Government has "bet the farm" on a short recession and raided the coffers that could be needed to deal with a lengthier downturn, Shadow Finance Minister Bob Richards said yesterday.

Responding to Finance Minister Paula Cox's Budget statement, the United Bermuda Party MP said the decision to draw money from the Sinking Fund to pay off interest on debt was "disturbing".

Ms Cox said yesterday that there was "a spark of hope that the financial clouds will ease over the next 18 months" and that the Ministry of Finance anticipates a "slow recovery" in 2010.

But Mr. Richards said: "She says the average time for a recession is 18 months. I don't know where she's been living, but this is no ordinary recession — this is the worst we've seen since the Great Depression in the 1930s.

"All the latest statistics show the situation is worsening and the downturn is accelerating. We're not even near the bottom yet. So I think the Minister is way off the mark.

"She has bet the farm on an 18-month recession and used up a whole lot of resources."

Mr. Richards objected to the planned withdrawal of some $20 million from the Sinking Fund — established 16 years ago to pay off the principal of long-term debt. An additional $21 million was drawn from the Confiscated Assets Fund to fund various social programmes.

"The debt does not include the money they are taking from those two funds," Mr. Richards said. "So this is like an accounting sleight of hand. I believe they are signalling a whole different approach to Budget management and it's quite disturbing.

"The revised revenues for this financial year are lower. Normally they are much higher because of the bonanza Government has enjoyed with payroll taxes over the last few years.

"That's an indication that the halcyon days of Government being bailed out by higher payroll tax revenues are over."

Mr. Richards said he supported Government's counter-cyclical spending plans to bolster the economy in difficult times, particularly in terms of supporting the needy and social rehabilitation.

"What I object to is the 22 percent increase in spending on consultants," Mr. Richards said. "That's what I call the reverse stimulus part of the Budget. Most of these consultants are from the United States, so the money goes outside the country instead of into the Bermuda economy."

The UBP would have placed more emphasis on saving and creating jobs in the private sector, Mr. Richards added, and would have imposed a Civil Service hiring freeze.

"I would have spent a considerable amount on trying to make sure that the international business sector that has worked so well for us continues to work well," he said. "And I would have spent whatever it takes to make sure the decision-makers in Washington appreciate what Bermuda does for the US and to differentiate us from the numerous offshore tax havens."

Mr. Richards said the Police should have been allocated more money, rather than have their budget cut, as crime traditionally rises in recessionary times.