On Friday, the residents and businesses of this country will find out the price for the Government’s ambitious spending plans.
The 2006/07 Budget will include $25 million of additional revenue measures, which are necessary to help pay for a variety of capital expenditure projects.
Although it hasn’t released any details about the budget yet, the Government has indicated it was mindful not to have its revenue measures increase the costs of the essentials of life to the residents of this country.
This apparently means we shouldn’t expect increases in import duties on food, clothing and gasoline. It also means that businesses are likely to get hit the hardest.
We must keep in mind, however, that no matter who has to pay, we will all feel the effects of revenue measures in some way or the other.
If lawyers and accountants have to pay more in fees, they will most likely raise their fees to compensate for those increases. If a supermarket chain, restaurant or clothing store needs the services of a lawyer or accountant, it will have to pay more for those services, and as its cost of doing business goes up, so will its prices.
In the end, we might all pay a little more to live here in the future.
What is important, however, is to look at the reasons for the revenue measures, which include, among other things, new schools, new roads and more assets for the police.
These are all things the People’s Progressive Movement promised during its election campaign, all part and parcel of the manifesto it used to sweep into power nearly one year ago.
The PPM promised progress that included better public educations, less traffic jams, and a safer community, and now it’s following through with those promises. No government can create roads and schools, or give the police the assets they need without money. There is, after all, a price to be paid for progress.
On Friday, we’re going to find out just what that price is.
With such a low tax base, raising government revenue is not easy in the Cayman Islands. Borrowing is part of the equation, but there are proscribed limits to how much can be borrowed. The government must then achieve a delicate balance in raising the additional funds to complete its promised projects, without chasing away or closing businesses, and without making it too difficult on the lower and middle classes to survive.
Friday will start a key stage for this government as it unveils its plan to achieve that delicate balance.