Finance Minister Grant Gibbons yesterday stamped on an Opposition claim Government was facing a cash crisis.

"The comments are irresponsible and not based on facts,'' he said.

He added: "There is certainly no cash crisis in Government. Our revenues are coming in where we would expect to see them.

"We are on target and there is no shortfall with Government funding. We are tightening our belts, but that is true of the private sector as well.

"Over the last four years we have been trying to encourage more efficient management of department resources.'' Allegations of a cash crisis were made by Shadow Health Minister Renee Webb, who demanded greater efforts to make up the shortfall from the overseas military Bases' pullout.

"We have to look at diversifying our economy -- or otherwise we are talking about serious taxation,'' said Ms Webb.

She spoke out following reports King Edward VII Memorial Hospital was $2 million in the red, with its budget hit by spiralling costs.

Ms Webb said the hospital's problems reflected a wider cash crisis in Government.

"There seems to be a shortfall with Government funding.'' Ms Webb urged Government to find ways of being creative, adding: "They put extra money in the Tourism budget and that has failed. We have to look at ways of diversifying the economy.'' Yesterday, however, Dr. Gibbons rejected reports the hospital was in the red.

"There seems to be some misunderstanding. I've spoken to the hospital and it is not $2 million in the red. It is operating with a modest surplus.

"It is fair to say there are expenses up over what they budgeted but so is their revenue up.'' Dr. Gibbons also attacked Ms Webb's claim tourism figures were down.

He stressed, at the end of the last week, air arrivals were three percent up and the number of cruise ship passengers had risen by 9.5 percent.

"Ms Webb is clearly incorrect in what she is saying on tourism.'' Dr. Gibbons went on to answer Ms Webb's charge that the hospital levy was a general form of taxation and should be renamed.

He said the hospital levy no longer existed by itself. It had been incorporated in the employment tax to form the new payroll tax.

"This was approved by the House of Assembly and Ms Webb should have been aware of this.'' Dr. Gibbons said departments were given $17.5 million in new money in the 1996/7 Budget.

He said the $52 million lost from the Bases was not a shortfall to Government.

The Bases provided foreign currency earnings -- not money which went directly into Government coffers.

"This was foreign currency coming into the economy as a whole. Government would have benefited indirectly from foreign currency earnings, such as through Customs duty and payroll tax.'' Dr. Gibbons agreed with Ms Webb on the importance of diversification of Bermuda's economy. But stressed Government was examining this.

"Clearly, that is what a lot of debate on the Bases was about. We've had a number of proposals looked at by the Land Development Company.