Hikes in pension and medicine benefits for seniors and a $25 million boost for housing were the key elements in yesterday?s Budget as Government sought to put meat on the bones of its Social Agenda.

Finance Minister Paula Cox also set aside money to set up a base in London and diversify its Washington HQ to help Bermuda fight for its national interest.

Ms Cox painted a rosy picture of the nation?s finances with inflation likely to remain in the 2.8 to 3 percent range with growth at a similar level.

Premier Alex Scott?s Government intends to raise $835 million in revenue in the coming year, up from the $798 million likely at the close of this financial year ? itself boosted by six percent because of favourable payroll tax, stamp duty land tax and customs duty collection.

Planned current account expenditure stands at $806 million ? up $95 million on last year.

But Ms Cox announced a slow down in spending on capital projects in order not to overheat the economy. The $126 million will only be allocated to projects which stand a chance of starting in the coming year. Work will start on the Hamilton Police/Court complex in May while Sandys Secondary Middle School gets $1 million towards a gym, health club and swimming pool.

Government froze most fees so bus and ferry fares remain as they were, as do payroll tax, land tax, Customs duty and stamp duty.

But vehicle licences will go up by five percent from April 1.

Core to this year?s Budget was the Social Agenda.

As well as putting in an extra $25 million for housing, with $42 million planned for 2007/08, Government agreed to wipe out Bermuda Housing Corporation?s $49 million debt to help it borrow from financial institutions.

Pledging to tackle the housing issue Ms Cox said: ?We recognise the need and intend to address it.

?Given that there is a quiet desperation both with our young people and others who feel that they cannot afford their own home, or find a rent level that will allow them to save towards home ownership, there is the tangible commitment by Government to increase the available supply of affordable housing.?

She said the promise chimed with the Government?s Social Agenda.

?The results of the Ministry?s 2005 Housing Study revealed the average Bermudian spends approximately 41 per cent of their gross income on housing.

?Lower income households ? those earning less than $50,000 annually ? pay a greater proportion of their income towards housing.?

Government repeated its pledge to build 330 new affordable rental units over the next 30 months and to begin the Harbourside Village mixed housing development with 100 affordable units.

The replacement of the homeless shelter with a new 200-bed facility on North Street will start this financial year and work will also begin on the replacement of the emergency housing facility in Southside.

Minister Cox also revealed Government was in advanced negotiations with several developers to provide 96 affordable homes for sale to first-time home-owners priced $400-500,000. The development, at an unspecified location, will include an on-site day care facility.

Ms Cox said: ?Government has taken steps to increase flexibility in the housing market. It is recognised that as you review Bermuda?s housing supply, that house building must rise substantially to reduce house price inflation and to increase the number of affordable homes.

?Therefore Government is working tirelessly to expand significantly the supply of affordable housing over the next several years.?

Seniors get a four percent pension rise from August while Government is also increasing the $1,000 free prescription drug benefit for seniors to $1,150 from April 1.

And a $2 million top up from general reserves protects seniors enrolled in HIP from a $30 a month premium hike.

The new state-of-the-art seniors home in St. George?s is due for hand-over in June 2006 offering accommodation for seniors needing all levels of care.

There was no new money for ferries but Government will offer duty free importation of GPS systems for taxis and allow taxi owners to move into the limousine business.

Tax breaks have been granted to the fishing industry while the Tourism department gets its first raise for years with an extra $2.5 million to help fund marketing in Europe and South America. A section of Court Street will developed in Bermuda?s version of a French Quarter.

The new National Drug Control ministry gets a $4 million budget to help boost drug treatment and prevention programmes.

Summing up the Budget Ms Cox said it heralded an age of empowerment to help people succeed on their own terms.