by Finance Minister Grant Gibbons in yesterday's Budget.

He told the House of Assembly: "This Government understands that our people are the key asset for economic prosperity in the modern global economy.

"Accordingly, most of the expenditure in this Budget is focussed on people by providing all Bermudians with the opportunity to participate and succeed in the economy of the 21st century.'' But he warned of "predators'' waiting in the wings to poach highly mobile international business and the tourist trade.

More than $475 million will be spent in the coming year out of the Country's current account -- $13.4 million up on 97-98 estimates.

And -- capitalising on growth in the economy -- Dr. Gibbons predicted a $7 million increase on cash coming in -- a total of $511.4 million for 1998-99.

The struggling hotel sector will get a fresh tax break with the extension of a scheme to slash duty on materials and goods to zero from the already-cut rate of 5 percent.

That means construction materials and goods for the development of existing hotel rooms will be duty free -- but only for three years.

And Dr. Gibbons said a hard cash commitment to education and training, access to healthcare and more and better-equipped Police officers underlined Government's pledge.

He added that the increasingly elderly population would have an improved quality of life with a boost for pensions and the development of long-term benefits from the new national pensions system.

And he said extra cash to preserve open spaces and develop parkland, as well as cash for sports and other youth activities through the National Sports Centre would also help guarantee the future for the Island for new generations.

Future investment in Bermuda will be made more attractive with a $7 million handout to the Bermuda Land Development Company, to be used for site preparation for business and residential use.

But more than a third of Government's planned $71.6 million kitty for building and buying property will go on education and health and social services.

And, in addition to a $4 million boost on the budgets for the King Edward VII Memorial Hospital and St. Brendan's, equipment bought out of charity donations to the King Edward will be rated duty free.

A hi-tech incinerator for the King Edward capable of handling hazardous waste safely will get the first $0.5 million of the projected $1.4 million needed.

A total of $3.15 million will go towards a new residential care centre for troubled youngsters and nearly $0.5 million for a halfway house for inmates set for release from the prison system.

The National Drugs Commission will be allowed an extra $550,000 -- a 46 per cent increase on 97-98. The cash will be used to set up a drugs court and support the Salvation Army Drug Rehabilitation Programme.

And schoolchildren will be encouraged to pack their own personal computer, with a massive reduction in duty on machines sold through schools to youngsters.

FOCUS ON BUDGET '98: Budget for `people, tourism' A $1 million injection to the Aquarium's plan for an education and general services building also gets the go-ahead.

The same amount will be allocated to complete renovations to the National Stadium's running track -- regarded as "vital'' to youth development.

And $1 million will be handed to the Works and Engineering Ministry for the Pembroke Marsh park plan, while an additional $1 million in Environment Ministry cash will go towards buying open land.

The so-called `sin taxes' on alcohol and tobacco were ignored in this year's Budget.

But there was bad news for Government workers, who face a $19 a week hike in their Health Insurance Fund from April 1. That will be matched by Government, bringing an additional $1.69 million into the Accountant General's coffers.

Government fees -- covering 60-plus items from marriage licences to passports and work permit fees to driving licences -- will go up by 4.5 per cent -- an expected total of $1.2 million in additional revenue.

And international company fees will go up from between 0.89 percent to 6 percent -- adding $1.3 million to the 1998-99 spending power of Government.

But support for the marketing of international business will also go up, with an extra $750,000 earmarked for marketing and promotion.

Income from tourism will also increase as cruise ships will pay a new tax of $8 per cabin while berthed in Bermuda -- expected to generate $1.6 million in its first year.

But the tax will operate on a seasonal scale, going down to $4 from September to October and generally set a zero between November and April.

Other minor boosts for tourism include no registration fees for paddle-powered boats like canoes and pedaloes and a cut in duty on luxury linen tablecloths and accessories.

And travelling around the Island for tourists and locals -- a problem identified by the Monitor Group tourism survey -- will become easier with the same annual licence fee for mini-buses operating approved services as for taxis.

Seven new buses will be added to the PTB fleet, at a total cost of $2.4 million.

The Island farming industry will also enjoy zero duty on parts for tractors and other agricultural equipment.

Plans to celebrate the new century in style will also get a leg-up with a total of $1 million allocated in the next two years to a special Millenium Fund, which will be available to Government and private projects.

The Tall Ships 2000 Race will get also $67,000 in funds allocated to the Ministry of Tourism as preliminary cash to establish a Port Committee and produce brochures.

Dr. Gibbons -- in his last Budget before the General Election -- said that Bermuda enjoyed an enviable lifestyle.

He added that unemployment levels were low and inflation had hit a record low of 1.8 per cent last year.

And Dr. Gibbons said Bermudians continued to make good use of the fair economic winds.

He added: "Significant increases were achieved in the number of Bermudians employed in professional and managerial positions as well as those earning college degrees.'' Dr. Gibbons stressed that there were no new domestic taxes contained in the financial blueprint for the coming year.

And he predicted the real Gross Domestic Product would continue to grow at around the same rate of 3 percent as 1997-98.

He put down the current year's growth to a thriving international business sector -- which accounted for almost half Bermuda's foreign exchange earnings in 1996-97 -- a boom in construction and Government expenditure on goods and services.

But tourism arrivals dropped by 1.7 per cent in 1997 compared to the previous year, although the figures from August showed improvement on 1996.

Dr. Gibbons said, however: "As the various product and marketing initiatives to revitalise tourism are implemented in 1998, it is hoped this improving trend will continue.'' He added the retail sector also showed a better performance over 1996, especially over the latter half of the year.

But he warned that the challenges of a global economy left no room for complacency.

He said: "First, this Budget will assist in preparing Bermudians to grasp opportunities and meet the challenges presented by globalisation.

"Second, it will provide an adequate social safety net to ensure security, to promote health and to care for those least able to help themselves.'' But Dr. Gibbons said the kind of prosperity in Bermuda was not an accident -- but the result of "30 years of "consistently sound economic stewardship'' by the United Bermuda Party and "the vision and determination of Bermudians to succeed.'' But he said the Island's service economy would increasingly need a strong grasp of "economic foreign affairs'' or "commercial diplomacy'' to negotiate economic and regulatory issues with international bodies and governments.