Minister Grant Gibbons warned yesterday.

And he singled out a 50 percent increase in spending on building projects -- up to more than $90 million -- as well as $28 million in new borrowing as danger signals for the future.

Dr. Gibbons added that complex new deals on both payroll tax and land tax -- with increases logged, but new tax breaks introduced, would have to be examined carefully for their true impact on business.

But he said: "It seems as though they are giving something with one hand and taking it away with another.

"We're going to have to run the numbers and employers will have to run the numbers to see if this is a practical gain or illusory -- just smoke and mirrors.'' Dr. Gibbons added: "From our perspective, there was really no clear or constant theme in the Budget. There was a lot of smoke and mirrors.

"Another very ominous signal is that they are clearing the decks for a lot of heavy capital spending -- hence a big increase in the debt ceiling to $250 million.

"They are now going to have to change the law to do that -- debt is set at $185m total at the moment.'' Dr. Gibbons said: "We are already a very expensive place, as the Minister admitted, to do business.

"When we add up the changes in the payroll tax and the increases in company fees and all the rest of it, it's adding more to the overall expense of doing business in Bermuda -- and in the long-term, that's a worrying thing.'' And Dr. Gibbons predicted: "The Minister of Finance said this is the real world and someone has to pay.

"When all is said and done, we will find it will be both the individual and the business community which ends up paying -- that's what concerns us.'' Dr. Gibbons added that last year's Budget was later followed by millions in Supplementary Estimates to make up shortfalls.

He said: "That was very much in our minds when we heard what went on during the Budget speech.

"We might not have heard the end of it -- we see the same pattern as last year -- another round of supplementaries.'' And he added that Government -- despite a $2.43 injection to the Tourism Ministry -- had failed to come up with a coherent strategy to boost the industry.

Dr. Gibbons said: "There is really no clear vision as to how they're going to deal with tourism.

"We have dollars being thrown at marketing, but there was no consistent sense of how they will deal with it, which is worrying, given a four percent drop in air arrivals in 1999.'' But he admitted that the removal of the "tax cliff'' -- where payroll tax payments to Government rocket over a total wages bill of $100,000 -- was a reasonable initiative.

Dr. Gibbons said: "That's one of the initiatives I thought was a good thing -- as long as everybody can understand it, which seems to be very much in question at the moment.''