The following is the full text of the Reply to the Budget Statement, which was delivered in the House of Assembly yesterday by Shadow Minister of Finance Eugene Cox.

"Nothing is impossible for a government that wants the good of the people'' -- Etienne Cabet Mr. Speaker, the Government's Budget this year has been termed "a sweetheart budget'' and we know the reason why -- an election looms on the horizon.

Within the next 18 months, the people will be asked to choose a new Government that will lead them into the next millennium. The choice is simple -- the Progressive Labour Party intends to be that Government.

Mr. Speaker, the Budget Statement promises much for the people, you might even call it a people-oriented Statement. Much of it has been copied from the Progressive Labour Party's public pronouncements, past Budget Replies, Replies to the Throne Speeches, past PLP platforms and Shadow Ministerial Statements.

Mr. Speaker, how can we disagree with ideas that mirror our own? How can we disown our own ideas? How can we disagree with Government's new-found concern for strengthening the family unit? How can we disagree with the introduction of free bus and ferry rides for senior citizens and for free transport for our little children, or disagree with increased resources for the Auditor? We have no choice Mr. Speaker, because the UBP Government has shown in the best possible way -- imitation being the most sincere form of flattery -- that it recognises that the Progressive Labour Party not only has good ideas, but ideas that it has chosen to adopt. Ideas that befit a future Government.

Mr. Speaker, the Budget Statement promises a comprehensive tax review. This has been a recurring PLP theme over the last decade. Tax incentives for businesses which employ and provide meaningful training of Bermudians is another PLP initiative. The PLP have also recommended the formation of a separate Ministry for International Business -- this idea has been tacitly endorsed by the UBP Government with their announcement that three new positions in the Ministry of Finance are to be created to deal specifically with the International Business sector.

Mr. Speaker, proposals mooted by our Shadow Minister of Tourism have now also been belatedly adopted by the UBP Government, another firm indication that the Progressive Labour Party has many solid proposals beneficial to Bermuda.

Though many PLP proposals have been adopted piecemeal, and their effectiveness diluted.

Mr. Speaker, I could continue to highlight these aspects of the UBP Budget Statement which reflect policies and programmes enunciated by us the Progressive Labour Party -- but I will not; for it is only by the election of a PLP Government that Bermuda will reap the full benefit of these progressive policies and programmes.

Mr. Speaker, a Government ought to be consistent in its philosophy. In recent months, the UBP Government has lost the confidence of the people generally, and the business sector by its handling of the franchise policy issue, the lack of consultation at the outset with the proposed Proceeds of Crime Bill, its negotiations with the taxi industry and even more recently, through its method of introducing competition in the telecommunications industry.

This, Mr. Speaker, dramatically underscores our contention that now is the time for the PLP to step forward and lead this country, we are ready, willing and able to form the next Government.

ECONOMIC EMPOWERMENT Mr. Speaker, the priorities we give to allocating financial resources will impact on Bermuda's future in both the short and long-term. These are not trifling issues.

Mr. Speaker, the PLP recognises the significant role of the budget in promoting the economic empowerment of all people in Bermuda, irrespective of race, gender and socio-economic status. We can and should all win, big business-small business, black-white, young-old, male-female, rich-poor.

We recognise the need to have orderly planned and sustainable development and the importance of safeguarding our people and our environment for those who come behind us. We have a powerful recognition of the need to protect the human rights of all as an indefensible part of the rights of citizenship and to protect those who are less strong against attacks and abuses, whether due to violence, discrimination or the breakdown of law and order.

We have a powerful recognition of the need to protect the right to healthcare, housing and rehabilitation and counselling programmes.

We have a powerful recognition of the need to provide adequate education and information, library and research facilities, and youth programmes. Further, we need to celebrate our diversity, as well as our culture and heritage.

THE NEEDS OF THE PEOPLE Mr. Speaker, as we said in last year's Budget Reply, "budgets must be viewed not in isolation, but in the context of the `big picture'. Budgets are not simply about technical bars and charts. Budgets are real and must be aimed at serving the needs of real people. Mr. Speaker, the people need a budget to properly equip and tool the Bermuda economy, so that it is revitalised and renewed to the point where we are capable of helping people to realise their dreams into the 21st Century''. This year the Hon. Finance Minister states that the Budget is not about numbers, but people. Finally, the UBP Government has recognised in part what this process is really all about.

Mr. Speaker, governments must be inclusive. There are many interests to balance -- sometimes competing interests. Mr., Mrs. and Ms Bermuda have real concerns. They feel that their interests are not being sufficiently taken into account and often they feel that they are left out of the information loop with regard to the decisions taken.

The people want less style -- more substance.

Mr. Speaker, when you consider the comments of various groups throughout the country, the fallout suggests that the 1997/98 Budget is perceived to establish a two-tiered form of economic justice -- one for the rich and the other for ordinary people. Yet rumblings from the international business sector indicate that they consider that the UBP Government is not being sensitive to their needs and interests. A clear indication of this has been the fall-out from the proposed Proceeds of Crime Bill. They believe that their views are not being canvassed prior to Government making decisions which will have a far-reaching impact on the overall growth of the international business sector.

Mr. Speaker, we need to consider the `big picture'. We need to consider the interests of the whole community and we need to undertake a thorough `needs analysis', so we can better identify those unmet needs. This is the role of a responsible government. A government that will put in place programmes, policies, and legislation to address the community's needs.

Mr. Speaker, we know only too well that unless both pillars of our economy are working at optimal levels, there will be human casualties. The workers in the hospitality industry know this. The Chairman and CEO of the Bank of Bermuda in the Bank's latest shareholder's letter have commented that Bermuda risks higher unemployment if it fails to come to grips with tourism's "shrinking value'' and that the Island must either find a tourism solution or accept the decline of this pillar of the economy. If irreversible, then the Island must not only find an alternative revenue earner but also refocus tourism on a smaller but more efficient scale -- before unemployment becomes "a major social and political issue''.

Mr. Speaker, there are two major concerns. One is the fear that we seem to be losing control of the forces that impact on our lives. The other is the sense that from family to neighbourhood to the entire community, the moral fibre of our community is unravelling. The glue is coming unstuck around us.

Mr. Speaker, the solution does not lie in taxing the rich to pay for the welfare programmes of the more disadvantaged. Yet, good government must assure all citizens a decent level of income, housing, education and health-care on the grounds that those who are crushed by economic necessity are not truly free to exercise choice in other areas. The PLP is committed not just to economic justice but to social justice. It is absolutely essential for development that the people of the community be properly fed and housed, and that they have suitable opportunities for education. The community cannot reach its goals without these things.

FUTURE NEEDS Mr. Speaker, we are in a climate of distrust and backlash against the system.

The anger in Bermuda is real, and in recent months the target for it has been our foreign visitors. Hospitality workers that were previously able to find employment in the off season are out of work. Local retailers are crying foul but have been somewhat successful in their efforts to persuade the Government to provide some customs duty relief on tourist-related items. Average spending by air and cruise ship visitors continues to fall. Major hotels have recorded at least six years of losses and claim that the high cost of labour is to blame.

Mr. Speaker, this is the backdrop against which we must examine the needs for the future of Bermuda.

TOURISM There is a greater awareness that tourism can and should be managed. Tourism industry shows significant declines.

Mr. Speaker, the Progressive Labour Party is committed to restoring Bermuda's golden age of tourism, both through the constructive proposals it continues to offer in successive Parliamentary Budget debates and other forums, but also when it forms the Government of Bermuda.

The challenge is great, but we believe that the tremendous natural tourism resources of Bermuda combined with the talents of its people, if properly marshalled and channelled, can restore the lustre to Bermuda's most vital industry.

Mr. Speaker, it is tourism that provides the greatest number of employment opportunities in Bermuda, both directly and indirectly. It is tourism, even in its current debilitated state that provides the greatest economic impact on the broad spectrum of Bermudian households.

Mr. Speaker, the Government speaks in terms of aggregates, however, we must be very careful when we interpret statistical data because aggregates cannot tell the whole story. For instance, nowhere in this budget do we see mention of the need to address the significant income disparity between those employed in the international business sector and the hospitality sectors of the community.

Apart from the public service, these are the two main industries. In fact, the hospitality sector (i.e. the restaurateurs, hoteliers, wholesalers and retailers) employs the predominant number of Bermudians. If we want to seriously review what is happening from an income generation standpoint we must look at the disparity that exist between these twin pillars of the community. It is this income disparity which has generated recessionary trends and anaemic growth within the tourism related sectors of the community.

Exhibit A clearly demonstrates the inequality between the average income per capita by sector in the international business and hospitality industries.

Mr. Speaker, the UBP Government has stated that GDP growth has been consistent and that Bermuda compares favourably with the United States and the G7 countries. We know that GDP in the United States has been the highest since their independence in 1776. So there should be few economic troubles in the US today, right? Wrong. They face some of the worst economic dilemmas of their history. So let us not be too impressed by the UBP government when they use GDP growth to support what they consider to be competent stewardship of the country.

Mr. Speaker, Bermuda's tourism industry, despite occasional ebb and flow, has now seen overall sixteen years of erosion and decline in the bedrock of the industry-hotel visitor arrivals. Despite the expenditure of over half of the $30 million allocated last year to marketing and promotion of Bermuda's tourism product, focusing on the Let Yourself Go campaign, there was only a meagre eight tenths of one percent increase in those visitor arrivals. That, compared with a previous lacklustre year for arrivals, declines in length of stay and room occupancy nights, further exacerbated the situation.

Mr. Speaker, the Government continues to hold out the increases in cruise ship visitors as a significant plus for the industry, when clearly historically this segment of the visitor population has accounted for approximately eight percent of total expenditure by overseas visitors.

Mr. Speaker, clearly, it is obvious where Bermuda must concentrate its efforts from a marketing perspective, if we are to see any significant impact on gross domestic product (GDP). The estimated expenditure of vacation and business visitors plummeted to a three-year low in 1995 of $479.9 million for all visitors. Based on the first three quarters of 1996, which show numbers fairly consistent with those of the previous year, one must be concerned if we are truly looking to get more `bang for our buck' from a tourism marketing perspective.

Mr. Speaker, Government's 1997/98 Budget fails to give the decisive and innovative boost to the tourism industry -- from the hotel sector to the retail sector -- required, if we are to counteract the complacency and neglect that have resulted from years of UBP stewardship.

Mr. Speaker, while the broadening of concessions on import duties for hotel refurbishing and construction materials that the PLP has consistently called for is long overdue, as are some of the reliefs on duties on some of the merchandise purchased by our visitors, these are still very small steps compared to the broad-based action that is required.