From Page 4 INTERNATIONAL BUSINESS Mr. Speaker, "There are risks and costs to a programme of action. But they are far less than the long range risks and costs of comfortable inaction.'' -- John. F. Kennedy Mr. Speaker, the economic fortunes of our country rests on the two "pillars''of the Bermudian economy: tourism and international business. The continued growth of international business, more particularly insurance and reinsurance leads us once again to call for the establishment of a Ministry of International Business to better position ourselves in this increasingly competitive environment. A separate Ministry would help to militate against unplanned growth in the international business sector, and would help to promote orderly business development, a concern which we share with the international business community.

Mr. Speaker, foreign exchange earnings from the international business sector in 1993 were some $485 million. In 1994, a record number of 1,091 international companies and 61 exempted partnerships were added to the register. The success and growth of this sector is supported by the UBP government's acknowledgment of increasing pressures, on the Registrar of Companies resulting in an additional funding request for the department of $185,000 for additional staffing requirements. The importance of this sector to the Bermudian economy, together with its growth potential and competitive pressures supports the establishment of a Ministry of International Business which would work in partnership with the international business community.

Mr. Speaker, the Minister should look towards expanding international business into other areas which are complementary to insurance and reinsurance such as offshore banking and custodial services, offshore mutual funds and offshore investment management services, ile being cognizant of the limitations of Bermuda's infrastructure. These areas, we believe, will provide Bermuda with substantial foreign exchange earnings in the future together with providing quality employment opportunities for Bermudians.

HUMAN AFFAIRS AND INFORMATION Mr. Speaker, the 1995 6 Budget provides some indication that the UBP Government is now willing to consider making their taxation policies more equitable. Yet despite this, we cannot deny the overwhelming evidence of statistics, which attest to the glaring levels of social disparity that exist in Bermuda today. Stringent measures are required to counteract this. The Household Expenditure Survey 1993 highlighted the fact that there are still considerable economic inequities which have a clear racial bias operating to the disadvantage of black people.

For instance, the average weekly household income of black people is $990.81, and the average number of persons per household is 2.62. For the category of white and others, the average weekly household income is $1599.15 and the number of persons per household is 2.37. It is interesting to note that the average number of workers per household is 1.46 in comparison to 1.39 for white and others which further highlights the income disparity.

Mr. Speaker, while the Progressive Labour Party welcomed the formation of the Commission For Unity and Racial Equity with its mandate to end racism, we are once again dismayed that a mere $30,000 has been allocated for such a monumental task. We are concerned that government's effort to end racism thus far has been a public relations exercise.

Mr. Speaker, we in the Progressive Labour Party recognise that there is a direct correlation between the increase in crime and substance abuse. Despite the unprecedented rise in violent crime, Government does not appear to be motivated enough to eliminate the demand for illegal drugs by helping the drug users. Funding must be directed towards decreasing the demand.

TOURISM Mr. Speaker, it is vital that Bermuda properly position itself to maximise the potential opportunities for our tourism industry, and this Budget should provide the appropriate support to accomplish this. One cannot help but question whether the people of Bermuda are getting "value for money'' in respect of the $29.5 million that is being allocated to the Ministry. The less than 1% increase in air arrivals in 1994 and a continued substantial shortfall in air arrivals compared to even 15 years ago reflects the UBP government's failure to market Bermuda as a year round tourist destination. This projected performance is grossly inadequate when compared to the double digit percentage increases that some of our major competitors have been enjoying.

Mr. Speaker, we are concerned that the Estimates of Expenditure for the Department of Tourism not only represents a "holding action'', but also indicates that Bermuda has lost ground in its ability to compete in the ruthlessly competitive climate in the international tourism marketplace.

It is because of the softness, stemming from a variety of circumstances, including ineffective marketing, intense competition, continued recovery from the recession and price resistance, that Government's proposed increase in the airport passenger head tax by a third, to $20, is most untimely.

It is not so much the actual dollars involved, as the fuelling of the continued perception that Bermuda is pricing itself out of the market. The increase will foster those negative perceptions among many travel agents and travellers themselves. At this time it would have been more prudent to find another source of additional tax revenue.

Mr. Speaker, the obvious economic contributions of the air arrivals to visitor expenditure is demonstrated by the fact that through the first nine months of 1994, their contributions amounted to approximately 91% of the total $427.3 million. Mr. Speaker, it is obvious where Bermuda must concentrate its efforts from a marketing perspective.

Mr. Speaker, the Honorable Finance Minister's forecast of a three percent increase in overall visitor arrivals this year is probably a reasonable, though modest one, given the see-sawing nature of arrival figures thus far this year. Ironically, just the normal operation of the cruise ships the Royal Majesty and Horizon this year, after last year's setbacks, could account for around a third of the projected increase.

Mr. Speaker, it is in air arrivals that we particularly need to see a substantial increase, and one potential source of these passengers is the new flight out of Germany, which the Progressive Labour Party has long advocated, and which will become a reality in May. However, this can only succeed with adequate cooperative on-the-ground marketing efforts in Europe. Mr. Speaker, we are not convinced that the Government is investing adequate promotion of funds in Germany to back up this initiative, given the fact Bermuda is largely breaking new ground. It is imperative that this project succeed or this may be seen as a lost opportunity for years to come. Mr. Speaker, increased efforts need to be made to restore Bermuda's lustre as a destination attracting those interested in shopping, sports and family vacation activities.

Mr. Speaker, there is also a need for the Department of Tourism to think more tactically when it comes to projected dips in tourism arrivals, rather than seeing the marketing campaign as laid out at the start of the year as being engraved in granite. It is likely that this summer will once again see some "valleys'' among the "peaks'' of visitor arrivals by air, largely as a result of strong competition from Europe and US domestic destinations, both areas which we compete directly with during summer months. Proper contingency marketing plans -- and the funds to support these -- must be on hand so that Bermuda has quick reflexes in dealing with any potential shortfalls in the increasingly impulsive tourism marketplace.

We are thus disappointed that the Hon. Finance Minister has not seen fit to grant further import duty reductions on certain prime visitor shopping merchandise, as we called for in last year's Budget debate. Our soft adventure sports need to be highlighted to a greater extent in our overseas advertising, and hotels need to be encouraged to develop more family-oriented facilities and activities.

We also intend to highlight in this debate the importance of the development of the Base lands to tourism, since this will assist the tourism economy of the East End and any redevelopment of the Club Med site, which the UBP Government has for too long been remiss in facilitating. We expect no further excuses from the Tourism Minister as to the continued closure of this property. Action must be taken against Club Med this year.

Mr. Speaker, Government needs also to ensure that qualified Bermudians receive sufficient upward mobility to the uppermost rungs of our tourism industry, whether in our hotels or our North American sales office. It is totally unacceptable that after 110 years in the hospitality industry, Bermuda still does not have a Bermudian in the top executive position in any of our major resort hotels. Similarly, we expect steps to be taken to ensure Bermudian entertainers receive the employment and recognition in the tourism industry that their talents deserve.

LABOUR AND HOME AFFAIRS Mr. Speaker, the Finance Minister speaks of the growth in the GDP and the modest upturn in tourism, but he does so without acknowledging the role of the Bermudians who have made this revival possible -- by taking cuts in their salaries and benefit packages. To ensure that all Bermudians share in the "turn-around'' of the economy the PLP calls for organised labour and management to approach these changing times with different and innovative economic solutions.

To this end management and owners must not try to recover at the expense of labour, but recover -- with labour!! If labour was required to share in the owners' risk, losses and lean years, then it follows that labour must now be encouraged to share in the decision-making, profits and future growth of the economy.

The Finance Minister states that, "The other pillar of our economy, international business, has continued to expand ...'' In our view, we must take steps to ensure that Bermudians expand and grow with the industry.

Therefore, there exists in the international business sector a need to build a partnership between Bermuda, Bermudians and these international corporate residents. In a growing number of instances the traditional employer- employee relationship has soured and become potentially counter-productive for an industry that has become so important to the economy of the island. A conversation with either employer or employee will reveal a relationship that has fallen short of the expectations of both. The introduction of more and more Bermudians to overseas branch and head offices could lead to Bermudians acquiring the necessary experience employers feel they need, and for the Bermudians to gain a more objective view of corporate life, politics and corporate structure.

Mr. Speaker, the Finance Minister reports that "... the construction industry itself is beginning to turn around ... new construction ... at $25.4 million ... more than two and one half times the level for the same period in 1993.'' In an attempt to encourage continual growth and future employment for Bermudians in this field, town and country planners, local architects, contractors and construction workers, need to ensure that the local construction industry keeps abreast of changing methods and trends.

Mr. Speaker, if we now turn to the subject of employment and unemployment the PLP has to observe that the Finance Minister's reported economic recovery has not impacted on the plight of the Bermudian male. He lost 2 1 % of his job share during the period between 1982-1991. However while his job share appears to have bottomed out (see Bermuda 1994 Economic Review, table 17, "Number of jobs by Economic Activity Held by Bermudians - males'', 1993- 12,680 and 1994 - 12,773), Mr. Bermudian Male is not yet on the road to real recovery, and Mr.

Speaker, the question is what steps are the UBP Government taking to put him on the road to recovery? Mr. Speaker, the Government is evidently failing in its ability to train and re-train Bermudians for the economy. We know this because over eighteen months ago, the Government promised a training officer who would produce a training programme. This promise has now been recycled with the announcement that "funds will be provided for a dedicated training officer in the Ministry of Labour and Home Affairs whose objective will be the formation of a detailed strategic plan for future employment and training with a programme structure to match employment opportunities''. Mr. Speaker, we note the original estimate was $2.2 million in the 1994 5 Budget. This was subsequently revised downwards to 767,000 for 1994 5. Now, we see in this year's 1995 6 Budget these figures have been raised again to $1.5 million.

The Government does not seem to be serious in its commitment to training.

Table 1 shows the number of jobs held by Bermudians by economic activity and the number of jobs lost.

(SEE TABLE 1, ABOVE) Mr. Speaker, although the overall employment of Bermudians in the work force has increased within the past year from 26,486, in 1993 to 26,930 in 1994, an increase of 444 persons or 1.7%, it still has not reached the pre-recessionary levels during the late 1980s of approximately 28,000.

(SEE TABLE 2, ABOVE) During this same period, the larger firms, i.e. those employing an excess of 10 staff reduced in number from 81 firms in 1993 to 73 firms in 1994, a reduction of 8 or 9.9%. Employment in these firms reduced from 3,360 in 1993 to 3,301 in 1994, a reduction of 59 or 1.8% as Table 2 shows.

The above reductions shown in Table 2 supports the claim that the impacts of the recession are still being felt.

HEALTH, SOCIAL SERVICES AND HOUSING Mr. Speaker, the Minister should provide the data that would provide a true sociological report card for Bermuda. The Budget Statement states that unemployment is on the decline, and that we are climbing out of the recession better than any other place.

However, Mr. Speaker, we ask in a related matter, has there been a "real'' decline in the number of persons applying for financial assistance, as the Finance Minister would have us believe, or does the explanation for the decline lay in the recent change in government's processing and reporting of the public's request for assistance? Unemployment has created several situations that has left the social fabric of Bermuda needing repair.

Mr. Speaker, the Hon. Finance Minister boasts that the last three Budgets were carefully crafted to overcome the problems which the downturn in the economy brought. It was our contention as stated last year that it was Bermudians who suffered most and I state now that the current focus should be on restoring to Bermudians their confidence in Bermuda as a place where the needs of their children and themselves can be fulfilled -- the Bermuda dream.

Bermudians fear that their children will not live as well as they have and that the Bermuda dream is out of reach of most families. Mr. Speaker, I believe that we must leave no doubt in people's minds that our principal objective is to promote policies for the betterment of Bermuda.

EDUCATION Mr. Speaker, if one were to use the amount of money allocated in the Budget as the sole criteria for assessing the quality of Bermuda's public education system -- one might think we had the best system in the world. It is surely one of the most expensive in the world on a cost-per-student basis. However, we get a clearer picture if we look past the dollars and cents to the education policies supported by the funding. We believe rather than being dazzled by the amount of money currently being spent on education, the people of Bermuda want assurances that funds allocated are well spent.

Mr. Speaker, parents want their voices to be heard. They want their concerns addressed. They want their fears removed. We believe that an objective comparison of the performance of our public education system would be invaluable in answering the fears of parents who are increasingly moving their children from public to private schools. Such a comparison would also provide a necessary value benchmark for the goals of the Ministry and allow the public -- who fund the system -- to judge whether they are getting fair value for money. Achievements used by private schools to enhance their reputations are just as important for public schools. Parents should know whether or not the Ministry has increased the number of students retained in the system, or if the number of drop-outs has increased. Parents should know if more students are achieving at higher levels, or if more are failing. In other words, Mr.

Speaker, as guardians of the public purse we should be able to qualify and quantify the results of any increased educational funding.

Mr. Speaker, we welcome funding for teacher assistants for special needs students, but we are reminded that the Government Education Planning Team's recommendation of teacher assistants for all primary one and two levels continues to be ignored. This recommendation is even more important today with increased pressure placed on teachers to deal with a variety of learning styles and differing educational abilities in addition to the various social problems that impact on classrooms containing 25 or more children.

Mr. Speaker, we note the increase in the Ministry of Education staff from nine (9) to twenty-six (26). An increase of seventeen (17) people in one year! (from the 1993 4 Budget Statement to the 1994 5 Statement). The growth in this Ministry is cause for concern because the Education Planning Team's recommendations pertaining to the Ministry have still not been addressed, and the impact of school boards under a decentralised system is still unknown.

CAPITAL DEVELOPMENT Mr. Speaker, let's discuss the realities of Government's sound financial planning. Capital expenditure is budgeted at $58.7 million substantially up from the 1994 5 estimates of $42.7 million. The major funding will be in the Education Ministry with the further development of the Prospect Senior School and Middle Schools, and the completion of the Bermuda College. In addition, a further $2.75 million will be spent to complete the Tynes Bay waste disposal plant.

Mr. Speaker, the Minister has stated that he hopes to fund these expenditures with the aid of a syndicated bank loan of $75 million. However, he has retained the option of a local bond issue. One of the dilemmas that the Hon.

Finance Minister, Dr. Saul is faced with is that the statutory borrowing limit is 10% of Gross Domestic Product (GDP) and while that may be a fair and reasonable method of capital maintenance, government revenues are not keeping pace with the GDP. This in essence places more pressure on Government to raise taxes in an effort to meet its financial obligations.

WORKS AND ENGINEERING Mr. Speaker, we must continue to create opportunities for the employment of all Bermudians. Therefore, Mr. Speaker, we ask the UBP Government: will the $200,000 allocated to the Ministry of Works and Engineering for maintenance of the site and building, together with a sum of $500,000 to fund security and maintenance costs at the US Naval Annex after the hand over of the Base lands lead to the creation of additional jobs for Bermudians? If so, how many and how soon? Mr. Speaker, the Finance Minister has stated that the value of new construction projects started during the first nine months of 1994, at $25.4 million, was more than two and a half times the level for the same period in 1993. It is extraordinary that more projects were started last year than in the previous recessionary period. The UBP Government seems to have had its priorities askew. When the necessary boost was needed to give some relief in terms of alleviating the hardships of unemployment, it did not act. The UBP Government should have given incentives for private enterprise to start building during the depth of the recession, rather than at the end.

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