Cutting the number of consultants and cancelling the upcoming Music Festival are two ways the Government could start tightening its belt in the face of a worsening economy.

And the Opposition recommended axing payroll tax for people earning under $50,000 in order to help families already feeling the pinch.

MPBob Richards pointed to a flagging tourism industry, cooling construction market and a concerned international business community as indicators of an economic downturn something he raised in the Reply to the Budget seven months ago.

Mr. Richards said: "We have rising inflation, slowing business, credit drying up and threatening overseas competition.

"These developments have deepened our concerns not just for the overall health of the economy but for the many working families already caught in a cost-of-living squeeze that makes day-to-day life very challenging."

Mr. Richards pointed to the retail sales index, released yesterday, which showed sales fell 1.2 percent in June compared to a three percent increase in June 2007.

The recently released consumer price index which revealed inflation for June was 4.4 percent, as signs Bermudians have already been impacted by the downturn.

He added that it appears the Government has continued to spend and has put away very little for the lean period ahead.

Asked what he would do right now to tighten the Government's belt, he said: "Consultants would be the first thing to go. The Government has far too many consultants.

"If we got rid of the consultants Government would be able to help pick up the slack from the private sector, but they won't be able to do that if they are up to their eyeballs already."

Opposition MPPat Gordon Pamplin added:"Iwould cut the Music Festival.

"Two or three million for performers is a lot, notwithstanding that it is a great opportunity for Bermudians to see a world class act, and I understand that, but we have to ask at what cost? And we have to ask if now is a good time?"

Mrs. Gordon-Pampin added that the economic downturn was hitting lower income families first and she was concerned nothing was being done to help them.

"Working families need someone on their side," she said. "They need help. They need someone who understands what they are experiencing.

"The Government is the one entity that can provide the help they need, and so we call for a people-first programme to help working families through this tough period."

Currently a person earning a weekly salary of $550 loses $175 in deductions, leaving just $375, or $1,496 per month to spend on food, rent, electricity all of which are rising and other living costs.

She said:"One direct step that can be taken is our plan for a payroll tax break. During the election we proposed eliminating the payroll tax for anyone earning less than $42,000 a year. That would mean up to $1,995 more money for groceries, more money for gasoline, more money for school supplies, more money for doctor's bills and prescription drugs, more money to pay household bills such Belco and Telco.

"We are concerned that Government overspending, even in the face of warnings of a downturn may have compromised its ability to pay for a tax break, but this is where we need to go and so we recommend serious consideration of the possibilities, including raising the break to $50,000."l

For a look at the Oppositions outlook on the economy and its concerns about raising taxes on international businesses see the Business section.