The government is faced with a huge deficit, which requires immediate and decisive actions.
Government must have adequate funds to run the country and fulfil its financial obligations. McKeecva Bush, Leader of Government Business and Minister of Finance, said it well when he publicly appealed for suggestions as to how best to obtain the necessary revenues to reduce the deficit. Mr. Bush recognises that good and workable ideas and suggestions often come from the average citizen.
It is very clear that the British government (which has ultimate responsibility for these Cayman Islands) is reluctant to give a ‘helping hand’ to bail out its Overseas Territory at this time. Well, so be it.
Before any consideration can be given to obtain revenue through various possible means of taxation such as property tax, income/payroll tax, sales tax, and value added tax, government must drastically reduce its spending where necessary. This can be accomplished by thoroughly examining all government projects/programmes to ascertain which ones are effective and which ones are ineffective.
One area that should definitely come under close scrutiny is the amount of vehicles that are owned, rented, or leased and operated by the government and justification of usage. Also, whether vehicles assigned to government employees for on-the-job use are being used solely for official business. The sky is limit for vehicle maintenance, repairs, insurance, and running costs.
In these tough economic times every area of government spending must be thoroughly examined. Some of us have observed the irresponsible manner in which garbage trucks are operated. For example, there is a certain driver who seems to delight in unnecessary engine revving and drives ‘hard’ between garbage pick-ups requiring hard braking to stop. Such driving uses unnecessary fuel and causes unnecessary wear and tear on the vehicles. The Department of Environment needs to address such situations. There may be other instances of reckless and costly operation of government owned vehicles.
Another area of government spending where considerable savings can accrue is in government- owned, rented, or leased buildings and the use of utilities. Energy saving lighting fixtures should be installed (if not presently so), implement water conservation methods and restrict excessive telephone usage. Appropriate action taken in these areas can drastically reduce overhead expenditures. An audit could also be done to determine whether consolidation of building space is feasible, and if so, sublet any vacant space to derive needed revenue.
To finance government debt, the government must borrow the required amount of money and pay the interest thereon. Government cannot sustain huge deficits; hence every effort must be made to reduce it to tolerable levels, to be re-evaluated periodically to keep spending more in line with revenues.
To obtain additional revenues through one any of the aforementioned taxation categories should be an absolute last resort and only if efforts to reduce spending and eliminate waste fail to meet objectives. Taxation revenues require detailed studies to determine levels of taxation, who or what is exempt and the effect yield. Also, there must be applicable laws to deal with people who cheat and fail to comply.
The current worldwide economic recession brings stiff challenges to respective governments. I applaud Mr. Bush and his efforts to slow spending, to kick-start the recovery process.