Concern was raised in the Senate about the increase in payroll tax by half a percent and the ability of the pension scheme to support an ageing population.

The issues aired during the second readings of a number of bills including the Companies Amendment Act, the Exempted Partnerships Amendment Act, the Overseas Partnerships Amendment Act, the Miscellaneous Tax Amendment, the Payroll Tax rates Amendment, the Government Loans Amendment, the Contributory Pensions Order, and the Land Tax Order.

Questioning the need to raise the payroll tax, UBP Senate leader, Michael Dunkley said that while he recognised it was only half a percent, it could impact on struggling businesses. The increase is from 13.5 percent to 14 percent.

He said: "I am sure the businesses are going to have to pass that cost on and that's going to increase the cost of living. The more we tax the more burden we put on people in the community."

PLP Senator Kim Wilson assured the Senate that the increase would have to be dealt with by the employer and that employees would not see an increase in their deductions.

The new act would also extend the lowest payroll tax applicable to new start-up businesses in economic empowerment zones from one year to two years.

Farmers, fishermen, hotels, guest houses, restaurants and small businesses are assessed at lower rates which will remain unchanged, and the employee portion of the tax is being held at its existing rate of 4.75 percent.

The amendment to payroll tax was passed, before debate on the Government's increase in borrowing power was given the green light to jump from $375 million to $550 million.

Ms. Wilson said the increase still fell within the statutory limit of a maximum ten percent of the Gross Domestic Product (GDP).

It will be used to finance "hard capital assets as investment in our nation's physical and social structure," she said.

Introducing the Contributory Pensions Order, which will increase seniors' pensions by five percent this year, Sen. Wilson said it was a sign the government was here to improve seniors' lives, adding: "This is an indication of our government's dedication to the quality of life for senior citizens."

While pensions will rise by five percent from August, the increase will be offset by a rise in employer/employee contributions of 6.75 percent.

The basic contributory pension — received by 73 percent of pensioners, will rise from $863.24 to $906.40 per month.

At the other end of the scale, the maximum pension of $1,172.5 per month will increase to $1,215.66. Up to 53 percent of the 9,367 seniors covered by the Contributory Pension Fund will receive this amount.

The 6.75 percent increase in employee/employer contributions is equivalent to $3.84 each week.

Independent Senator Walwyn Hughes said he is a beneficiary of this plan and was concerned that in the next five years it would not be able to pay out the pensions needed. He said: "Something has got to change. (By 2010/2011) The contributions paid in will not meet those paid out."

Senate passed the bill before t The Old State House in St. George's was freed of land tax, which the Lodge St. George believed had been paid by the Corporation of St. George, which was the Trustee. With senators in agreement, the Lodge St. George and the Corporation was freed of its burden.