Downplaying the significance of lowering Bermuda's economic outlook from 'positive' to 'stable' by one of the world's leading debt rating agencies is a mistake, Shadow Finance Minister Pat Gordon-Pamplin has warned.

And the Acting Opposition Leader said Bermuda-specific issues factored into the latest assessment by Standard & Poor's, including the impact of election promises on the public purse, a perceived lack of transparency within some branches of Government and increasing social polarisation, need to be addressed – not dismissed or ignored.

Finance Minister Paula Cox earlier welcomed the reaffirming of Bermuda's "AA" credit rating and said the 'stable' outlook was more consistent with the Island's standing over recent years.

Ms Cox did not comment on the Bermuda-specific concerns cited by S&P. Nor did Cheryl Packwood, chief executive of the Bermuda International Business Association in an e-mail circulated to various business figures following The Royal Gazette's report on Monday.

Ms Packwood said in her e-mail, which this newspaper has seen: "I want to allay any concerns you may have. This reporter did not unfortunately demonstrate in his article an accurate understanding of global economics and Bermuda's position therein.

"In a macro-economic environment like this, moving from a positive to stable outlook without a change in Bermuda's overall rating is normal and not something that should be a major concern or require significant changes in approach."

But Mrs. Gordon-Pamplin said: "Bermuda must not be satisfied with the status quo, but always ensure that it is on the cutting edge as a sound jurisdiction. Any slippage in ratings should be cause for concern," she said.

"Government appears to be satisfied that Bermuda is deemed to be 'stable', however, it would not take much to erode that rating in light of the many concerns expressed by S&P's that prevented that agency from upgrading our rating."

At the same time a businessman within Bermuda's financial sector, who spoke on condition of anonymity, commented: "I hope Government sees the danger in how they're acting."

The reactions followed S&P's post-election view of the Island. The New York-based ratings agency had positive words on the PLP's track record for managing the economy and confirmed Bermuda's "AA" long-term credit rating. It noted the Island's low level of Government indebtedness, strong income and economic structures and vibrant international business sector.

But on the minus side S&P's commented on "increasing-but-still-minor concerns regarding social polarisation, the business environment and transparency of Government."

Overdue audits of accounts from various Government bodies – some dating back to 2003 – were also cited amongst factors that played a part in Bermuda losing its "positive" outlook.

Election promises including free public transport, free day care for qualifying families and enlarging health care benefits for seniors will likely worsen Government's fiscal deficit in the coming year, which is already double that previously assumed for the 2007/2008 financial year, according to S&P's.

Global economic factors beyond Bermuda's control were also considered.

Mrs Gordon-Pamplin said: "To downplay the importance of the S&P's rating would be a mistake. We do not wish for negative publicity to define Bermuda in the eyes of the rating agencies.

"Lack of accountability, cost of election promises that were thrown up in the air in a most irresponsible fashion without regard for how they will be paid for, and the trump card of racial polarisation that is the hallmark of the PLP Government that will come back to haunt Bermuda as a desirable destination, and will ultimately be reflected in our international rating.

"Add to that equation, serious crime such as the Island experienced on Boxing Day, along with the failure of the BMA (Bermuda Monetary Authority) to implement the recommendations by the IMF in a timely manner, all minimise our comfort cushion for our international reputation."

A businessman who received Mr Packwood's e-mail said she appeared, like Ms Cox, to be trying to hold the "upper ground", adding: "But any slip is a slip. You cannot avoid what the analyst said. If it had all been good, it would have been trumpeted from the rooftops by the Government."

Mrs. Gordon-Pamplin concluded: "It is a pity Government has chosen to rest on its laurels when they should be trying to do much better for the future protection of our economy."