Assembly. United Bermuda Party MPs hit back at claims that the Budget would hurt the ordinary man during debate on Monday night, saying most tax increases were aimed at the wealthy.

Mr. Rick Spurling (UBP) said many employers would share the one percent increase in the hospital levy with their employees.

Citing land taxes that had greater effect on large properties and larger bank fees, as well as increased spending on social assistance and hospitals, he said he did not see how the Budget hurt the average person.

While the Opposition complained about Mr. David Lines' comments that more contract workers were needed, "not long ago (PLP) Sen. Terry Lister said he would like to see another 10,000 non-Bermudians here by the year 2000,'' Mr.

Spurling said.

"Discuss the response,'' interjected Mr. David Allen (PLP). "That's the official view.'' On the relaxation of exchange controls, the $25,000 limit would prevent any immediate outflow of capital that might have occurred.

Investment rates had already dropped in response to the Budget, and "in due course mortgage rates will drop as well.'' Government had made difficult decisions, like moving ahead with the prison and the Tynes' Bay Incinerator.

"If we wanted votes, we wouldn't have made those decisions,'' he said. "What we would have done is probably build the (National) Stadium.'' But making unpopular decisions was "responsible Government,'' he said. Mr.

Stanley Morton (PLP) said it was the responsibility of each Bermudian to contribute to increasing the Island's revenues, but the leaders had "kept the bulk of business marketing involved unto themselves''.

Workers were told that even discussing issues like Independence would drive business away, Mr. Morton said. But the premise of the Budget reply was involving the people.

"We must not be satisfied with crumbs. Crumbs from the master's table? No.

Those days are gone.'' Just as when a baby cried it showed there was something wrong, "when we make noise as representatives of the feelings of the people of the community, we make no apology,'' Mr. Morton said of the Opposition.

The form the hospital levy hike took "pits the employee against the employer'', which was "an underhanded approach'' by Government, he said. Dr.

Saul had tried to depict the Budget as "a sweetheart,'' but "it really gets at the common man again,'' he said.

Steps had to be taken to end the dependency many had on social assistance, and Government should provide instruction to those who applied. "We can use this money in better areas,'' Mr. Morton said.

Mr. Trevor Moniz (UBP) said he agreed with Mr. Morton about ending dependency on Government. He noted Shadow Health and Social Services Minister Mr. Nelson Bascome and Shadow Finance Minister Mr. Eugene Cox had made similar remarks.

But on the other hand, the PLP called for more money to fight drugs, without identifying specific programmes.

"It's easy enough to criticise, but you have to put some meat on the bones of that criticism,'' Mr. Moniz said. "Otherwise, it sounds just like a hollow echo.'' Mr. Moniz said he was concerned about increased Government borrowing. "I would put out a warning,'' he said. "Although it's nice to have all these capital projects and they are very nice for the Country, we must keep a very keen eye to controlling the costs.'' He welcomed the easing of exchange controls, and said the Opposition reply was confused in attacking bank profits but opposing the removal of controls.

Banks had profited from the controls, which they were not subject to, Mr.

Moniz said. Now "the average Bermudian is being allowed to enjoy some economic freedom''.

The PLP were "speaking out of both sides of their mouths'' when they said that the Budget burden fell on those least able to pay, that companies fees should be made more competitive, and that more money should be spent on problems like drugs, all at the same time.

"I think it's obvious to the man on the street that that is impossible,'' Mr.

Moniz said.

Mr. Leon (Jimmy) Williams (PLP) said St. George's needed more help than it got in the Budget. "Maybe I am parish pumping, but St. George's is vitally important,'' Mr. Williams said.

An increase in fuel wharfage fees was needed.

And the town needed more money to pave its streets. He wished Mr. Spurling would have fleshed out how much of Government's $1.8-million road resurfacing programme was dedicated to St. George's.

Changes in Customs duties were a concern, as Bermudians who went overseas would now be subject to 22.25 percent duty on clothing items they had previously paid much lower duty on, Mr. Williams said. "That's quite an increase to the average working man.'' Shadow Labour and Home Affairs Minister Mr. Alex Scott said that even if the recession had bottomed out "the impact on many Bermudians is still very, very real''.

Unemployment figures showed the young had been hard hit, especially females.

"There has to be a rescue effort -- some type of fiscal rescue for those who have been affected negatively by the recession.'' At first blush, it sounded good that the number of work permits had dropped by 4,700 over the last few years. But in many cases, foreign workers had held more than one permit, and in many cases the jobs had been eliminated, not filled by Bermudians.

Many businesses had become leaner and meaner during the recession, and the Budget did not address that as it should have.

He told of a 65-year-old woman who was released without notice by a major Hamilton company after 30 years. Non-Bermudians who lost jobs had "recourse after recourse after recourse,'' but the Labour Ministry left "this dear old lady...out in the cold with no recourse''.

Government had created the appearance of attacking drugs, but "in actual fact, the Government is in danger of generating a committee psychology,'' Mr.

Scott said.

The National Drug Strategy appeared to be one committee on top of another, but the problem areas were "not feeling the benefits of those committees''. Money to fight drugs should be directed to the "street level, not the boardroom''.

People at the National Drug Strategy appeared to have trouble sorting out their personal differences, and if they could not do so, some should be asked to stand aside, he said.

Government's numbers and pie charts were important, but the human element was missing.

Shadow Tourism Minister Mr. Allen described the Budget as "lacklustre''. The increase in Tourism spending was not enough, because it was more than offset by hikes in advertising costs. Bermuda had lost almost 20 percent of its air visitors who stayed in hotels over the last few years, and "there is much ground to be made up'', Mr. Allen said.

Both cruise lines and hotels were discounting massively, so improved numbers last year did not reflect the health of the industry.

Mr. Allen said it dangerous to overstating Bermuda's economic recovery.

"We are crawling back from the bottom of a pit,'' he said.

But he admitted: "At least we are moving in the right direction.'' Mr. Allen said the PLP had helped achieve some of the successes.

He went on to criticise any suggestion of turning the Department of Tourism into a quango.

The department which helped generate half Bermuda's revenue should not be in the hands of a quango, he said.

The Country's fate depended on tourism.

Mr. Allen attacked Government for being "penny wise and pound foolish'' in its bid to attract extra tourists.

He urged Government to be more imaginative and innovative.

Mr. Allen spoke of the need to make Bermuda a better destination for shoppers.

Visitors currently did not come to the Island to shop.

But shopping should become one of the big lures.

Mr. Allen said Finance Minister the Hon. David Saul should have eliminated duties on watches and perfumes.

He went on to call for more to be done for Bermudian entertainers, saying they had been sold short for a long time.

Mr. Allen said incentives had to be offered to reopen night clubs.

"These areas have to be researched.'' Mr. Allen, who became embroiled in fiery exchanges with Tourism Minister the Hon. C.V. (Jim) Woolridge , went on to appeal for greater concentration on "ecological tourism''.

He also argued for a sixth cruise ship.

"We believe we have to project a tourism plan into the next century.'' Mr. Allen said the Country had suffered from "crisis management'' by the UBP Government.

Government Whip Mr. John Barritt opened by saying he would not praise Dr.

Saul.

"The Budget speaks for itself,'' he said.

Mr. Barritt urged people to compare the Budget with the PLP's Budget response.

They would see a document of substance, and a document full of economic platitudes.

"This Government has delivered. The Finance Minister has set out a plan. It's out there for all to examine and scrutinise.'' Mr. Barritt said he appreciated the Opposition's limitations -- they had only a week to prepare a response.

Nevertheless, he would have liked to have seen how the Opposition intended reallocating resources, or raising the funds to underwrite their programme.

Mr. Barritt focused on two initiatives in the Budget -- firstly the easing of foreign exchange controls.

Removing the ten percent overseas investment tax would be a huge encouragement to Bermudians to make their money work better.

"We have got to educate people of the opportunity now being provided to them,'' he said.

Mr. Barritt advised people to talk to investment groups, and people in the know about how best to invest.

The second initiative he concentrated on was the pension plan.

Mr. Barritt welcomed PLP's support of the scheme, and pointed out a pensions commissioner would monitor it.

But on the Opposition's call for an unemployment insurance scheme, he was scathing.

This idea would lead to "institutionalised dependency''. It would encourage people to become skilled at being unemployed and unemployable.

Shadow Environment Minister the Rev. Trevor Woolridge lashed out at any suggestion this was a sweetheart Budget.

There were many people suffering in Bermuda -- and Dr. Saul should take to the streets and talk to them.

He scoffed Premier the Hon. Sir John Swan must have been waiting with bated breath for Dr. Saul to produce a Budget with substance.

He added he had spoken to many people who wished the Cabinet had the skill and talent displayed by the Opposition.

Rev. Woolridge said Government had showed a lack of vision, and demonstrated insensitivity to many in the community.

Government could no longer manage the Country as if it was running an exclusive club.

Deputy Premier the Hon. Irving Pearman described the Budget as "good and timely''.

In contrast, the PLP's approach was to throw money at programmes -- whether social, sporting or environmental.

Mr. Pearman said he had scoured the PLP's Budget reply to see how they intended paying for all the goodies.

How would the Opposition keep the lid on inflation? "Do they have any appreciation of what it takes,'' he asked.

Mr. Pearman said the electorate had repeatedly shown confidence in the United Bermuda Party.

He went on to defend his party's support for the poorer off.

The level of assistance for 1994-95 had been increased.

And a number of initiatives would be launched help people help themselves, said Mr. Pearman.

Maybe Government in the past -- because of the economic climate -- had not done enough to retrain people, he accepted.

But he promised there would be focus on retraining.

Finance Minister the Hon. David Saul said he was intrigued by the Opposition's Budget reply.

In it, there was no indication of how revenues would be raised.

He was also intrigued by a recurring phrase in it -- "You can't turn away from the future''.

The phrase was so trite a 10-year-old would laugh at it, he scoffed.

Dr. Saul went on to highlight other passages in the reply.

The Opposition called for necessary steps to train and retool the work force.

But this is what Government had been doing for the last five years, said Dr.

Saul.

And he challenged anyone to state that the last four Budgets had only benefited a small segment of the population.

"The facts belie that.'' This Budget was for the whole community, said Dr. Saul.

Dr. Saul said the Opposition's comments about breaking old boys' networks and ending conflicts of interest sounded not like "a new beginning'', but like "rhetoric straight out of old-fashioned communism.

"And it worked so well in Eastern Europe, as we know.'' A complete review of the tax system was under way under a Government consultant, Dr. Saul said. The underlying assumption was that the present consumption-based system was proper, and there was no hid den agenda.

Government had also worked with the Commonwealth Fund for Technical Cooperation on a review of the regulation of financial institutions, securities, and the stock market, Dr. Saul said.

"Legislation will be coming forth in due course,'' he said.

Dr. Saul denied ever saying the Budget would be "a sweetheart,'' and noted it was written long before the date for its delivery was changed to February 14 because of the Royal Visit.

"No Budget would ever be described as a sweetheart budget, because budgets by definition are tough things,'' he said.

The two main objectives were to keep inflation down and increase employment.

It was not true to say the Budget hurt the little man. Through faster Airport processing for travellers, progressive land tax, and a national pension scheme, the Budget had "a social conscience''.

Changes in Customs tariffs were designed to help the little man, be he a consumer or owner of a small business, Dr. Saul said.

Exporters would receive 100 percent rebates on all duties paid on imports of raw materials.

Government lost $2.5 million in revenues in revamping the tariffs, he said. It was a long and involved exercise, and amendments would be introduced to correct at least four errors, like one that resulted in too high a tariff on aluminium doors.

Contrary to what the Opposition said, the sharp decline in the number of work permits during the recession had "cost this country dearly'', Dr. Saul said.

The community had lost $300 million, and Government $60 million of that, he said.

The easing of exchange controls had nothing to do with foreign banks coming to Bermuda, Dr. Saul said.

Too many people misunderstood exchange controls and what the Budget changed, he added.

Strictly speaking, the exchange control was the $25,000 limit on foreign investment, and that was not changed in the Budget, he said.

What had been removed was the ten percent foreign currency purchase tax that used to be called the overseas investment tax.

It started in the 1970s as a five percent tax and was doubled just after the second OPEC crisis when overseas interest rates were at record highs.

Now, the interest rates were at record lows, but the ten percent tax had not changed. Until the Budget, "the banks were the only ones in Bermuda who were free from exchange control'', Dr. Saul said. And small investors overseas had always outnumbered rich ones, even when the ten percent had to be paid.

But because of the tax, much of the money earned on the investment was not repatriated.

Even during the recession, in 1992, Bermudians repatriated $85 million earned overseas, he said.

"The Government's thinking is that with the removal of the ten percent, we see looming in front of us the proposition where Bermuda will have a third leg to its economy in the earning of foreign currency.'' Government was encouraging Bermudians to invest for their old age and earn foreign currency for the Island.

The 60/40 ownership rule for local companies was not being changed, and it was "economic stupidity'' to say the changes would result in devaluation of the Bermuda dollar. And Government would be vigilant against money laundering, he said, concluding the debate.

Mr. Richard Spurling Mr. Stanley Morton Mr. Trevor Moniz Mr. Alex Scott The Hon. David Saul.