The Ministry of Finance?s overall budget will increase by $2.3 million to $84.7 million, largely reflecting an inflation level adjustment compared to the previous year and the provision of additional grant funding, said Minister of Finance Paula Cox.

Ms Cox said during her Budget speech that within that overall budget, the Ministry of Finance?s headquarters? allocation of $4.1 million has a provision for ongoing economic diplomacy in defence of Bermuda?s broad economic interests in the global economic arena.

?There is also the vital need to sustain our efforts at economic diplomacy? Ms Cox said. ?Bermuda?s economic interests continue to be challenged on a number of international fronts.

?Government has been proactive in establishing a network of advisors in key locations in the United States and the United Kingdom. These relationships, among others, have helped to ensure that Bermuda maintains its international reputation as a vibrant, well-regulated and stable financial jurisdiction.

?We will continue to underscore these efforts by strengthening mutually beneficial partnerships, both locally and internationally.?

The Post Office will get an allocation of $11.1 million, while Customs will get $11.7 million and the Registrar of Companies will get $4.9 million.

Also the Ministry of Finance will lose $3.5 million to the Bermuda Monetary Authority. Ms Cox said that the extraordinary transfer of $3.5 million to the BMA represented license fees from banks and deposit companies that are deposited into the Consolidated Fund in accordance with the Banks and Deposit Companies (Fees) Act 1975.

?In order to position the Bermuda Monetary Authority on a sounder, more independent footing, Government will amend the Banks and Deposit Companies (Fees) Act 1975 during this Budget Session so that the license fees established under the act are paid directly to the authority. The first such direct payment will accrue in 2005,? she said.

?For 2004, Government will transfer the proceeds of the license fees that are due January 31 of each year by way of a one-off contribution to the BMA equal to the amount previously collected by Government.?

Ms Cox said the decision on this issue was reached in December 2003 following consultations between the BMA and the Ministry of Finance on the likely implications of the International Monetary Fund?s March 2003 review of Bermuda?s supervisory and regulatory framework for the financial services sector.

And she said that the transfer of $3.5 million will occur after Government presents a supplementary estimate for this amount to this House.