Income from Customs fines is going down -- because Bermudians are being more honest when they come back from shopping trips.

That was the news for MPs yesterday, as consideration of the Finance Ministry budget continued.

The Minister, the Hon. David Saul , said the Customs department, Government's biggest revenue earner, was fully Bermudian.

Customs revenue was expected to be 10 percent up, based on an increase in visitors and in consumption.

Cash from penalties was down, he said. Bermudians were giving up the "somewhat ridiculous'' idea that they could beat Customs by wearing newly-bought shoes and clothes as they went through the Airport.

He praised the "excellent'' job done by Customs officials. More than 99 percent of visitors found themselves well treated.

Shadow Minister Mr. Eugene Cox was concerned about "demeaning'' searches. He hoped the Minister would make sure there were enough staff.

Maybe fines for drug trafficking should help fund the National Drug Commission, he said.

He called for more to be invested in training. This could be regarded as capital spending and be funded by borrowing, he said.

Because everyone needed clothes and food, poorer people -- often the ones with larger families -- could end up contributing more in customs duties.

Mr. Walter Roberts (PLP) said Bermuda did not have a large coastline to police. But the drug supply seemed to be on the increase.

He wanted to see more education to stop people getting involved in drugs.

He said lower duties on computers were still not low enough.

Mr. John Barritt (UBP) said the community needed to help Police and Customs by giving them tips, anonymously if need be.

Mr. Ottiwell Simmons (PLP) said some people were induced by unemployment to enter the drug trade. Government action was needed to tackle unemployment. The Hon. Maxwell Burgess (UBP) disagreed: "That trade was rife when we were in the 1980s, enjoying the best of times and over-employment.'' Mr. Harry Soares (UBP) said he could not accept that "people who are less financially well-off are somehow more immoral''.

Mr. Reginald Burrows (PLP) hit back, saying some hard pressed people "find themselves doing things they wouldn't normally do''.

Customs officers were under tremendous stress, he said. But passengers needed to be treated in a civil manner, and in many cases they were not.

Replying to Mr. Cox, Dr. Saul said training could not be called capital in accounting practice.

Taxes based on consumption were easy and fair. But Government had tried to help less well-off people.

On questions raised by Mr. Roberts, he said the opening of packages without the recipient being present had been "exceedingly fruitful''.

Drugs, laundered money and "a vast amount of pornographic films'' had been seized.

He told Mr. Roberts that computer software had no duty attached. The five percent cut in the duty on hardware was "substantial''.

Turning to the Post Office, he said revenue was dropping partly as a result of less stamp-buying by tourists. But staff numbers were staying the same to keep up the level of service.

Mr. Cox complained Government had allowed competition to take lucrative business .

As at Customs, he noted Bermudians were running a department and doing a good job. Independence could be looked at in this light, he said.

Mr. Roberts said a computer book sent to him last March had arrived about two weeks ago. He wondered if high-tech equipment, used by private competitors, could be used by the Post Office.

Dr. Saul said human errors could occur in any system. He said the Post Office was competing and doing remarkably well. But the growth in fax and phone use was also contributing to the loss of revenue.

He joined several members in stressing the importance of residents making sure they got social insurance benefits, especially pensions.

Discussing the Registrar of Companies, Mr. Cox questioned the standard of inspection and policing of companies.

There had been some very damaging occasions when companies had failed to do what they were supposed to do. Some dramatic company failures had sent bad signals abroad.

Government had long questioned a PLP administration's ability to manage business. But now it seemed international firms were nervous of hiring because of Government's "casual or callous'' approach to Independence.

Even Government supporters were following the PLP and calling the hospital levy and employment levy forms of income tax, he said.

He attacked Government handling of negotiations over Club Med and the proposed Ritz-Carlton hotel.

It was no good going out to dinner with people, having a few drinks and giving them the go-ahead.

Government had to be a tougher negotiator -- it was guilty of "giving away the shop''.

He said the PLP plan for a ministry of international business recognised the importance of the industry.

Mr. Burgess denied this. Government had prevented "sharpshooters'' getting their way in negotiations. Club Med had been a "good-looking deal'' at the time it was put together.

On taxation, Mr. Stanley Morton suggested small companies could be given tax breaks if they were not making any money.

Dr. Saul said companies were highly vetted and supervised. On small businesses, he said some were bound to fail in the competitive free enterprise system. Small firms were given a great deal of leeway already.

Talk of international firms being "jittery'' about Independence was unfair -- it was "pure speculation of a negative type''.

Companies would continue to come to Bermuda. They understood the Island and its "constitutional growing pains''.

The Bermuda International Business Association and the international division of the Chamber of Commerce were against the PLP's idea for a separate ministry, he said.

Going out and selling the Island might cheapen its image, he said.

Government's payroll taxes would not be described as income tax in any economics book, he said.

Ministry of Finance Ministry responsibility: "To supervise the economy of Bermuda generally and to provide overall financial management and control of all Government activities.'' Budget estimate: $45,855,000 (last year $41,690,000) Ministry HQ $2,991,000 Accountant General $20,201,000 Customs $6,949,000 Post Office $8,262,000 Statistics $1,037,000 Social Insurance $923,000 Tax Commissioner $767,000 Registrar of Companies $1,961,000 Rent Commissioner $179,000 Computer Systems and. Services $2,584,000 Revenue $335,871,000