Not since Dr. David Saul's Budget of 1991 has a Budget Statement caused the kind of furore and angst that Finance Minister Paula Cox's has with this year's.

And yet, for those with long memories, the two Budgets are markedly different. Dr. Saul's Budget took place before a recession in order to prepare the Island and to be sure that the Government had the wherewithal to get through the downturn. It restrained spending and froze hiring. It ensured that the current account never went into deficit and that borrowing was used to finance capital projects which improved the infrastructure and kept people employed. This is not an apologia for Dr. Saul. It can be argued that the tax increases were too steep and prolonged the recession. So there were lessons, which have apparently gone unlearned.

Ms Cox's Budget will not balance and is founded on overly optimistic projections. Taxes are now belatedly being raised. Most importantly, spending is only now being restrained and by too little. Government debt has ballooned from $345 million to $973 million in four years. Hallmarks of Bermuda's prudence such as borrowing not exceeding ten percent of GDP and balanced current account budgets are things of the past.

But there is no doubt that the changes to the payroll tax have caused the most angst.

The increase in payroll tax – which increased overall by 14 percent, not seven as was incorrectly stated here on Monday, will cause hardship for those ordinary workers who have jobs and may turn out to be revenue neutral as cash-strapped employers shed jobs rather than pay the increased tax. Certainly, few will be hiring. That's the lesson that was not learned.

The second, more complex issue, concerns the lifting of the cap on payroll tax from $350,000 to $750,000. On the face of it, this may seem reasonable and fair. After all, shouldn't people earning these kinds of salaries pay their fair share? Perhaps. But there is another side to the argument, which is stated in detail in today's Business section. Many of this very small number of people are here because Bermuda does not have income tax.

The increase in the payroll tax cap will make them think twice about being here, and with other concerns about Bermuda already high, this could prove to be a tipping point for many international companies with physical presences in Bermuda.

The consequences of this are serious, and are worth spelling out. International companies are directly responsible for one quarter of Bermuda's gross domestic product, and indirectly create much more than that. There were 4,433 jobs in international business in 2009, or roughly 11 percent of the total. But thousands more jobs depend on it, as do incomes for everyone from landlords to supermarket cashiers.

So it is vitally important that when there is unease in this sector of the economy – especially in a recession – that the concerns of the sector are heard. When this newspaper and others warn of these risks, they are accused of scaremongering, but this is reality.

And it is not too late. The Budget is being debated now. It has not been passed. It is important that all 36 MPs in the House of Assembly recognise their obligations to their constituents and ensure they are as knowledgeable on the issues as they can be, so that they will make informed decisions on how they will vote on the Budget.