The bid to create a semi-private Tourism Authority to take over many of the functions of the Department of Tourism is an admission of failure. We note that the Finance Minister in his statement does not dare to make any projections on increases in tourism -- after the failure to deliver on the 25,000 visitors set as a goal two years ago. There must not be any dilution of the accountability to Parliament for the stewardship of an industry that is the largest provider of employment and one of the two largest generators of revenue in Bermuda. We believe a restructuring of the existing Tourism Board is a more appropriate approach than yet another quango by another name.

Mr. Speaker, in his Budget Statement the Honourable Finance Minister alleges that "global competition has had a negative impact on Bermuda's tourism industry'' but clearly many of the problems have been of Government's own making, notably the heavy tax burden they placed on hotels and other components in the hospitality industry, resulting in a marked lack of price competitiveness. The significant increase in hotel occupancy tax two years ago is one example of such a burden.

If we do not have financially viable hotels, we cannot have a healthy tourism industry. If our hotels do not succeed, our Bermudian employees and entrepreneurs in the hospitality industry cannot succeed. The fact that we are now witnessing staff lay-offs even during peak summer months, when occupancy levels have fallen below the 70 per cent stipulated in hotel-union agreement is stark testimony of this.

Once again in this year's Budget Statement, the UBP Government pleads that it will create "an environment for success'' for tourism. However time has already run out.

It has lost the confidence of Bermudians in this regard.

The words of this UBP Government sound especially hollow when it states in this Budget statement that "the training advancement and empowerment of hospitality workers must be pursued vigorously and concerns for job security must be addressed with sensitivity.'' Where has the "empowerment'' been in terms of upward mobility in an industry where we do not see one Bermudian in the top management position of any of our major resort hotels? Where is the "sensitivity'' when we see the UBP Government turn a deaf ear to the pleas of workers at the former Club Med who have been unceremoniously terminated without back pay and severance pay owed? Where is the "job security'' when Government fails to ensure that a number of medium sized hotel properties sign the collective union agreement as large hotels already have? The UBP Budget Statement declares that "delivering a product that attracts the new global customer must proceed without delay'' -- but it was deaf to earlier PLP calls for just that ten or more years ago. Also the UBP Government was deaf to earlier PLP calls to develop special niche tourism markets such as scuba-diving, cultural and eco-tourism, all of which are being echoed by Monitor now.

Mr. Speaker, it is tragic how much time has been wasted by the UBP Government -- tragic for laid-off workers and entertainers, tragic for under-employed taxi-drivers and shopworkers.

The concessions provided to our hotel industry in the 1998 Budget are too little, too late ... a single lonely import duty on hotel refurbishment materials.

Mr. Speaker, a PLP Government will take firm and meaningful action to provide real tax incentives and real help to an ailing industry, including: Adjustments to the Hotel Occupancy Tax geared to the seasonal nature of our visitor industry.

Incentives to encourage the restitution and expansion of hotel night-club and entertainment facilities, and the employment of Bermudian entertainers.

Adjustments to other taxes affecting our visitors directly or indirectly, again taking into account the seasonal nature of our visitor industry (i.e.

lower taxes and fees during the winter and shoulder season months, including passenger head taxes).

Additionally a PLP Government will: Encourage hotels to offer expanded family-oriented facilities and activities to reverse a decline in Bermuda's popularity as a family vacation destination, particularly during the peak summer months.

Allocate greater resources to the Department of Tourism's overseas on-the-ground sales force to increase Bermuda's sales presence in the marketplace.

Form a full-scale meetings and conventions division within the Department of Tourism, mirrored in all of its overseas offices with a view to greater coordination and support of private sector efforts in this important market, which has recently shown some softness.

Place greater focus on important niche markets, in both North America and Europe, including, for example, scuba-diving, deep-sea game fishing and other soft adventure sports.

More aggressively promote Bermuda's potential as a cultural tourism and ecological tourism destination.

Increase marketing to diverse ethnic markets, particularly in North America, including the growing African-American and Hispanic markets.

Foster direct non-stop air service from areas where this does not currently exist, and key competitors have a decisive marketing advantage, i.e. The US Midwest, as well as a one-stop service from the US West Coast.

Establish a sixth cruise ship for Bermuda which will call on weekends only and utilise local infrastructure currently under-used during half the week.

Provide greater assistance to small Bermudian guest properties in marketing themselves so as to arrest the decline in the number of these properties to date, including more than 15 closures.

Customs Duties: As a measure to promote Bermuda as a shopping paradise, previous Budget Statements provided that import duty on leather and other selected apparel items be reduced. These include reductions in customs duties for key items such as leather articles, natural fibres, and imitation jewellery. To further encourage the promotion of domestic sales, it has been proposed by retailers that Government replace the customs duty with a point of sale tax, which would help to alleviate the up-front tax burden on retailers, paying customs duties before any sale of merchandise has taken place.

Retailers have aggressively promoted this idea and should have been given a chance much sooner, to demonstrate how such a system could work. Is it too late? Are we only seeing the beginning of heavy discounting of merchandise in an effort by retailers to break even? Are we likely to see further store closures and Bermudian jobs lost because the UBP Government has been too slow to act and too insensitive to listen? I doubt that the retailers can survive another year, let alone five more years of UBP Government neglect, but will they learn? The Budget statement implies that almost all problems relative to the tourism sector can be attributed to globalisation. We in the Progressive Labour Party would infer that those same arguments can be applied to the difficulties facing the retail sector. In light of that fact, Government should have considered further amendments to import duties on consumer durables. This would assist the retailers so that they can better compete for the consumer dollar in the global marketplace. Adjustments or removal of duty from a truly wide range of visitor-orientated merchandise would help to establish Bermuda as a major duty-free shopping venue, and restore the lustre of our reputation as a value-oriented and quality shopping destination.

International Business Evaluation of Company Fee Structure: The 1998/99 Budget introduces increases in annual Government Fees ranging from 0.9% to 6%. One of the key areas affected is the annual company fee. These fees are charged to all companies whether exempted or local and is levied on a company's assessable capital as at 31st December.

Fees have generally been increased every two years to accommodate for inflation, and as we continue our search for international business opportunities, we see the cost of doing business in Bermuda rising once more.

An informed Government would recognise the need to maintain sustainable growth and to increase investment, productivity and competitiveness with other jurisdictions looking to reduce our market share for international business.

Complacency and insensitivity to the ebbs and flows of the market for international business can lead to lost market share.

Government turned a blind eye to the signs of a declining tourism product.

Have we not learned from the mistakes of the past? We have a solid infrastructure, and a wealth of intellectual capital. Yet our costs of doing business in Bermuda compare unfavourably with some of our closest competitors.

Political Stability and Bermuda's Regulatory Environment: The regulation of the financial services industry should promote well-regulated efficient and honest markets so as to better maintain confidence in the financial services sector both domestically and internationally and to promote investor and consumer confidence.

"Financial systems are the leavening that makes the rest of the economy rise.

So the country that improves the efficiency of its system by introducing greater competition should be viewed not as having made a damaging concession, but as having invested in the growth of all segments of its economy.'' -- Peter Sutherland, Chairman and Managing Director, Goldman Sachs International, London.

Changes have recently been announced with the signing into effect by ministerial order of new collective investment scheme regulations. Bermuda is seeking to position itself so that it can offer a more streamlined way of doing business. It is interesting to note that one of our competitors who was seen as out of our league -- the British Virgin Islands has already passed legislation which streamlines its categorisation of mutual funds.

Another example of where the UBP Government has failed to act on a timely basis has been in the insurance industry and the delayed imposition of protected cell legislation in the general insurance legislation. This is a very attractive feature for Rent-a-Captive facilities and long-term insurers writing annuity business. Currently companies interested in this feature must avail themselves of a Private Act of Parliament, which not only increases the timeliness of the incorporation process, but adds to the cost of doing business in Bermuda. Once more at least one of our competitors, Guernsey, has already enacted protected cell legislation in their general insurance legislation. The UBP Government must be mindful that we operate in an extremely competitive international business environment and he who wavers gets left behind.

Proper Economic Forecasting and Long-Term Planning: The PLP considers that the long-range planning process needs to be dealt with in a structured, more formalised manner, to promote stability, and to achieve high and steady levels of growth. For instance, recent events on the international scene including the Dependent Territories Conference, highlight the need for proper long-term planning. Rather than just ad hoc shuttle diplomacy, we need to establish a formalised policy unit with formal briefings and consultations between the Government, the Opposition, and those likely to be most affected in the various economic sectors. For instance, the Chamber of Commerce, BIBA, the banking community, the trade unions and the small businesses. This encourages informed participation and an ongoing dialogue by those most directly affected. The Government has a critical role to play and must take the lead in finding solutions to balance the various needs of the business community.

International Affairs and Bermuda's Role: In this Budget Statement, the Minister of Finance stated that Bermuda's fortunes will depend on our conduct of economic foreign affairs. He is right.

In our view and as stated in our submission to the British Government for the Dependent Territories Conference we wrote: Bermuda is self-supporting -- a dependent territory which does not receive a financial subsidy and which succeeds without any grants from the UK. This position should be acknowledged by the UK Government.

The UK Government has already demonstrated that it is prepared to allow Bermuda to negotiate some bilateral commercial contracts. This position should be continued and consideration given to allowing Bermuda to negotiate certain aviation agreements.

While it is not uncommon for the UK, as Administering Power to impose certain legislation on Bermuda (like the Proceeds of Crime Bill) the UK Government can also provide tangible incentives to do business in Bermuda by negotiating bilateral treaties which better position Bermuda to take advantage of opportunities in structuring investments in the merging markets and which would help to enhance Bermuda's international standing as an offshore jurisdiction.

In addition, the UK Government can promote legislation which is viewed positively by the financial services industry and which can help enhance Bermuda's balance of payments.

The Bermuda Progressive Labour Party recommends that the UK Government acknowledge Bermuda's self-sufflcient status and enhance this ability by granting Bermuda the right to negotiate certain bilateral commercial contracts; by promoting Bermuda-friendly legislation and by the inclusion and participation of Bermuda on a more structured basis in international conferences and organisations.

That was a brief extract from our submission which was reprinted and included in the House of Commons Foreign Affairs Committee Dependent Territories Review: Interim Report. The PLP's submission in its terms of reference focused on the following areas: The Immigration Status of Bermudians: (a) as foreign students, and; (b) job training/work experience in the UK; The Benefits which should be made available by the Administering Power to Dependent Territories; The need for Constitutional Reform, and; The Available Options for Dependent Territories: (a) Modified Observer Status, and; (b) Limited participation in UN Committees.

We note that unlike the Bermuda Progressive Labour Party, the UBP Government made of reference in their very brief written submissions to the need for the UK Government to give consideration to the needs of Bermuda's financial services industry. This omission is extraordinary especially given the significance of the scale of changes which are now being proposed by the UK Government and the impact which any such changes could have on our international business sector. The PLP, unprompted, raised the issue of the need to consider the impact on Bermuda's financial services industry of the UK Government's review of the position of the Dependent Territories.

The Rt. Hon Robin Cook, UK Foreign Secretary in his speech to the Dependent Territories Association outlined the broad parameters of the UK Government's thinking in redefining the relationship between the Dependent Territories and the UK Government. In setting out the framework of this new partnership special emphasis was placed on the need for fiscal regulations.

The Foreign Secretary in commenting on the need to stay ahead of money launderers stated: ". . .we want all Dependent Territories with financial sectors to put in place measures that will give them the highest standards of regulation, the strongest possible guarantees that these measures will be effective, and the structures to allow the Dependent Territories themselves to make them work.'' The two key measures which he advocated were: "a comprehensive set of financial legislation to the highest international standards'', which would be in place by the end of 1999, and as the second element, every dependent territory with a financial services industry must have the structures in place to regulate the industry effectively.

The handwriting is on the wall as to the UK Government's stringent requirements. Our task as members of the legislature is to ensure that Bermuda's interests are fully represented. In fulfilling that role we must not allow ourselves to be railroaded without a proper consultative process both locally, with the relevant interested parties, and internationally.

International business is one of the twin pillars of our economy. That of necessity requires that there is serious consideration given to any significant projected changes that may impact on the way we conduct business in Bermuda. Mr. Cook has indicated in his speech at the meeting of the Dependent Territories that there may be far-reaching ramifications over the next few years that will affect Bermuda as a result of its constitutional status with the United Kingdom. There is a need to keep a watching brief and to monitor the situation so that we can ensure that our interests are properly represented.

Immigration, Labour, Home Affairs and Public Safety Job Opportunities: Removing the Impediments to Fair Competition: A Progressive Labour Party (PLP) Government will make Bermuda work for its' People and in turn its' people will work for Bermuda. A Government must, unlike the UBP, believe in its' people and support them with their economic policies. The Finance Minister in his 1998 Budget Statement invites the House to look back over, and review the UBP Government's stewardship -- those past three decades. Let's just reflect at these last four to five years. More and more young Bermudians are receiving their first income cheque from social assistance and not from a first-time employer.

The Progressive Labour Party reported in the '94, '95, '96, and '97 Budget debates that between 1982-1991 Bermudians began to lose and contract workers gain job share -- in the economy. "The Report of the Premier's Task Force on Employment'' made it clear that Bermudians employed and seeking employment in the hospitality industry were in trouble. The report revealed, "The Hospitality industry has been de-Bermudianised to some extent between 1982 and 1991 the percentage of Bermudians holding jobs in the restaurant industry fell from 77 percent to 59 percent and the number of Bermudians holding jobs in the hotel industry fell from 76 percent to 71 percent.'' The PLP's view is that the systems of controls to monitor the employment trends in our most labour intensive industry, tourism, were not adhered to.

Clearly the hand-writing has been on the wall for a long time, as demonstrated above through statistics which were released in the early eighties.

Bermudians continue to lose jobs when businesses fail, and despite the Minister's fiscal sleight of hand, restaurants, retail stores, hotels and even long established law firms have closed their doors. Downsizing and mergers of companies in an effort to boost profits and maintain competitiveness has also resulted in a number of Bermudians losing their jobs.

The Finance Minister says, "The urgent task ahead is to position Bermuda to take advantage of rapidly expanding opportunities for economic diversification and growth, while minimising our vulnerability''. Conspicuous by its absence is any mention of how Bermudians will benefit and service this expansion. The Budget Statement declares that Government sets a high priority on the training and re-training of adult workers to provide the greatest opportunity for full participation in our economy, yet the UBP Government's record suggests otherwise.

About four years ago, after continual pressure from the PLP, the Government decided to finally address the question of re-training and a review of the operation of the Government Employment Office was undertaken. The results of the Government-training programme, a project overseen by this office, begs the question of just how many Bermudians have actually been trained by this initiative over the years?