designed to help the economy recover while enhancing Government's chances for re-election.

The two objectives should result in few tax increases and continued emphasis on helping people still caught in the grip of recession.

Dr. Saul's biggest test will be to cut departmental budgets without sparking the kind of public outcry that has so far accompanied plans to chop $2.2 million from the Education Department.

It will be a tall order given that Cabinet before Christmas issued directives to all departments to reduce spending by $12 million in total.

It is not clear whether the cutback plan has achieved that total, but budget reductions, and the rationale for them, will be a dominant theme of Dr. Saul's budget.

The Budget document will see the Minister confirm the $2.2 million spending cut in Education. He will also detail reductions in other departments such as maintenance budgets at Works and Engineering and in ferry services at Transport.

Government will use this year's spending plan to extend help to sectors of the economy that remain hobbled by the poor economy.

The hotel industry, whose eight largest properties last year lost $12 million, should see an extension of customs duty relief for hotel refurbishments.

There are indications that Government will agree to roll back specific duties on retail goods to help the ailing retail sector.

And there is widespread expectation that the 20 percent licence fee non-Bermudians pay to buy local property will be cut to 15 percent. The measure could act as a shot in the arm for the bloated condominium market.

(See Page 9).

But Government's ability to provide tax relief has been severely limited.

Preliminary figures for the current fiscal year indicate that Government revenues are down an astounding $32 million.

Despite budgetary pressures to raise taxes, Dr. Saul is unlikely to do so given that an election must be held within the year and the business community's hostility toward any additional costs.

One area certain to see tax hikes is the yet-to-be established second-hand car market. Government is likely to increase the duty on spare parts from its current level of 331 percent as well as the transfer fee for second hand sales.

Taxes on betting should also rise.

Tomorrow's Budget should see the Minister express Government's determination to improve visitor arrivals -- and spending -- during the year.

It is certain that the Tourism Department will be given more money to develop the European market, particularly Germany.

Finally, Government is expected to use the budget document to tout its prowess as good managers of the economy during recession.

Specifically, Dr. Saul will explain how his Ministry covered the $32 million revenue shortfall and increased demands for social assistance. During the current fiscal year, it increased social support spending by $9 million.

Dr. Saul will characterise Government's capital works projects such as the prison and the Tynes Bay incinerator as big job providers.

The claim that Bermuda has weathered the recessionary storm better than most other countries is certain to be heard.