So far, this newspaper has been fairly critical of the 2009 Budget, both for the breaches of some of the "golden rules" of Bermuda Budgets and for Government's failure to rein in spending. This newspaper continues to maintain that dipping into the Sinking Fund and breaching the rule on not borrowing more than ten percent of gross domestic product will do untold damage to Bermuda's financial reputation and could hurt the Island's standing with debt rating agencies.

Still, there was some good news.

Government offered the Island's embattled retailers some relief by delaying the requirement to pay Customs duty for three months after landing the goods. That's a start, since the system of paying duty on goods before they have had a chance to be sold is a tremendous burden.

Still, it doesn't go far enough; the major problem for retailers and other local importers is that Customs duties are too high; one way to kick-start the economy and to ensure that more money remains in the Bermuda economy would be to reduce duties. Such a cut might result in a reduction in Government revenue, but any such decline would be partially offset by an increase in sales here, as opposed to in a mall in New Jersey, and through maintenance of employment.

Similarly, Ms Cox has proposed exemptions on penalties for employers who are late paying payroll tax, presumably provided they can show good reason. That's welcome news too, although it runs a risk of rewarding those who fail to pay their taxes while effectively penalising those who obey the law. In any event, the penalties for failing to pay payroll tax are so paltry as to be an incentive to dodge the tax. It would have been better to have cut the rate of payroll tax for those in the lowest pay ranges, thus putting money in their pockets for rent, food, daycare and the like.

Instead, we have a strange situation where the poor are taxed at the same rate as the rich, but then are means tested to qualify for free services like daycare and rents that are geared to income. At the other end of the scale, Government is continuing to ramp up programmes like Future Care and the exemption from land tax for all senior citizens.

These kinds of blanket programmes (and so far, Future Care will be limited to senior citizens already on HIP) and exemptions look good on paper, but ignore the fact that there are wealthy individuals who are well able to pay at least a portion of land tax or health insurance, thus improving Government revenues or reducing expenditure.

That in turn would reduce the Government's need to borrow, which may seem to make sense now in a recession, but is handcuffing future generations of Bermudians.

Similarly, Government is accelerating some capital projects, which is the right thing to do in a recession, especially as private sector construction slows down. But there should be concern about the funding mechanisms for capital projects and how estimates on capital projects are missing their targets.

For example, the second pier at Dockyard had a Total Authorised Funding (TAF) of $50 million in last year's Budget. Not only was that sum exceeded last year, but the TAF has now increased to $60 million. And yet Government says that its very preliminary estimates put the cost of a new Causeway at $65 million.

If the much shorter pier at Dockyard will cost just $5 million less, can anyone take that Causeway estimate seriously, especially when Government is considering funding it through a public-private partnership model, which is more expensive by definition, even if it has other advantages?

So even where Government does good, it either does not do enough, or risks putting the Island further in debt.