renovation materials yesterday -- but not without debate on whether the UBP or PLP can manage the Island's economy better.

The Customs break allows hotels and guest houses to pay five percent duty on material imported for renovation and refurbishment.

The goal, Parliamentary Secretary for Finance Sen. Wendell Hollis (UBP) said, was to encourage properties to upgrade and help the construction industry. The incentive, he said, was working and should be extended for another year.

Opposition Senate Leader Sen. Alex Scott said the Progressive Labour Party supported the measure.

He said it was initially introduced in response to "vociferous pressure'' from the Shadow Tourism Minister "to do these sorts of things -- to provide tax relief to the hotels''.

The Government "lags behind'' in providing direction and guidance through tax policy, which he described as "higgledy-piggledy''.

It had heaped tax increases on the hotel and tourist industry through increases on land, wines and spirits and fuel, and airport and cruise ship passenger taxes.

"You do not encourage trade by taxing that industry unnecessarily,'' Sen.

Scott said. It was clear Government did not really see the recession coming, as it claimed to have done.

Hotels must be "acutely aware'' of their responsibilities and pass the benefits of this Customs break on to their workers. "They are not to be pocketed by the hotel owner or developer,'' he said.

The Customs rebate, he said, came "out of the pockets of Mr. and Mrs.

Taxpayer.'' The incentives for the hotels should be permanent and more extensive.

Senate Leader the Hon. Michael Winfield , managing director of Cambridge Beaches, said the Opposition "failed to recognise what really makes this industry work''.

After hearing Sen. Scott's presentation of the Opposition's economic views, he said, the public should be "very perturbed at the possibility that they ever get control'' of the economy.

Hotels throughout the Island were taking advantage of the Customs break, and there were other incentive programmes for hotels as well -- such as the annual Department of Tourism inspection programme, and the winter employment tax break.

Sen. Scott was "somewhat away from reality'' when he criticised the 1990 cruise ship passenger tax increases. Passenger loads were "last year in excess of 90 percent. It's quite clear that the increase in head tax had little effect on that.'' Sen. Joe Johnson (Ind.) said he had "absolutely no qualms'' about the Customs break. "Government should be congratulated for this effort to make the hotel industry more competitive.'' Sen. Ira Philip (PLP) said hotel renovations would add to the value of the hotel properties. "It wouldn't surprise me if a lot of the hotel owners didn't go into the business for what they get on a daily basis, but capital gains from resale of the properties.

"Capital gains are a major reason why many of the hoteliers are operating -- without consideration for the workers who help keep this industry going.'' Sen. Jerome Dill (UBP) disagreed with Sen. Scott's description of Government tax policy as "higgledy-piggledy''.

"Government's overall tax policy is clear and it's simply this: All those in Bermuda with the ability to pay should pay. It really is as simple as that.'' Sen. Scott's recommendation of a more permanent and extensive relief "when every working man and woman in this country'' continues to pay tax seemed "absolutely extraordinary''.

If the UBP really saw a recession coming, Sen. Trevor Woolridge (PLP) asked, why didn't it stimulate the economy? "We had very poor leadership,'' he said.

The Customs break was "the right thing to do'' but the Finance Minister "had to be dragged kicking and screaming'' to do it. "It's time for the Government of the day to do something right for the first time for the people.

"...We will soon be through doing that when we gain at the next election the control of the economy. Bermuda will be able to rest more easily.'' Sen. Maxwell Burgess (UBP) said the PLP should make up its mind: It claimed it caused Government to enact this Customs break -- and then said the measure took money from the pockets "of the poor working people''.

It reflected "the PLP's inability to understand finance''. But the concept was simply to encourage people to invest in something they would not otherwise have invested in.

Youth and Sports Minister the Hon. Pamela Gordon agreed that some Caribbean islands had higher tourist numbers. "But it is through severe price-cutting that they are achieving these numbers,'' she said. Bermuda couldn't do the same thing and still pay its workers.

Sen. Wendell Hollis (UBP) said the incentive for hotels to renovate would disappear if the measure was made more permanent as Sen. Scott suggested -- in the same way that a "carrot and stick'' approach doesn't work if carrots are always available on demand. "If you take away the temporary nature of it, the incentive would also be gone.'' Senators generous with applause -- see Page 6.