Government is blowing ten percent of this year's billion dollar Budget on foreign consultants while saddling future generations with debt, says United Bermuda Party Finance spokesman Bob Richards.

And he said Government had failed to heed the obvious warnings of the financial meltdown and was misreading it now it was here.

With the world experiencing the worst downturn since the 1930s, he said Finance Minister Paula Cox was again gambling that it would only last 18 months.

He said: "18 months is not realistic, it's a prayer rather than a forecast."

He said Finance Minister Paula Cox had planned to:

¦ almost double the Country's debt ceiling, now fixed at ten percent of GDP, to $1 billion

¦ run the national debt to $689 million the highest ever

¦ duck out of making the annual payment into the national debt sinking fund (money set aside to pay off national debt) as required by law

¦ raid the sinking fund and use it instead for current account operations

¦ run a deficit on the current account to more than $40 million, after interest payments and the replenishment of the sinking fund.

Mr. Richards said Government was right not to raise taxes but now spending needed to be directed at those out of work or seniors on fixed incomes.

But instead nearly $100 million was being sent overseas as Government increased spending on consultants by 22 percent.

"It is a scandal, accounting for ten percent of this billion dollar budget."

He said those consultants were Bermuda's very own "reverse stimulus package" wherein Bermudian taxpayers help stimulate the US economy by providing employment for American consultants.

Advocating targeted spending to keep construction flowing, Mr. Richards said money needed to be cut in other areas such as Government travel and perks.

He called for a freeze in new hiring in the civil service after complaining that the Progressive Labour Party had increased employment in that sector by 500 jobs in ten years.

And the four percent cut in the Police budget came under fire from the United Bermuda Party who said Bermuda was in the grip of a crime wave and yet Government was planning to spend $9 million less than was spent in 2007/2008.

And there was derision that Government had failed in its promise to cut spending by 10.5 percent across all departments.

"Instead of being a directive it appears to have been a polite request, and many departments have just as politely said: 'No, thank you'. The Minister has failed to put her foot down."

Education was getting short shrift said the Opposition despite promises to train teachers the sum put aside for that worked out a paltry $100 per teacher.

Concern was also raised about public private partnerships (PPP) the method by which Government plans to rebuild the KEMH and the Causeway.

The schemes often involve a private company building something and leasing it back to Government.

Mr. Richards said PPPs are a form of off-balance sheet financing, that is a PPP enables all or part of the debt to finance a project to not appear as part of the government's debt.

"So it is a way for some governments to off-load public debt to private entities. But there is no such thing as a free lunch."

He said the private partner will not likely have as high a credit rating as the Bermuda Government, therefore the financing is bound to be more expensive than if Government borrowed the money itself so PPPs add to the cost.

Turning to what the UBP would do he said a rescue plan was needed for hotels.

"We would move immediately to grant hotels and their employees payroll tax relief and eliminate the hotel occupancy tax to reduce the cost of a Bermuda vacation."

He said Tourism had done a poor job promoting the Island and that a 2008 survey revealed how just 10 percent of potential customers were aware of Bermuda as a vacation destination.

With US legislators having the knives out for Bermuda he said hiring a PR firm with good connections with the ruling Democratic party would be money well spent.

And he said Government also needed to smooth relations at home with international business which had felt under the cosh from work permit term limits as well as threats to curb cars and encourage race quotas in the workplace.

Mr. Richards also advocated the creation of a Contractor General, like the ones used in other Commonwealth countries, to oversee the tendering process and monitor all capital projects to ensure rules are strictly enforced and unfair practice is rooted out.

"While a Contractor General might be an additional cost to Government," said Mr. Richards, "his or her activities could save taxpayers millions going forward."

l Full text of Opposition's reply to the budget starts on page 4