once.

Finance Minister the Hon. David Saul delivered the long-awaited news in his Budget yesterday.

The pay hike -- which has been sharply criticised in Bermuda -- will be phased in over two years, Dr. Saul said. And instead of being retroactive to 1994, the first hike will not take effect until April 1, 1995, with the second following a year later.

The two increases will bring the basic salary for MPs to $30,700, and for Senators to $20,500.

But from then on, Parliamentary pay hikes will be tied to increases in the Consumer Price Index, as a committee chaired by the Hon. Clarence Terceira recommended last year.

Mr. Robert Rego, president of the Chamber of Commerce said the pay hike -- whether spread over one year or two -- is "just sending the wrong message''.

The Chamber had expected "the Minister was going to take something out of it'', he said.

"A figure of 27.9 percent is fair,'' Dr. Saul said at a news conference after delivering his Budget Speech in the House of Assembly. "But retroactive -- absolutely not. In one lump sum -- definitely no.'' The large increase approved by MPs in July was to make up for hikes in the Consumer Price Index since Parliamentarians last received an increase in 1987.

In accepting the majority report, the House rejected two committee minority reports that recommended pay hikes of 15.9 percent and up to ten percent respectively.

Although the pay hike was approved by the House in a 22-11 vote, Dr. Saul soon let it be known that at 27.9 percent increase was not "etched in stone''. He would have to bring legislation to the House before any pay hike was approved.

Meanwhile, the raise was harshly criticised around the community. Business and labour leaders said other workers had not been able to make up the pay they lost during the recession, so MPs should not, either. And they said the Parliamentary pay would serve as "a yardstick'' for other wage demands and spark inflation.

"It is the view of this Government that after almost a decade without an improvement in salary, Members of Parliament and Senators do indeed merit a substantial increase,'' Dr. Saul said in his Budget speech.

"However, the current state of the finances of the Country do not permit the increase to be paid in one lump sum, nor do the realities of the marketplace support the increase being retroactive.'' While the 27.9 percent hike is approved. 13.6 percent is to be paid on April 1, 1995, and the balance on April 1, 1996, he said.

To address a pension fund shortfall, contributions to the pension fund made by MPs and Senators are to increase to 12.5 percent of their pay, from 9.25 percent.

On top of the basic salaries, the Premier receives a salary of $56,300, the Finance Minister $43,500, the Deputy Premier $38,500, other Ministers $30,700, the Opposition Leader $20,500, the House Speaker $18,000, the Senate President $10,250, the House Deputy Speaker $9,000, Parliamentary Secretaries $7,700, Party Whips $5,200, and the Senate Vice-President $2,050.