really happened: Unemployment insurance has been in the PLP platform since 1963. After more than four years in government and $1 million spent in "seed money", they are still talking about it. They can't decide who will benefit from it, let alone decide who will pay. There is no consensus among employers or employees that unemployment insurance is needed or wanted. Even the Labour Minister admits that there are more jobs available than Bermudians to fill them. Times have changed since 1963, but the PLP apparently hasn't.

In 1998 the PLP said, "We will strengthen the Office of the Government Auditor."

Here's what really happened: They changed his title from Government Auditor to Auditor General and gave him direct responsibility for staffing. After the newly strengthened Auditor General forwarded results from the Bermuda Housing Corporation and the Berkeley audits to the police for criminal investigation, however, the Minister for Works and Engineering said that the Auditor General should be replaced on a regular basis. A PLP backbencher accused the Auditor General of racially motivated criticism. Since the Premier did not disavow these remarks, we can only conclude that they represent the position of the Smith Government and demonstrate an utter lack of understanding of the role of Auditor General.

In 1998 the PLP said, "We will ensure that public funds are disbursed and accounted for in accordance with the appropriate Parliamentary processes."

Here's what really happened: The Report of the Auditor General on the fiscal year ending March 2001 pointed out that 13 government departments had overspent their operating budgets without first obtaining proper legislative approval. The Auditor General said, "These overspendings are not mere budget variances; they are serious legal infractions....Since they are prohibited by the Bermuda Constitution Order, they are also unconstitutional expenditures. This is therefore a very serious concern."

We note that the illegal practice continues. The 2003/2004 Budget statement mentions supplementary requests totaling $2.2 million that have not received Parliamentary approval.

In 1998 the PLP said, "We will introduce new standards of revenue management and we will root out waste and inefficiency."

Here's what really happened:

Government travel budgets have more than doubled since 1998.

Ministers gave themselves per diem travel allowances for which they are not held accountable.

Ministers gave themselves oversized cars.

One well-paid painter for the Bermuda Housing Corporation raked in $800,000.

$700,000 of taxpayer's money remains unaccounted for on the Berkeley project.

The Premier refuses to reimburse the people of this country for the cost of a political broadcast she delivered a year ago and improperly billed to the taxpayer.

In 1998 the PLP said, "We will assist and facilitate more open, transparent budget processes, with new emphasis on accountability and new standards of revenue management and stringent control of expenditure."

Here's what really happened: In just about every budget the Smith Government has produced since 1998, current account and capital expenditures were budgeted to increase at rates grossly in excess of growth in the economy and the rate of inflation. That may be stringent control of expenditure in the New Bermuda, but in the real world, it is not prudent fiscal management.

Mr. Speaker,

If the Smith Government hasn't kept its promises so far, can we afford to give them more time to deliver? More time that leads to more mismanagement? More secrecy? More tax increases? More wasteful spending? More time isn't the answer, because more time means more of the same.

The Smith Government: Economic Management since 1998

Mr. Speaker,

As the Smith Government nears the end of its term, we recognize a consistent pattern of economic management that should raise serious issues for anyone concerned about future prosperity and stability in an uncertain world.

The Smith Government: Aggressive Taxation and Poor Forecasting

We know that this is a government with an aggressive approach to taxation. In this coming financial year, individuals and businesses will be paying over $100 million more than they did in 1998/1999. There were no tax increases, predictably, in this election-year budget. But since 1998, the people of Bermuda have paid far more than they needed to. Many in the community feel they have been working longer hours for less take-home pay, and with good reason.

The land and payroll tax increases imposed in 1999 and 2000 were so excessive that they have generated appreciably more revenue than the government estimated every year since, and this underestimated revenue has offset projected borrowing. In the 2002/2003 Budget, for example, revised tax revenue estimates exceed the original forecast by $31.9 million. That is not good fortune. That is not the result of a booming economy, which only grew by 1 percent. That is bad forecasting, and the miscalculations of the Finance Minister have placed an unnecessary tax burden on the people and businesses of this country for several years.

In this Budget we see that old habits die hard. Once again, we predict that the Finance Minister will have underestimated payroll tax revenue for the coming fiscal year. At $185 million, this improbable forecast is $6.1 million lower than the actual payroll tax revenue received two years ago, despite wage increases and the Minister's own growth forecast of 1.5 percent. This practice of deliberately underestimating revenues and replacing them with borrowing in the face of global uncertainty and potential war is not a prudent strategy.

The Smith Government: Attempting to Solve Problems by Spending More

Mr. Speaker,

Every year, the Smith government spends more and more money to solve problems, and every year the problems get worse. Greater spending has not brought a fairer society or

closed the gap between the haves and have nots. In fact, we are more divided than ever. Nor has heavy spending made a difference in the everyday lives of real people having trouble with affordable housing or adequate healthcare coverage or who just want to feel safe on our streets and in their homes.

The Ministry with the largest budget has a notable record of failure. Health and Family Services consumes $132.3 million, or 21 percent of current account expenditure. This Ministry has been responsible for managing the Bermuda Housing Corporation, the hospitals and the National Drug Commission, all of which have become either dysfunctional, financially unstable or embroiled in scandal under the Smith Government.

The Tourism Ministry spent over $140 million since 1998, while the economy lost $278 million in visitor spending. For every dollar they spent, they lost two. A better example of wasteful spending and poor management cannot be found.

Clearly, spending money is only part of the solution. Good management, thorough oversight and efficiency are also required, and this government has come up short in every area.

Once again in the new Budget, the Smith Government is raising spending levels, projecting an increase in current account expenditure of 6.7 percent, or $39.4 million. This will exceed the rate of inflation by almost three times and the projected GDP growth by over four times. The people of Bermuda have every right to believe they aren't getting their money's worth.

The Smith Government: An Incautious

Approach to Debt

Mr. Speaker,

The Minister of Finance boasts about "government's debt management performance." He notes that the net debt provision at March 31, 2003, is projected to be $123.5 million, which is lower than the $146.7 million in place at March 31st, 1999. However, this drop is entirely the result of the sinking fund requirement put in place by the United Bermuda Party government in March, 1993, which automatically lowers the outstanding gross debt on an annual basis. Cumulative gross debt itself has remained relatively unchanged from March, 1999, when it was $163.5 million, to March, 2003, when it is projected to be $160 million.

While the Smith Government has not increased the debt over the last four years, this has not been their intention. Their Budgets over the last four years have called for cumulative borrowing of $170 million. In the 2003/2004 Budget, we are looking at a record single-year borrowing projection of $78 million, or, more accurately, $81 million when the $3 million loan earmarked for the Housing Corporation is included. For that matter, the proposed $5 million loan guarantee for the Bermuda Land Development Company also counts against government debt.

Up to now, the government has not had to borrow, because the oversized tax increases imposed in 1999 and 2000 created enough revenue to cover costs for both operational and capital projects. In addition, they have been unable to move capital projects forward on schedule, reducing their need for borrowing.

While this may seem fortuitous, the tax burden is keenly felt by individuals and businesses, who collectively are now paying over $100 million more in taxes per year than they were in 1998. As the Finance Minister said in his first Budget Statement, "In the real world, someone must pay."

The Smith Government: Bigger Government

Mr. Speaker,

Whatever happened to the PLP promise to cut out waste, inefficiency and pockets of sloppiness in government? The size of Bermuda's government has increased substantially since 1998, and the cost of running it rises every year. Comparing this budget to 1998, 435 positions have been added to the civil service-a 9 [[1/2]] percent increase-and projections for 2003/2004 put total civil service jobs at over 5,000 for the first time in Bermuda's history.

The Smith Government: Fewer Jobs for Bermudians

Mr. Speaker,

In November, the Premier claimed that her government had created 2,000 new jobs for Bermudians. In the new Budget statement, the Finance Minister tells us that during his tenure, more than 2,400 overall jobs have been created. Both statements fly in the face of the facts.

Between 1998 and 1999 there was, indeed, a large, one-year jump in the number of overall jobs recorded, but the 2000 Economic Review attributed this unusual increase to different measuring techniques and "a major effort to increase the number of firms reporting." In fact, from 1999 to 2002, there was an overall loss of jobs, from 37, 849 to 37,768.

When you dig into those overall numbers, you see that in the period from 1999 to 2002 there was a loss of 1,000 Bermudian jobs and a gain of 771 non-Bermudian jobs.

The percentage of non-Bermudians in the workforce rose from 23.4 percent in 1998 to 26.6 percent in 2002.

So we urge the Premier and the Finance Minister to dispense with their new math and tell it like it is: Bermudians have lost out big time in the job market on the Smith Government's watch.

They also need to admit that government revenue and the social insurance fund are now dependent on the financial contributions of non-Bermudians and their employers, who annually contribute some $20 million to social insurance and $60 million, or roughly one third, of the total payroll tax.

The Smith Government: Increasing Bermuda's

Dependence on

International Business

Mr. Speaker,

Bermuda's increasing dependence on international business as our major industry and principal source of foreign exchange earnings has become markedly pronounced since 1998. Spending by international companies in Bermuda rose to an estimated $986 million in 2001, while visitor expenditures were only $350 million and falling. By 2001, the number of jobs in international business overtook the number of hotel jobs for the first time. International business has grown at a rate where its demand for labour has outpaced the local job market's capacity to supply it.

The buoyancy in international business since 1998 is mostly good news; the industry rescued our economy from the tourism-driven recession of 2001 and continues to fuel tourism itself. In 2000, the last year for which these figures were released, 14 percent of air arrivals were connected to international business. Presumably, that percentage has increased. International business also provides new job opportunities for Bermudians, sustains many local service providers and contributes heavily to our social and cultural institutions.

But Bermuda pays a price for success in international business. First, risks to the economy are concentrated in one sector. And when international business becomes the dominant economic force in a small jurisdiction such as Bermuda, there is a risk of one industry having too much influence over government. The term "capture" has been used in other small jurisdictions, such as Jersey and Guernsey, to describe what happens when a government is forced for economic reasons to identify its interests solely with those of international business. Some financial observers have referred to this situation as "a legislature for hire."

We also feel the impact of success on our quality of life; international business affects our labour market, housing, education, traffic, environment and culture in both positive and negative ways. The United Bermuda Party recognized and discussed these issues in the 1990s. In 1998, the former UBP government initiated a study, headed by Senator Walwyn Hughes, to assess the sustainability of growth of international business and its impact on Bermuda's infrastructure. Sadly, the newly elected Smith government immediately abandoned the initiative.

Success comes in cycles, and growth in international business may be difficult to sustain in any case. Recent indicators are worrying. New additions of exempt companies to Bermuda's corporate register grew steadily throughout the 1990s and peaked in 2000. However, for the first three quarters of 2002, new registrations have dropped 40 percent below the same period in 2000 and have even fallen below 1997 levels. Similar trends are reflected in the growth rate of exempt companies on the register, which has slowed appreciably, from 9.5 percent growth from 1999 to 2000 to an almost negligible 0.2 percent growth from 2001 to 2002.

The slowing growth of international business and the decline in tourism are reflected in Bermuda's balance of payments surplus on current account, which dropped from $260 million in 1999 to $145 million in 2001. The first three quarters of 2002 show a further plunge of $111 million from the same period in 2001. If this deterioration continues, Bermuda might be forced to reconsider its position on exchange control.

There has never been a more urgent need for economic diversification, both within international business and in Bermuda's economy overall.

The Smith Government: Dropping the Ball on Tourism

Mr. Speaker,

While tourism has faced challenges over the last two decades, what we have seen since 1998 has been free fall. Since then, the economy has lost over a quarter of a billion dollars in visitor expenditure that didn't go into the pockets of hotel workers, taxi drivers, restaurant workers and other hospitality service providers.

In the new Budget, The Finance Minister grabs for positive straws by comparing slightly higher 2002 figures for arrivals, bed nights and visitor expenditure with figures from 2001. But this comparison is meaningless, because 2001 was the worst tourism year in three decades. The year 2002 is still down on the year 2000, in all these areas. In fact, visitor expenditure for 2002 is some 20 percent below visitor expenditure in 1998.

Taking a longer view, we see that

Bednights have dropped 20 percent since 1998,

Air arrivals are down 23 percent since 1998, and

Cruise arrivals are up 6.2 percent since 1998. Cruise-ship passengers now account for 41 percent of total visitors.

Perhaps the most devastating effect on tourism since 1998 can't be revealed through statistics. It is psychological. The Smith Government has created a crisis of confidence in tourism; many Bermudians no longer believe that tourism can turn around. Some may no longer care.

The Smith Government: Unprepared for the Future

Mr. Speaker,

We live in an age of global uncertainty, but many threats to our economy can be foreseen. Yet not once since 1998 has the Smith Government presented a comprehensive and long-term plan to address obvious, fundamental and inescapable challenges to our economic well being and social infrastructure.

One of those challenges is our aging population. In 2000, 13 percent of Bermudians were over 65. That percentage increases every year. The significant economic impact this age group will have upon housing, healthcare, and pensions is predictable and must not be underestimated. Right now, 80 percent of all healthcare expenditures cover the medical needs of the elderly, and over half of this comprises hospital care. But this Budget and previous Budgets have failed to present a plan to manage this inevitable development in a way that will give our seniors the safety net they need, yet won't bankrupt Bermuda.

The United States military left Bermuda with dangerous toxic waste at Morgan's Point and Southside. This potent combination of asbestos, petroleum and toxic metals could threaten the health of our people and contaminate the Southampton water lens. It certainly inhibits the development of Baselands properties that could help rejuvenate tourism and contribute substantially to our economy. You will recall that last year the Smith Government signed a shameful, one-sided termination of the U.S. Bases Agreement, which saddled us with the $60 million bill for environmental cleanup. But this Budget fails to indicate when we can expect remediation of this environmental disaster and how the Smith Government plans to pay for it. Nor does this Budget account for the one-time $11 million payment the United States gave Bermuda to replace Longbird Bridge.

Today's housing crisis is real and complex. The waiting list for emergency housing for the poor and homeless grew from 1998 and remains substantial. But in today's Bermuda, even the middle class has a hard time paying for adequate housing. Since 1998, the forces of changing demographics, supply and demand and government inaction have converged to create a crisis of affordability and availability.

The new Budget indicates that the Smith Government will "eliminate barriers between those who have and those who do not...through a refocused emphasis on the original mandate of the Bermuda Housing Corporation." In other words, they will continue to address an old problem with an old solution. The United Bermuda Party does not believe that evicting tenants and collecting arrears with all the charm of a drill sergeant is the answer to Bermuda's housing problems. In fact, we're not certain that the Bermuda Housing Corporation, as it is currently structured, does what it was originally intended to do. Its mandate needs a complete rethink, not refocusing. The answer to Bermuda's housing problems will not be found in the BHC. Until we address the fundamental causes of Bermuda's housing problems and look for innovative solutions, we will not meet the needs of all of our people.

In the mid-1990s, concerns about escalating healthcare costs and quality of care prompted the former United Bermuda Party government to undertake a review of Bermuda's healthcare system. The conclusions were reported in what is now referred to as The Oughton Report. In 1997, a comprehensive strategic plan for implementing healthcare and hospital reform, informally called the Andersen report, was produced and debated in this House. Since then, little progress has been made. With the exception of disease management programs for asthma, diabetes and heart disease-which have proceeded due to the passionate commitment of several outstanding healthcare professionals-few of the cost-saving recommendations have been implemented.

The Smith Government must take full responsibility for this failure. They knew about the problems five years ago, yet they did not proceed with any sense of urgency. Inaction on healthcare reform has wasted millions of taxpayer dollars and caused the healthcare system to deteriorate further. When doctors and insurers can't agree, patients suffer. When KEMH faces grave financial difficulties and a crumbling physical plant, patients suffer. This is the real world, and when the Smith Government fails in its duty, real people pay.

The Smith Government: The Land of Lost Opportunity

Mr. Speaker,

The Smith Government has wasted enormous opportunities for sustainable economic development through mismanagement and neglect of our Baselands properties. The BLDC made a promising start and was on the verge of closing an attractive development deal for Morgan's Point in 1998. The Smith Government abandoned that proposal for reasons of pride and politics, and after four years they have been unsuccessful in closing another deal of their own.

Mr. Speaker,

The 2003/2004 Budget can be summed up in three sentences: First, to woo the voter in an election year, there will be no new taxes. Second, current account spending will increase by 6.7 percent, and ever more taxpayer dollars will go into the abyss of unproductive programmes that are not improving the lives of Bermudians. Third, government intends to set a record for single-year borrowing in the amount of $81 million.

The Next United Bermuda Party Government: Where We Will Go from Here

Mr. Speaker,

After five years, the Smith Government clearly knows how to tax and spend. But the 2003/2004 Budget, unfortunately, is not a blueprint for long-term prosperity. It fails to articulate a clear economic policy that demonstrates how this government intends to address the fundamental economic and social challenges facing Bermuda. It is a clear confirmation that the mistakes of the past five years will be repeated in the future if the Smith Government remains in office.

Building a solid future for Bermuda in the 21st Century demands more than the ability to budget from year to year. It demands, first, the ability to imagine the stable and prosperous future we want all Bermudians to share, and then the skills and resources to get us there.

The new United Bermuda Party believes that reinvigorating our economy through diversification is the best way to close economic gaps; to house our people; to support educational excellence for our children; to provide safety and security for ourselves and our visitors; and to clean up and preserve our environment. Diversification will reduce our dependency on international business and provide new opportunities for sustainable growth.

We also believe that reinvigorating our economy requires tighter control over spending and borrowing and an effort to reduce the tax burden for individuals and businesses.

The Next United Bermuda Party Government: Economic Management for the 21st Century

Mr. Speaker,

The next United Bermuda Party Government will modernize the way Bermuda manages its economy by creating two separate ministries, one responsible for finance and budgets-similar to the current Ministry of Finance-and another for tourism and economic development.

The new Ministry of Tourism and Economic Development will be dedicated to identifying, nurturing and delivering 21st century economic opportunities to the people of Bermuda. We will apply the most innovative financial thinking, best management and aggressive promotion to enhance Bermuda's competitiveness, to attract investment to Bermuda and provide new business and career opportunities for all Bermudians.

The Department of Economic Development will be dedicated to diversification both within the international business sector and within the broader economy. We will work hand in hand with labour, social organizations and the private sector to ensure that new development matches our resources and that the benefits of development are widely distributed in our community.

We will create an Economic Development Advisory Board of distinguished and respected professionals in finance, technology, hospitality, and human and environmental resources. These advisors will provide perspective, strategic advice and useful connections to the global environment in which Bermuda must compete.

An Office of Economic Empowerment will operate within the Ministry of Tourism and Economic Development. It will provide hands-up assistance to Bermudians with the will to succeed but not the means. It will help provide the tools needed to compete effectively in Bermuda's economy. This will include:

Training for small businesses in how to bid for government contracts,

The creation of economic enterprise zones, particularly in North Hamilton,

Identification of angel investors for start-up businesses in need of capital,

Better coordination of existing agencies to cut red tape and bureaucracy,

Developing a policy for outsourcing more government work to small businesses, including those demonstrating competency but without previous government experience, and

Broadening the role of the Small Business Development Corporation to provide new services to their clients, including the brokering of venture capital financing.

The Next United Bermuda Party Government: A Balanced Approach to International Business

Mr. Speaker,

The United Bermuda Party understands that a two-fold approach to international business is required to sustain the buoyancy of the industry while protecting the interests of Bermudians and our quality of life.

First, the next United Bermuda Party government will provide support to international business that is consistent and visible. We recognize that regulatory requirements in competing jurisdictions are now very much the same. We will compete on our ability to market and deliver services better than others. So we must ensure the best integration between government and business in the areas of immigration, education and training.

Second, consulting broadly, we would immediately proceed with the sustainability study on international business that we initiated in 1998 and have called for consistently ever since.

This analysis will examine the limits to growth of our international business sector; its impact on our workforce, housing, education, open space and traffic; and its continuing contribution to Bermuda's quality of life and future opportunities.

The study will also examine threats to the continuing success of international business and will enable us to better manage them. Threats may arise externally from US patriotism, international regulatory initiatives or competitive jurisdictions. They may arise internally from overcrowding, concern for safety, rising costs of doing business, increased red tape or the availability of Bermudian employees. No matter where challenges come from, Bermuda must be prepared to go to bat for international business and fight for our country's financial security.

The Next United Bermuda Party Government: Believing in Tourism Again

Mr. Speaker,

The dismal performance of tourism under the Smith Government pushed Bermuda into recession and created an unhealthy dependency on international business. The shocking rates of decline since 1998 can only be attributed to mismanagement and misguided policies.

Today's United Bermuda Party believes that before we can recreate tourism in Bermuda we must believe in it, and to give it the energy and emphasis it deserves, we must modernize the way tourism is managed.

The next United Bermuda Party government will do just that, by strategically focusing on tourism as a key component of economic development and creating a Tourism Authority to manage the day-to-day business. Our goals are clear. We will:

Restore tourism's major contribution to our economy,

Take the politics out of tourism,

Get tourism back into the hearts and minds of all Bermudians,

Provide Bermudians currently working in hospitality with shorter off-seasons, better benefits and greater job security, and

Give young Bermudians good reasons to make tourism their first-choice career.

How the Tourism Authority Will Work

Within six months of forming the government, the United Bermuda Party will create, fund and empower the Tourism Authority to manage product development, marketing and air service strategy. It will immediately develop a short-term survival plan and a long-term growth plan. The team will be led by hospitality professionals and directed by a board chosen from the hospitality, financial, union and government sectors. The PLP Shadow Minister will receive minutes from every Board meeting, and his or her input will be solicited on a regular basis.

Funding for the Tourism Authority will be derived from two sources: an annual government grant based on tourism tax revenues and private sector contributions. The Tourism Authority will be accountable to Parliament through the Minister of Tourism and Economic Development. Meanwhile, the new Ministry of Tourism and Economic Development will support the efforts of the Tourism Authority through research, identification of new opportunities, marketing to investors and financial analysis.

Key Opportunities for Tourism Redevelopment.

Three areas in Bermuda are ripe for redevelopment. The next United Bermuda Party Government-through the Ministry of Tourism and Economic Development and working hand-in-hand with residents-will focus attention on Hamilton and White's Island, the World Heritage Site of St. George's and Dockyard to create three unique entertainment and cultural centres for visitors.

Just imagine a redesigned Hamilton waterfront, White's Island and North Hamilton as the island's entertainment mecca for all ages, filled with shops, open-air markets and restaurants. During the day, White's Island serves as a watersports center; at night, it turns into a fun nightlife destination, serviced by a fleet of water taxis. A revitalized North Hamilton offers up music, multicultural dining and street performers. Anyone who has been to Pleasure Island at Disneyworld, Faneuil Hall in Boston or South St. Seaport in Manhattan will understand the concept.

In the East End, St. George's will exploit its World Heritage Site status to lure those interested in culture, history and theater. A multi-use cultural site replaces Club Med and includes a charming boutique hotel that reflects Bermuda's history. St. George's must become Bermuda's Williamsburg.

And Dockyard will continue to bring Bermuda's maritime history to life. A sound and light show in the Keep describes the tales of Bermuda's ancient and modern-day mariners. Dockyard must become our Newport.

Mr. Speaker,

These ideas may sound like a dream, but the United Bermuda Party believes in them. We haven't lost our vision that tourism can once again shine brightly. It won't be easy, and it won't happen without hard work. But it won't happen at all unless we modernize the way we manage Bermuda's tourism.

The Next United Bermuda Party Government: Making Bermuda Safe Again

Mr. Speaker,

Our best efforts to attract visitors and international business to Bermuda will not be successful if our community is not safe and secure. No one feels safer now than they did in 1998, and the Smith Government is either silent or soft when it comes to taking a stand against crime.

Today's United Bermuda Party believes we need to send the strongest possible message to people who commit crimes in Bermuda that they will be caught, prosecuted and appropriately punished. And the people who obey the law, the majority of this island, need to believe they can live their lives free from fear, in safety and security, knowing that the criminal justice system works in their interests.

The next United Bermuda Party government will deliver tough action on antisocial behavior, drugs and crimes of violence. We will strike a better balance between punishment and rehabilitation, and we will give our police and prosecutors the manpower, tools and financial resources they need to bring criminals to justice.

Reform of the criminal justice system is essential, and changes must be made in the Police Service, the Attorney General's chambers, the judicial system and the prisons.

Enhancing Detection of Crime

Mr. Speaker,

The new United Bermuda Party believes the following steps must be taken to enhance detection and develop a more responsive and accountable Police Service:

Increase Police Service manpower levels, focusing on beat officers,

Set clear goals for a visible police presence in neighborhoods, especially those with high crime rates,

Reduce response-time rates, supported by improved collection and reporting of police statistics,

Provide better training for criminal investigation to improve the collection and value of evidence,

Ensure a fully functioning police station in St. George's,

Create an independent Internal Affairs Department to investigate allegations of corruption or criminal misdeeds by police, customs or prison officers, and

Pass legislation to activate the Police Complaints Authority.

Enhancing Prosecution of Crime

Mr. Speaker,

Today's United Bermuda Party believes that to enhance prosecution Bermuda must have an independent, nonpolitical Attorney General. Once appointed, the new Attorney General should conduct an audit of Chambers staff to ensure that the best possible people are in place to prosecute effectively. We support a review of salary structure if that is required.

The United Bermuda Party believes that to improve rates of conviction and to ensure that the punishment fits the crime, reforms are needed in the judicial system and the criminal code. We will:

Review the Criminal Code and strengthen punishment options,

Make it clear that life means life by sentencing people convicted of capital crimes to life in prison without parole,

Remove the rule against double jeopardy in cases of serious crime, and

Consider trial by judge or panel of judges in serious or complex drug or fraud cases or where a jury is at risk of intimidation.

Enhancing Rehabilitation

Mr. Speaker,

We believe that strong steps must be taken to prevent those convicted of crimes from re-offending. To that end, the next United Bermuda Party Government will:

Install ion scanners at every prison,

Mandate rehabilitation and/or skills training as a condition of parole,

Review prisoner release programs to provide adequate supervision and support, and

Manage the ATI and Drug Court programmes effectively, providing properly trained and adequate staff to make the system work.

Enhancing Drug Interdiction and Treatment

Mr. Speaker,

Today's United Bermuda Party understands how drugs have devastated our community and how drugs are connected to crime. The temptation of quick, easy money has wasted too many young lives and victimized too many law-abiding citizens. This cannot be tolerated.

The next United Bermuda Party Government will:

Make drug interdiction-from the top down-the highest priority,

Implement random drug testing for all elected officials,

Review the criminal code to ensure that penalties for drug dealing are a real deterrent, and

Review the mandate and effectiveness of the National Drugs Commission, the Bermuda Assessment Referral Center and other government-sponsored treatment facilities to ensure that the taxpayer's money is directed to programs and agencies that produce results.

The Next United Bermuda Party Government: Making Education Work for Our Children

Mr. Speaker,

The most direct link between an individual and his or her future earning power is education. It is a better indicator of financial success than race or gender. This is made absolutely clear in the 2000 Census, which shows that the higher the level of educational accomplishment, the greater the income from employment.

If our children succeed in school, they are likely to succeed in the workplace, in either technical or white-collar jobs. If Bermudians succeed in the workplace, Bermuda will prosper. We can't afford to let our education system fail.

In recent years, we have seen decline. There has been an exodus to private schooling; according to the 2000 Census, 45 percent of senior secondary students attend private schools. We have seen violence in schools. We have seen frustrated teachers strike and too many good teachers leaving teaching altogether. Since 1998, the budget for education has increased by 33 percent, and yet there are fewer students in the government system. The increases are hard to justify without seeing subsequent results.

The next United Bermuda Party Government will work to reform the education system following three basic principles:

1) Increased emphasis on the individual student and the role of parents;

2) Setting higher standards and demanding greater accountability for better results; and

3) Increased responsibility and flexibility for each school.

The next United Bermuda Party Government will:

Develop the whole child by establishing a specialist team in each school that provides academic, study skills, social and behavioral support to students and their parents,

Improve performance by setting high academic standards in language, math and science, and eliminating social promotion,

Increase the opportunities for individual success by requiring that music, art, drama, sports and community service be fully integrated in the curriculum, and

Provide our children with the choice of a "Bermuda Tech" education, which in previous years provided excellent preparation for so many in our community to assume positions of leadership.

Mr. Speaker,

A critical component of secondary education-the Berkeley senior-school project-is reportedly over a year behind schedule and millions of dollars over budget. The details of this disaster are reported daily in the press. The taxpayers want to know how and why this was allowed to happen. Yet we have no credible response from the Minister of Works and Engineering and no indication as to how the Smith Government will salvage this costly exercise in mismanagement.

The Next United Bermuda Party Government: Making Housing Available and Affordable

Mr. Speaker,

The scandal at the Bermuda Housing Corporation has distracted attention from the fact that the Smith Government has done little to provide housing to those in need.

The next United Bermuda Party Government will make the housing crisis a priority and will:

Take care of desperate families by aggressively renovating or building housing to meet their needs,

Bring new, creative thinking to bear on the complex problems of availability and affordability by developing a long-term National Housing Strategy in consultation with experts in housing, planning, finance and the environment,

Clean up the Bermuda Housing Corporation and restructure it to ensure that it meets the current needs of those it is intended to serve,

Encourage more private construction of affordable housing in special development zones through tax and other incentives,

Encourage construction of multiple-dwelling units in high-density areas and the liberalization of building height restrictions for special housing initiatives, and

Encourage home ownership and help people save more of their money by significantly reducing the death tax on a primary residence.

The Next United Bermuda Party Government: Serving Our Seniors

Mr. Speaker,

Our senior citizens have spent a lifetime serving Bermuda. Now we must do a better job serving them. We have noted that the Smith Government has failed to address the inevitable impact of the aging population on Bermuda's economy. But right now, in our neighborhoods, many seniors are struggling to live their lives with dignity, when adequate housing, income, healthcare and security are so difficult to obtain.

The next United Bermuda Party Government will immediately develop a long-term strategy for providing an acceptable quality of life and comprehensive services for our growing elderly population, focusing on healthcare, housing and pensions. In the short term, we will:

Implement automatic annual contributory-pension increases, tied to the cost of living,

Address gaps in healthcare for seniors by aggressively pursuing healthcare and insurance reform,

Provide seniors with better legal protection by prohibiting age discrimination in our Human Rights legislation,

Raise the age of retirement in the civil service to 70 from 65,

Provide free prescription drugs and eyeglasses for seniors in financial need,

Ensure that our National Housing Strategy addresses the specialized housing needs of the elderly, including assisted-living facilities, and

Implement recommendations for standards of care in home healthcare, rest homes and rehabilitation centers.

The Next United Bermuda Party Government: Reforming Healthcare

Mr. Speaker,

Without immediate reform, Bermuda's healthcare system will continue to deteriorate and become even more costly. The road map to reform was handed to the Smith Government in 1998, but they never got in the driver's seat.

The next United Bermuda Party government will move immediately to implement recommendations designed to lower healthcare costs, make adequate healthcare a reality for all Bermudians and improve the quality of on-island care. These include:

Work with private sector insurers to provide affordable products that better meet the needs of Bermuda's seniors,

Develop new reimbursement schemes for the hospitals, physicians and ancillary providers,

Promote the use of outpatient emergency care sites outside the hospital, especially in St. George's and Somerset,

Implement a uniform, central system of healthcare data collection and storage, and

Address the regulation of physician-owned services.

The Next United Bermuda Party Government: Guiding Young People Toward Productive Lives

Mr. Speaker,

Recent headlines have highlighted serious problems with youth violence in our community. Government leaders must acknowledge that the problem exists and state that unacceptable behavior at any age will not be tolerated. We must also address the causes of these problems to the best of our ability, knowing that no well-intended government program can substitute for stable and loving families and a sense of self-esteem.

The United Bermuda Party has called for the completion of a community youth center in St. David's, and we support creating professionally staffed and funded youth centers in key neighborhoods throughout the island to provide attractive developmental activities to our young people, particularly young men at risk. We also call for increased support and funding of community-based mentoring programs, such as YouthNet and De Boys Day Out Club.

Unfortunately, bad behavior grabs attention, while most of our young people are growing up out of the limelight, enjoying academic success, developing personal talents and thriving in healthy relationships with families and friends. Government leaders must encourage these achievers to grow into confident and contributing adults.

The United Bermuda Party believes that an education system that works for our children is the single most important contribution government can make to their development. And Bermuda's schools should provide alternative opportunities for success beyond academics. That's why we call for extending the school day in order to integrate music, art, drama, sports and community service more fully into the curriculum.

The Next United Bermuda Party Government: Based on Mutual Respect, Integrity, Fairness and Openness

Mr. Speaker,

The record of the Smith Government since 1998 is absolute proof that spending money, by itself, does not solve problems. In the New Bermuda, social dysfunction is on the rise, our community is more divided than ever and there is a crisis of confidence in Bermuda's leadership.

Today's United Bermuda Party believes the PLP and the Smith Government got the fundamentals of governing wrong from the very beginning. Maybe their New Bermuda is a different world. But in the real world where the rest of us live, people want action, not talk. They want things to get better, not worse, and they want value, not waste, for their tax dollars. In the real world, people want leaders to lead by example, guided by principles of fairness, openness and integrity. They want leaders to earn respect, not demand it.

The new United Bermuda Party stands for good government based on core values of mutual respect, fairness, integrity and openness. To embed these core values in public life and renew our people's faith in government, the next United Bermuda Party government will:

Guarantee public access to public information through a Freedom of Information Act,

Uphold the right of people to speak out without fear through a Whistleblower's Act,

Give the public greater access to Parliamentary business by opening committee meetings to the public,

Adopt a Code of Conduct for all Parliamentary members,

Establish bi-partisan Parliamentary committees on issues of broad concern to the community,

Encourage full participation in elections through a system of absentee ballots, and

Guarantee equal access to government contracts by requiring open tendering in every department.

The Next United Bermuda Party Government: One Bermuda in the 21st Century

Mr. Speaker,

Our vision of the future is clear and focused. Planning together with all the people of Bermuda, the new United Bermuda Party will implement progressive social and economic policies that benefit everyone, not just friends, relatives and political sympathizers. Working together with all the people of Bermuda, in an open atmosphere of mutual respect, honesty and shared values, the United Bermuda Party will steer our country to achieve its true potential. United, we can ensure each Bermudian enjoys full participation in the mainstream of Bermudian life and provide our country with a rock-solid future.

On November 9, 1998, we got a change in government, but we didn't get progress.

The new United Bermuda Party understands that in the last election, many people voted with their hearts, and their hearts told them that the color of Bermuda's government was important. They were hopeful that life in Bermuda would improve just because a black political party finally controlled the government.

Now we know that the color of Bermuda's government doesn't guarantee fairness, honesty or transparency. It doesn't guarantee a healthy, diversified economy that keeps us steady in an uncertain world. Nor does it guarantee an improvement in personal well-being, affordable housing, security and safety, educating our children or healthcare.

The new United Bermuda Party believes that in order to flourish, Bermuda must have good government whose members never lose their commitment to serving the public rather than themselves.

No government can legislate the way people think or feel, but it must lead by example. The United Bermuda Party believes that a government whose members reflect the diverse mix of people in today's Bermuda stands the best chance of developing programs and policies that address everyone's needs, hopes and dreams.

Today's United Bermuda Party is a political melting pot of Bermudians with a common purpose: to see our country and every person in it prosper. Today, the new United Bermuda Party team is working to ensure that everyone participates fully in the social and economic mainstream of Bermuda.

The new United Bermuda Party believes in this vision, and we will make it a reality. This time, it will be for everyone.