On Friday, the United Bermuda Party responded to the Budget presented by Finance Minister Paula Cox JP MP. I wondered how the Opposition would attack a budget which, in my view, did all that a budget is supposed to do.

The 2005 budget is the financial plan that outlines how the Government's Social Agenda is to be paid for. The Social Agenda was laid out last October during the Throne Speech. At that time, Ms Cox promised Bermuda that the PLP would:

1. Strengthen social cohesion in our community;

2. Develop and train our young people;

3. Improve the quality of life of our seniors;

4. Put good quality homes within the economic reach of more Bermudian families; and

5. Stabilise, rejuvenate and encourage business activity in all economic sectors.

There were a number of initiatives designed to improve social cohesion in our neighbourhoods. These were to be the focus of a programme called the Community Areas Programme or CAP. The Minister noted that CAP's genesis arose from Government's experience in promoting and funding the St. Monica's Mission neighbourhood plan. I feel compelled to point out that the St. Monica's Mission initiative was the brainchild of Brother Ottiwell Simmons and probably would not have succeeded without his energy and perseverance.

Emphasising that the youth are our future, Ms. Cox also laid out a series of programmes designed to improve the education, development and training of youth. The most important of these, in my view, is the increased Grant to the National Training Board in order to “implement the Tech Quest 2000 Project, a private-public partnership aimed at providing technical skills to unemployed and under-employed individuals, and a programme for youth drop-outs from senior secondary schools”.

Ms Cox pointed out that the PLP intended to use $88 million or 60 percent of the budget of the Ministry of Health and Family Services as transfers to the hospitals “for subsidised medical care of the elderly, youth and persons without the means to pay for these services”.

She noted that the Ministry of Works and Engineering and Housing had plans “already underway or at the launch phase for the construction of 160 housing units which would include new units and as well as renovations and restorations at various sites around the Island.” The Minister also acknowledged the gift of $1 million presented by the Bank of Bermuda-HSBC Group for the emergency housing initiative.

In a significant move in the area of drug interdiction and rehabilitation, the Minister stated that the National Drug Commission will be fully integrated as a department of the Ministry of Health and Family Services. It is notable also that the Department of Corrections will receive $600,000 for staff training and development and that $1.8 million has been budgeted for a range of programmes for inmates.

It cannot be denied that the Social Agenda represented a real effort to deal with very pressing social issues facing Bermuda. But the PLP also showed that it was conscious of the need to keep the economy stable and to rejuvenate and encourage business development in order to pay for this ambitious programme.

The Minister intends to accomplish this by continuing initiatives in economic diplomacy. This refers to the continuance of established effective relationships in Washington DC amongst law makers, their policy advisers and administration officials. It also included the strategic partnerships that have been established between the Government of Bermuda and the locally-based stakeholders. The Minister asserted that “these relationships have helped to ensure that Bermuda maintains its international reputation as a vibrant, well-regulated and stable financial services jurisdiction”.

Clearly, this was a textbook budget and I and others wondered how the UBP would make a meaningful response. Well, respond they did; and it was a good response.

Expectedly, the UBP had very little to comment on with respect to the objectives of the Budget, the expected cost of meeting those objectives and the means of financing the cost. Such being the case, the UBP decided to attack the way that past budgets had been financed.

Hence, the UBP complained that, in the past, the PLP had overtaxed Bermuda because of its poor forecasting techniques. As a result, the PLP had prevented Bermudians from the enjoyment of more goods and services by taxing them more than was necessary. In fact, thundered the Opposition Leader that was why the national debt was so low.

The argument that the people had been overtaxed is always well received, whether or not it is true. Bermuda's indirect system of taxation does not allow Bermudians easily to determine what proportion of their income goes to tax. Hence, claims of over taxation are easy to make but very difficult to refute. But the claim that the PLP overtaxed residents as a result of poor forecasting was an obvious gross exaggeration. Since the PLP has been in power, Bermuda has been experiencing an economic boom. This economic expansion has resulted in a marked increase in the demand for workers and hence larger payrolls and larger payroll taxes.

Why did the UBP accuse the PLP of unfair taxation when they knew the increased tax reflected higher levels of employment? The answer is simple. It is a blatant attempt to blame the PLP for the large importation of workers and hence stir up feelings of hostility against imported workers and, by extension, the PLP. It is for this reason that much is made of the fact that many new jobs have been created since the PLP came to power but that these were going to non-Bermudians. This is nonsense and the UBP know it.

The reduced level of employment of Bermudians is a result of the decline in birthrates that has been occurring for several decades. Such being the case, the UBP knew that the number of Bermudians entering the workforce would be decreasing for some time in the future.

A glance at the Census data for 1980 and 2000 bear this out. In the year 1980, the population stood at 54,050. By Census year 2000, the population stood at 62,059, an increase of 8009 or 14.8 percent. However, the population aged 15 to 24 (the population entering the work-force) declined by 2,781 or 29.1 percent. Clearly, new entrants to the workforce are declining and Bermuda will have to import workers just to keep the workforce at stable levels.

One wonders therefore why the UBP leader could not resist the temptation to encourage hostile feelings against permit workers just to score political brownie points. The PLP clearly did not create jobs for foreign workers at the expense of Bermudian workers. Had they done that there would have been substantial unemployment in Bermuda perhaps at the level of seven percent. This is certainly not the case. Although I am certain that as a result of the statements by the Leader of the Opposition, many Bermudians are now attributing the importation of non-Bermudian workers as the reason for wall sitters. Why the UBP has sought to perpetuate this lie is beyond me.

I hope that before this budget debate is completed, the UBP will cease this strategy of creating hostility against non-Bermudians. If this is done, the Budget Debate should continue at the high level achieved during the debate on Tourism. Let's hope this is the case.

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