Bermuda may be enjoying an economic boom in 2006, but an Opposition Senator predicted yesterday that 2007 will bring a downturn.

Senator E.T. (Bob) Richards said in start of the Budget Debate in the Senate he disagreed with Finance Minister Paula Cox?s version of global economic trends.

?The favourable headline economic numbers remain intact, but beneath the surface things are starting to unravel,? Sen. Richards said. ?Perhaps everyone just accepts the Ministry of Finance?s outlook as gospel, or perhaps others don?t care, but I can assure you Mr. President, that it is vital to determine whether the tide is rising or falling.

?Bermuda, as a dot in a very large pond, can only make adjustments to cope with that tide, we cannot hope to alter the tide itself.?

Sen. Richards said the price of oil and steel ? raw materials used directly or indirectly every day ? had rocketed up by 81 percent and 166 percent respectively in the last year.

This led to manufacturers feeling a squeeze in profits, he said, and when added to a US Federal Reserve increase in interest rates, was a brew for economic bad news.

?Beware of 2007,? he said. ?Slow or negative growth in the US can never be good for Bermuda, and this is the likely environment in 2007.?

He said the gap between the rich and poor was increasing not decreasing while Government?s efforts to address this problem was too little and too late and Minister Cox had a naive and rosy economic forecast.

Gross Domestic Product (GDP) grew in real terms of 1.6 percent during the last reported quarter, he said. However, inputs of hotels and restaurants into the Island?s economy had almost been overtaken by the increase in taxes and duties, which drained GDP growth.

?Put another way, the Government has become so expensive, so bloated, that virtually all that Bermuda earns from tourism is used up to sustain it,? he said.

The cost of shelter, or renting a home in Bermuda, had increased by 92.5 percent between 1993 and 2004 or 8.4 percent per year, he said.

?That?s over three-and-one-quarter times the overall rate of inflation!? he said. ?This date shows trends that go back 11 years; its not a recent development, yet its only now, after seven years in power; this PLP Government is only now cranking up the machinery to build affordable houses to meet this need. Up to now they have been, like that pathetic Roman emperor in history, fiddling away while Rome was burning.?

Sen. Richards said that between 1999 and 2005, 1,498 jobs were lost by Bermudians, 2,161 jobs were gained by Non-Bermudians and 2,303 jobs were gained by Spouses of Bermudians.

?The Bermudian economy is creating jobs for foreigners at the expense of Bermudians,? he said.

He accused Minister Cox of sleight of hand when she tried to put a positive spin on the ?disturbing? employment trend, when she said the decline was due to a shrinking workforce.

?Census data refute such a fiction,? he said. ?The overheating of the construction sector or any sector for that matter, is an inherent responsibility of the Bermuda Government.?

Government appeared ?powerless? to control the runaway train of the construction industry, he said.

And with $67 million to be spent on housing in the next two years, he said, it was ironic Government would build homes precisely when the construction industry was most heated.

?So in their desperate rush to build homes before the next election the Government will exacerbate the overheating in the construction sector,? he said.

None of the condos springing up all round the Island were affordable, he added.

?The proliferation of such condos has been blamed, in the other place, on international business,? he said. ?But what expatriate worker in international business is going to buy a $1 million condo if he/she can only stay here for six years??

He said Premier Alex Scott spun a ?litany of deceptions? in an attempt to cover up the ?total incompetence? f the entire Bermuda Homes for People plan and called it a ?pathetic embarrassment?.

?The PLP?s efforts to provide affordable housing shows their cup is brimming with incompetence,? Sen. Richards said.