Government's recent Budget should have done more to encourage manufacturing, the Bermuda Employers' Council said yesterday.

In a news release, president Mr. Dennis Tucker also reiterated the council's earlier condenmation of a 27.9 percent pay increase approved for MPs.

Mr. Tucker said Finance Minister the Hon. David Saul's February 15 Budget was "reasonably sensitive towards our two major industries, hotels and offshore business.'' But "it remains to be seen,'' whether the $5 hike in the Airport departure tax, to $20, "will receive a negative reaction from the individual tourist,'' he said.

"The one area that the Bermuda Employers' Council would have liked to have seen larger tax breaks given is that of the manufacturing sector,'' he said.

"A drastic reduction, or in some cases the elimination of tariffs for the importation of raw manufacturing materials would greatly assist the existing industries to remain cometitive, and would also encourage the development of small manufacturing businesses.'' Unemployment would be relieved by "a major move to assist local manufacturers and small businesses to develop,'' he said. The council would push for such a move prior to the next Budget.

Debate on Dr. Saul's Budget is to begin on Wednesday with the Opposition Reply.

Although the pay raise for MPs and Senators will be phased in over two years, rather than one, the council remains "highly critical'' of the move, Mr.

Tucker said. The increase sends out "all the wrong messages to the hard-working employee who has been given a small, or no increase during the recessionary period.'' Unlike MPs, many employers were not in a position to play "catch up'' as they emerged from the recession. The pay hike was the first for Bermuda's part-time Parliamentarians since 1987.

On the combining of the hospital levy and employment tax into a single 11.5 percent payroll tax, Mr. Tucker said it would be up to each employer whether to deduct four percent from each employee's pay cheque, as the law allows.

"The over-all picture that the Budget reflects is we must all be prepared to share in the cost of maintaining the Country, particularly in the light of a major expenditure such as the running of the Airport, which we are facing for the first time,'' he said.