Investment in the economy and the community, and few increases in taxes, formed the basis of Finance Minister Paula Cox's budget speech today.

Ms Cox announced an increase of $20 million in education spending throughout 2007-08 as the Government aims to tackle the failing schools system.

Education was given a budget of $152 million, up from $132 million in last year's budget. One of the Ministry's main tasks will be to carry out a full-scale review of the schools system, in the light of figures revealed last month showing more than half of final year students failed to graduate last summer.

Meanwhile the Ministry of Finance was given $127 million, up from $115 million last year, in a bid to maintain Bermuda's "world class" regulatory environment.

Emphasis was also placed on Bermuda's shortage of affordable homes, with the Ministry of Public Safety and Housing awarded $122 million. The Government said it would continue with a host of new housing initiatives, aimed at bringing hundreds more homes at a price low-income families can afford.

Health received $139 million. Ms Cox said the Ministry and the Bermuda Hospitals Board would progress an Estate Master Plan for the development of new healthcare facilities. In her budget speech, she made no specific mention of the proposed rebuilding of King Edward VII Memorial Hospital or the setting up of urgent care clinics pledged by Dr. Ewart Brown in his first 100 days speech last week.

The Tourism and Transport Ministry was given $134 million, up from $111 million in last year's budget. Planned schemes include the expansion of bus and ferry services.

The standard rate of payroll tax will remain at 13.5 percent, but the salary cap will increase from $235,000 to $350,000. Ms Cox said the salary cap rise should yield an additional $10 million. International companies will also see a hike in fees of five percent.

Total revenue is estimated at $917 million in 2007-08, about seven percent higher than the revised revenue estimate of $856 million for 2006-2007.

Capital expenditure is estimated at $141 million, of which $102 million, or 72 percent, is for the continuation or the completion of projects already underway.