The following is the full text of Shadow Finance Minister Mr. Eugene Cox's reply to the 1998/99 Budget.

*** Mr. Speaker, the major challenge facing Bermuda is the need to restore voter confidence lost through the failure of the UBP Government to create real opportunities for Bermudians to succeed. The major problem in meeting this challenge is the fact that we still have a Government that has consistently failed to address the real issues affecting this country. Thus, concrete measures are needed to strengthen the ties that bind us together and to ensure renewed economic stability for our Island. A PLP Government will ensure that this takes place.

Against this backdrop the Government's Budget strategy should have been aimed at: Strengthening economic fundamentals, while also; Fostering a climate of mutual trust between labour and management towards a true partnership; Restoring employee confidence; Educating, training and re-training the workforce, where applicable; Restoring to prominence our tourism product, and; Regaining the trust of our young people by giving them hope for a brighter future.

The measures announced in Government's 1998/99 Budget Statement will not assist in reducing the unsettling situation for our tourism related sectors (in particular the hoteliers, retailers, restaurateurs and taxi-drivers). Nor does it address how Government proposes to make Bermuda more attractive to Bermudians.

While the 1998/99 Budget continues to focus on juggling fiscal policy to create a current account surplus, it fails to provide initiatives to encourage businesses to train and re-train employees to meet the challenges of the future.

In this Budget Reply, which I expect to be my last one as Shadow Finance Minister, I would like to focus on the economic challenges ahead for Bermuda.

Over the last 35 years, the PLP has been a forward-thinking, innovative Party, which first raised such fundamental issues as Government pensions, health insurance, education reform, and affordable housing. This enables Bermudians to look ahead to the future with renewed confidence and hope as a PLP Government is set to win the next General Election.

There are tremendous challenges to face but there are also tremendous opportunities to be won. The Bermuda Progressive Labour Party has the will. We understand that if we are to succeed in this shrinking global economy and if we want to have the services and the standard of living that we all aspire towards, then it requires the Commitment, Courage and Conviction of us all as Bermudians, working together, shoulder to shoulder, with a shared vision and purpose.

The Bermuda Progressive Labour Party's economic objective is to see a Bermuda which provides an economic climate that encourages stable levels of growth and employment.

A vibrant and thriving tourism industry; A healthy and competitive retail sector; A robust and innovative local business environment that encourages entrepreneurs and new business; and Financial policies that ensure our international companies can continue to compete effectively in the global marketplace.

The Progressive Labour Party is committed to investment in human capital so all sectors of the community benefit from the economic gains.

We want economic development to take place in a manner that safeguards Bermuda's people for future generations. We want to empower the Bermudian people so we can help effect a real improvement in the quality of life for the average Bermudian and not just for the few.

A "Reality Check'' after 30 years of UBP Government We note the Finance Minister's observation that the UBP Government has led Bermuda for thirty years. This is sadly true, and the country has been paying a heavy price.

If the UBP Government wants to brag about the last thirty years of UBP governance, then they must accept with equal alacrity their failures and there are many. The reality is that many people over the last thirty years of UBP Government have not fared that well despite their much vaunted claim of sound economic management.

For instance, the 1998/99 Budget Statement states, "The unprecedented (UBP) stewardship lasting now for three decades through successive Governments created a sound economic environment in which Bermudians could work and prosper, in which Bermudians could seize opportunities and follow their dreams.'' (page 3 of the 1998/99 Budget Statement) Reality Check: An unprecedented number of well established, Bermudian-owned businesses have closed their doors under the current Government -- from restaurants to retail outlets. The glass ceiling is still blocking the upward mobility of many Bermudians from top-tier jobs. This is especially noticeable in the hotel industry where there is a notable absence of Bermudians in top positions in any of the major resort hotels.

There is also the claim in the Budget Statement that "Bermuda has experienced a remarkably low unemployment rate through three decades.'' (page 3 of the 1998/99 Budget Statement) Reality Check: The UBP Government bases its assessment largely on the records of the Government Employment Agency. Records that cannot be relied on because of questions surrounding the completeness of data gathered. So many of the unemployed fail to register with this agency so the validity of the statistics cannot be accepted unquestioningly.

The Budget Statement asserts that: "This Government understands that our people are the key asset for economic prosperity in the modem global economy.'' (page 5 of the 1998/99 Budget Statement) Reality Check: There are countless examples which attest to the contrary.

Whether you want to consider the examples of Mr. Wayne Perinchief, Mr. Dennis Tucker at Sonesta, Dr. Susanne Smith and her employment by the UBP Government as a veterinarian, or Mr. Warren Jones at Northlands School etc., there are a myriad of examples and these all undermine the credibility and sincerity of the Government's statement.

The Minister of Finance reports in his Budget Statement: "There is no question that global competition has had a negative impact on Bermuda's tourism industry.'' Further there is the statement that reads: "The Government, whose own role in tourism has been reassessed will act to facilitate change and to create an environment for success.'' (page 6 of the 1998/99 Budget Statement.

Reality Check: The world is a global marketplace and we are interdependent and thereby affected by what happens elsewhere. In fact, we mentioned last year in our 1997/98 Budget Reply that when the US sneezes Bermuda catches a cold. So we are well aware of the global linkages, but it is an abdication of the role of this UBP Government when it attempts to lay too many of the current deficiencies of our tourism industry at the door of globalisation.

The UBP Government in this Budget Statement has provided only two items of tax relief to this industry: temporary suspension of a 5 per cent duty on refurbishment materials and a reduction of duty on one item of visitor-oriented merchandise -- table linens; neither will significantly impact on the ability of hoteliers and retailers to compete against their global competitors.

The 1998/99 Budget Statement states: "Opportunities for the training, advancement and empowerment of hospitality workers must be pursued vigorously and concerns for job security must be addressed with sensitivity.'' (page 7 1998/99 Budget Statement) Reality Check: We know that opportunities for training, advancement and empowerment of hospitality workers must be pursued vigorously -- but although Government says it they have not done anything to ensure it. Where are the graduates of Government's waiters' programmes announced so proudly during the last Budget Debate? Where are Government's plans to ensure that the terms of hospitality workers' collective bargaining agreements are adhered to? Where is the Government's vigorous pursuit when small hotels refused to sign the collective bargaining agreement ? Where was Government's concern for job security when Club Med workers were let go without backpay or severance pay? The Minister of Finance claims that "The Government understands that the best way to prepare for the challenges ahead is to invest in our people, to give them the skills needed to recognise and seize opportunity.'' (page 10 of the 1998/99 Budget Statement) Reality Check: Returning college graduates too often cannot find appropriate jobs in their related field of study and so often they end up taking their extremely valuable intellectual capital to the United States and other more receptive jurisdictions.

The 1998/99 Budget Statement claims: "Measured by economic growth, inflation and job creation, Bermuda's economy is currently performing very well.'' (page 11 of the 1998/99 Budget Statement) Reality Check: This assertion ignores the plight of the tourism industry, especially retailers, taxi drivers, restaurateurs and hoteliers. The reality is that the 0% duty on capital goods for new and existing guest accommodations will not make up for the 20% decline in occupancy that has occurred over the last 18 years of UBP rule. Neither will it address the extensive lay-offs of hotel workers, which are now occurring even during peak summer season months.

The Minister of Finance states in his Budget Statement: "Last year's Budget was designed to provide significant support to both the tourism and retail sectors while they were going through repositioning exercises.'' (page 13 of the 1998/99 Budget Statement) Reality Check: Hotels received virtually no tax relief and retail stores received very little relief in terms of reduced and/or eliminated import duties.

Mr. Speaker, clearly the UBP falls far short of substantiating its claims to being a Party of prosperity. It is worth underlining the fact that the Government does not use its Members' personal resources, but the tax dollars of each and every one of its people.

The UBP's Minister of Finance, continuing to survey the landscape through his rose-tinted glasses, claims "UBP Governments have brought fresh ideas and creativity to Bermuda's finances without losing sight of their fundamental economic principles: living within Bermuda's means, balanced budgets . . .'' (page 3 of the 1998/99 Budget Statement) As we embark over the next few weeks in a rational debate on the major economic issues the PLP would like for Bermudians to focus on the overall Reality Check of what thirty years of UBP Government has meant for the vast majority of Bermudians and Bemmuda.

Thirty years is far too long. The UBP Government have lacked the commitment to forge a shared economic vision and purpose for the whole of Bermuda. It is not good enough for one leg, one segment of Bermuda's economic sector to advance at the expense of the other. We want both legs to be well-muscled and strong.

The time is long overdue for a change. The PLP would like to encourage an open discussion of the economic problems we will all have to address and the opportunities available to us in order that we may secure a long-term economic future for all.

Our Twin Economic Pillars Our view and our vision is that if the climate is right for international business then this should also benefit the whole of Bermuda. We recognise that the tourism sector is very labour intensive and that is where the majority of Bermudians are employed. Bermudians need to know that they are the top priority. The reality is we need all sections of the community to perform at optimal levels of efficiency, each complementing the other in tandem.

Tourism: Mr. Speaker, nowhere is UBP short-sightedness and mismanagement more apparent than in the stewardship of our most vital industry, tourism. We say most vital because this industry is still responsible for more jobs, directly and indirectly, than any other segment of our economy.

Visitor arrivals during the past year have headed downwards at an alarming rate. Downwards in spite of the fact that after 18 years of UBP complacency a new Tourism Minister was appointed, and the expenditure of over $60 million in taxpayers' funds, including that expended on a new but fatally flawed- marketing and promotional strategy.

The 2.7 per cent decline during 1997 in air arrivals, which are key to the success of our tourism industry, was largely fuelled by an even more dramatic slide during peak tourism months -- nearly 10 per cent during August, for example. This follows a long-term decline of over 20 per cent in air arriving, hotel-staying visitors stretching back over 18 years of UBP rule.

The Government continues to use the increases in cruise ship visitors to camouflage dramatic decreases in air arrivals. The estimated expenditure of vacation and business visitors plummeted to the five-year low in 1996 of $475.2 million for all visitors. Based on the first three quarters of 1997, which show numbers fairly consistent with those of the previous year, one must be concerned if we are truly looking to get more mileage from our tourism marketing.

This decline was underlined by a cumulative hotel bed night decline of 3.5 per cent during 1997 and a dismal 57 per cent large hotel occupancy rate.

Tragically, the percentile decline among small properties, such as guest houses and efficiency apartment complexes, was even more dramatic.

What makes this performance all the more shocking is that consumer confidence in the economy in our key market, the United States is at an historic high and many competing destinations, including some not known for being inexpensive, have recorded their best tourism year ever -- Barbados, for example registered an 8.6 per cent increase in arrivals in 1997.

SHADOW FINANCE MINISTER -- Mr. Eugene Cox.