General Election defeat, but the former Government still knows a thing or two about putting together Budgets.

Shadow Finance Minister Grant Gibbons produced a devastating critique of the Progressive Labour Party's "first real Budget'' on Friday.

In his Reply, which was printed in full in Saturday's newspaper, Dr. Gibbons encapsulated the problems with Government's financial plans for the year.

Faced with an economy in which tourism is continuing to decline and in which international business expenditure slumped from an average increase in spending of 16 percent per year to one percent, Dr. Gibbons said the Government has decided to spend and then spend some more.

The increase in spending will be paid for in higher taxes and from increased borrowing, resulting in interest payments which would cover the expenses of the Ministry of Youth and Sport.

Little or nothing has been done to assist tourism, while international business has been hit with tax hikes and increased regulation.

A year ago, Dr. Gibbons said, many observers were relieved when the PLP's first ever Budget was announced. Today, "the community is no longer relieved.

The mood is uneasy. Self-indulgent Government spending at taxpayers' expense irritates the people of Bermuda.'' Government members and supporters will be quick to point out that some of the spending stems directly from UBP policies.

The new Berkeley Institute was promised under the old Government and borrowing increased on the UBP's watch in the 1990s.

But the UBP can show that it was narrowing the gap between revenue and borrowing and the UBP also points out some of the opportunities which have been missed in the last year, such as fixing interest payments on debt which could have saved the Country $3 million a year.

Dr. Gibbons' most telling point concerns the state of the economy. He concedes that if you walks the streets of Bermuda today, things don't look so bad: New cars abound, homes are being renovated, new businesses and jobs are being created and residents spend and travel abroad in increasing numbers.

But he makes the point that this spending is being driven not by the only two foreign currency earners -- tourism and, far more importantly, international business -- Bermuda has, but by the construction boom and consumer spending.

Both will come to an end without foreign currency earnings.

The question the Government must answer is what happens if growth continues to flatten? What will put food on Bermudians' dinner tables and a roof over Bermudians heads if an increasingly uneasy international business sector stagnates and tourism continues to spiral downwards? Borrowing and higher taxes will only pay Government's debt for so long. At some point, in Dr. Gibbons' words, Bermuda's people will pay, and pay dearly.