new legislation is intended to make mandatory, a Senator said on Wednesday.

Sen. Joe Johnson (Ind.) made his comment during debate on the Government Loans Amendment Act 1993.

The Act, among several required to implement Government's recent budget, creates a "sinking fund'' to repay Government borrowing. It requires Government to pay into the fund each year an amount equal to 2.5 percent of the public debt, not counting loan guarantees like the ones Government issues to the Bermuda Housing Corporation.

The Act was passed unanimously on Wednesday, along with The Government Fees Amendment Regulations 1993 and three other laws intended to help implement the budget: the Trust Companies Amendment Act 1993; the Customs Tariff Amendment Act 1993; and the Stamp Duties Amendment Act 1993.

In moving the Government Loans Amendment Act, Government Sen. Wendell Hollis said it was proof of Government's resolve to repay borrowing. The compulsory sinking fund would allow a Finance Minister to approach an international bank and say: "We have already funded the loan before we have obtained the loan,'' he said.

But Sen. Johnson said he was concerned about "loose language'' in the Act.

Since every Government loan is guaranteed by the Government, the wording could be "helpful'' to a Government that wanted to avoid paying the 2.5 percent, he said.

Sen. Hollis said he could not disagree "that someone could come to that conclusion,'' but the intent of the legislation was clear.

Sen. Johnson noted "it would be up to future legislatures to assure it would be used for the purpose it was established,'' and it was future legislatures he was concerned about.

Senate Opposition leader Sen. Alex Scott said the Government tries to say it does not borrow, and the Government Fees Amendment Act proves it does.

"This Government has a deficit which in actual fact it does not publicise,'' he said.

But Government Sen. the Hon. Maxwell Burgess said the budget statement makes it clear Government has never denied borrowing. "Our policy is not to borrow like drunken sailors,'' he said.

And Sen. Hollis said Sen. Scott's comments showed he did not understand the difference between current account expenditures, through which funds are consumed in salaries and other items, and capital account expenditures, in which funds are converted into valuable assets like buildings.

While the Government has a debt incurred through borrowing to finance capital projects, it balances its current accounts or shows a surplus each year, Sen.

Hollis said. In that regard, "there is no country in the world that has a similar economic position to us.'' The Government Fees Amendment Regulations 1993 changes the formula by which boat licence fees are calculated, reduces the licence fees non-residents pay to purchase a condominium to 15 percent from 20 percent of the condo's value, and adds fishermen and farmers to the types of workers allowed to use their vehicles on Sunday without paying an extra fee.

Sen. Hollis said the old boat licence fee system based on displacement of water was seen as onerous to owners of large yachts and the change was due to a lobby by boat owners. Under the new regulation, there would be a flat $24 fee, plus $2 for each foot of boat length over 12 feet, 11 inches.

Under the new system, the owner of a typical 20-foot boat would pay a $40 licence fee, he said.

But Sen. Scott was critical of the change, charging that it brought the fee paid by the owner of a small dinghy "within a few dollars from paying the same tax as the yachtsman.'' Funds that were needed for education and hospital beds "have gone out to the boat people,'' he said.

Sen. Hollis said he was "somewhat astounded'' Sen. Scott would criticise Government for listening to the boat lobby. "I thought the PLP always indicated they were a responding Government,'' he said. "What we have done here is listen to a substantial portion of the population.'' The Trust Companies Amendment Act increases the trust company licence fee to $10,000 from $1,000, allows private trust companies to use the words "trust'' and "trustees'' as long as they also use the word "private,'' and effectively creates a register of trust companies, Sen. Hollis said.

Sen. Scott said some trust company interests who contacted him were "thunderstruck'' at the tenfold fee increase, which he suggested was "a sop to the banks.'' But Sen. Johnson, who disclosed he is a bank director, noted each of the banks has a trust company.