many ways won it the 1998 Election -- comes through very clearly in yesterday's Budget.

There is nothing wrong with that. Focused spending on education is an investment in Bermuda's long term future, especially as the Island moves into the "new economy'' in which knowledge may well be a country's greatest asset.

For that, Finance Minister Eugene Cox deserves some credit.

The fact that Government has made a commitment to controlling spending is also to be welcomed, although the fact that Government employment levels have increased by 77 people or two percent suggests that deeper cuts could have been made.

But there are also some clear losers in this Budget. Government has said it wants to revitalise tourism and millions of dollars have been spent on marketing the Island.

But meaningful tax cuts which would enable hotels and tourism-related businesses to raise their standards and cut their prices are scant. There have been some adjustments to payroll tax, last year's land tax hikes have been scaled back for commercial properties and the duty on alcohol has not increased.

The major tax concessions that the tourism industry was seeking are not in this Budget. Indeed, the major concession on Customs duty -- which will see duties on clothes containing synthetic materials halved to ten percent but also raises duty on natural fibres from 2.5 percent to ten percent as well -- may do more harm than good.

Overall, Mr. Cox has not dramatically raised taxes and that is good news for an economy where growth is slowing. But to achieve that, he has been forced to borrow.

There is nothing intrinsically wrong with borrowing for capital works; it is akin to borrowing to buy a new car or to buy a house.

Government's debt also remains well within the prudent policy level of ten percent of gross domestic product.

But it should be remembered that Government had no outstanding debt ten years ago and paid just $213,000 in interest. In the coming year, it will owe $193.5 million and will pay its lenders $11.5 million of taxpayers' money in interest.

This dramatic trend began under the United Bermuda Party government for projects like CedarBridge. But it has continued in the last two years and, with Berkeley needing spending of $71 million, there is little evidence to show that it will slow down. That is worrying.

Aside from its laudable commitment to education, it is difficult to get a sense of Government's philosophy. The Budget gives a little bit to one interest and take a little bit from another, but few of the changes seem to be really meaningful.

It is not entirely clear who gains in the end, although the better off will pay more in taxes in 2000 than they did in 1999.

But there is little sense of where the Government wishes to go. The revitalisation of tourism is emphasised, but few incentives for improving the product are offered. E-commerce is emphasised, but there is little additional spending to either train Bermudians or to market the Island. This is a steady-as-she-goes-budget in some ways; but some will wonder if that is the right approach in a global economy undergoing radical change.