Let me start by saying that the construction of the 2005/6 Budget certainly enhances Minister Cox´s reputation as a thoughtful and able Parliamentarian. In a number of interviews prior to the Budget we expressed the view that we expected little change in relation to matters that directly impact International Business, as in the normal course of events we would have been consulted and fore-warned if this was to be the case. I am glad to say that our expectations turned out to be accurate and that the Minister has given due regard to the organic growth within the industry and has, thus, avoided any substantial tax increases.

It is certainly good for International Business that Payroll Tax rates and Salary Caps are being maintained at their current levels and it is also pleasing to note that further work is being done on the tiering of Payroll Tax rates in order to assist small businesses, both within and outside the International Business sector. Small businesses are the lifeblood of any economy and once again it is good to see that the Budget gives this due recognition.

We are also encouraged by the Minister´s comments on the independence debate where she encourages an open dialogue from all stakeholders. ABIC continues to believe that this dialogue will proceed in an open and healthy environment so that Bermudians are in possession of all the facts when they come to make their own personal decision on this issue.

The increase in GDP by 3% is certainly positive but we note that the rate of inflation in Bermuda continues to be higher when compared to the U.S.A., our principal trading partner.

We note with interest the increased number of jobs in the International Business sector, which showed a 8.3% increase to a total number of 4,096. This is extremely good news, as the majority of those employed in International Business are Bermudian, and International Business has shown over the last few years that these jobs are here to stay.

We note the various allocations in Government expenditure and can certainly lend our support to the concept of zero-based budgeting in all areas and also specifically support the continued increase allocated to the Education Department. It is imperative, however, that Government seeks to receive value for money in relation to this expenditure and continues to take all steps to increase productivity and efficiency across the board. ABIC has always had a concern at the high cost of government in Bermuda and we continue to believe that this should be a strong focal point for Government.

We also note the increase in the statutory debt ceiling to align with the debt policy limit, and trust that the flexibility provided by this increase will be used carefully.

In closing, I think I speak on behalf of my colleagues in saying that this is a Budget that will be well received by the International Business sector, which looks forward to continuing its important contribution to our economy.

David Ezekiel,
Chairman