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For nearly a year, the United Bermuda Party has been urging the government to prepare the country for the possibility of an economic downturn.

In February's Budget debate, we pointed to a variety of dangers facing the economy. Our Shadow Finance Minister, E.T. (Bob) Richards, told the House of Assembly:

"Mr. Speaker, the evidence is clear, the U.S. is headed for a period of either slow growth, no growth or contraction, and will drag the global economic growth rate down with it. Bermuda does not operate in a vacuum, indeed the Bermuda economy is more dependent on outside economic and regulatory factors than any other country I can think of.

"Therefore, it is critical that Bermuda and its Government should adjust its plans, its strategies and its spending habits based not only upon local needs, but also on the imperatives of the global economy.

"Mr. Speaker, there is no evidence that this budget takes the threatening international economic storm clouds into account. It blithely continues the spending spree of recent years despite the real possibility of revenue shortfalls as a result of a weak U.S. economy."

Ideas ridiculed

Since that statement, Mr. Richards and other United Bermuda Party spokesmen on economic matters have been consistently ridiculed by Progressive Labour Party spokesmen. Here is one example from the PLP website dated August 20:

"Quick, someone get down to Horseshoe and pull Bob Richards' and Pat Gordon-Pamplin's heads out of the sand! Despite their dire predictions, Bermuda's IB sector continues to prosper even in a difficult international economic climate."

The point here is not to say "We told you so," but to say that the government has shown little willingness to confront emerging economic realities. Bermuda needs a government with both hands on the wheel in these dangerous times. What we appear to have is a government asleep at the wheel. We expect something more helpful than the Finance Minister's statement last week that economic situation could have "some employment repercussions in Bermuda."

The Finance Minister should be moving forward with a plan to help the island manage the effects of downturn. The Minister, in the broadest sense, should be looking at ways to bring government's spending spree under control and help people get by. These could include measures such as:

Cutbacks in non-essential government spending. Government needs to increase its flexibility for potential increases in demand for social services.

Cut payroll tax

Programme initiatives to help lower-income families. In this, we reiterate our call for a payroll tax cut for the lowest income earners. This is one step that can give people more dollars in their pocket to spend on basic goods from gasoline and food, to electricity and schooling. As we get deeper into a downturn, the cost pressures on individuals and families will increase. The government needs to be on their side.

Beyond these measures, the government should meet with business leaders to sharpen its understanding of the strains on local and international business, particularly with a view to ensuring the continuing employment of Bermudians.

Lastly, we must register our disappointment that the government did not adjust the tourism marketing budget earlier this year. The combination of a lack of sufficient, targeted weight in key markets combined and the ill-advised summertime reorganization of our North American sales operations all but destroyed the 2008 tourism season.

It is time for the government to heed the warnings that are all about. People need to be assured their government is going to provide responsible, steady leadership in tough economic times. For many, the tough times are already here.

Kim Swan is the Leader of the United Bermuda Party.

Editor's note: A request was made to the PLP to submit a column on the same subject, but we did not receive confimation that a column would be forthcoming by press time. We hope to be able to run a PLP column on the economy next week.[[In-content Ad]]

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