Finance Minister Eugene Cox reasserted Government's commitment to unemployment insurance in last week's budget but the Bermuda International Business Association is questioning the need.

Chief executive officer Richard Calderon said: “Based on data available through the 2000 census it would appear the rate of unemployment doesn't support the creation of an unemployment scheme.

“We believe Bermuda's economy, from all the statistical information, is over employed.”

Census figures from 2000 give the unemployment rate as three percent of the workforce, down from six percent in 1991.

“There doesn't appear to be a need to move in this direction. This is a major concern,” said Mr. Calderon.

Employers and other interested parties had to file their responses to the proposal at the end of last month.

The discussion paper gives a comparative analysis to schemes in Barbados, Canada, Britain and America.

But Mr. Calderon said: “It should have taken data from like jurisdictions with similar rates of unemployment.”

He said Bermuda should have been compared to places such as Guernsey.

The British island in English Channel has a low tax economy based on tourism and banking - 87 percent of its economy is based on service industries.

It has a labour force of 31,000 compared to Bermuda's 37,000, while its population is slightly larger at 64,000 compared to Bermuda's 62,000. It has an unemployment rate of 0.5 percent.

Mr. Calderon said employers in Bermuda had to pay various payroll deductions already and was obligated to paying severance and redundancy pay under the Employment Act 2000.

Adding to the burden on the employer would hit small business, particularly restaurants and retail, said Mr. Calderon, adding that social assistance was available for those out of work.

He said he hoped the Government would do a thorough analysis of employment trends and hold deep discussions before moving forward with trying to set up a scheme.

He said: “As a result we suggest any contributions towards unemployment insurance should be the responsibility of the employee.

“I think at the end of the day it's really an insurance scheme for seasonal workers. We understand that.”

Gaps in employment were largely in seasonal sectors such as hospitality and when people leave a job to get another, said Mr. Calderon.

“It's my understanding the hotel and construction industry have schemes providing funds when they are laid off.

“We would like to know more about this as part of the discussions.”

He said he believed the unions had such a scheme.

However Bermuda Industrial Union leader Derrick Burgess said: “Government has nothing in place in terms of unemployment insurance, let's not even go into the unions. It's not about the unions.

“There are many people who become unemployed every year in Bermuda, they need to be taken care of.

“You don't wait until you get mass unemployment to put a system in place.”

There was nothing for laid-off hotel workers, said Mr. Burgess.

“A lot of them spend everything they have before they get any benefit.

“Government is wise by putting something in place. Hopefully no one will have to use it. That is my dream.”