Sister Islands MLA Moses Kirkconnell said Caymanians should embrace the self-sufficiency of their ancestors as a way of overcoming the rising costs of living in the Cayman Islands.
Speaking during his contribution to the budget debate on Monday, Mr. Kirkconnell suggested two initiatives that he said could make Caymanians more self-sufficient and have a significant impact on the cost of living.
For one, Mr. Kirkconnell suggested a programme of financial counselling services that would teach Caymanians how to budget and spend money was needed.
‘It is important for everyone to be financially literate, but it is most important for those earning the least,’ he said.
‘Many families even with good salaries get stuck in a path of debt and not on a path of asset building.’
If people do not curtail their spending to fit their budget, nothing would help, he said.
Mr. Kirkconnell also called on the Government to address the high cost of borrowing by way of the Cayman Island Development Bank, which he said was originally established as a way of giving Caymanians upward mobility.
By becoming too concerned about upward mobility in the workplace, Caymanians were putting their destiny in the hands of others, he said. Instead, they should concentrate on hard work and Christian values.
Mr. Kirkconnell said there had been a downward cycle of deterioration of independency and hard work in the Cayman Islands.
Home ownership was a key element of independence, he said.
‘We need to have a nation of homeowners, not a nation of home renters.’
The Cayman Islands Development Bank could help many Caymanian families that earn $40,000 or less by offering loan consolidation facility.
Mr. Kirkconnell gave the example of a family that had a $100,000 mortgage, a $20,000 car loan and $5,000 on a credit card bill. Based on average interest rates, that family would be making payments totalling $1,710 per month.
‘This is a very real scenario,’ he said.
However, if the CIDB were to offer a $125,000 loan at rate of two over prime, the resulting loan payment would only be $1,248.
‘That individual would have $462 more in their pocket each month to save or spend,’ he said, adding that the savings would amount to $5,544 per year.
The benefits of such an initiative were clear, Mr. Kirkconnell said, noting that it would result in a stronger middle class.
This initiative, if adopted, would not require any funding or legislation, but it would require everyone to take responsibility.
‘Government has to do what it can do and the individual as well,’ he said.