CITA suggests privatisation

Hopes Government will make changes

The Cayman Islands Tourism Association wants to see government return to its primary purpose of running the islands and part from some of its non-performing, heavily subsidised operations.

Ms Christian

Ms Christian

The tourism association submitted its proposal of solutions to the current financial crisis in response to the Leader of Government Business McKeeva Bush’s request for recommendations from the private sector.

CITA President Stephen Broadbelt sent a letter outlining the recommendations on behalf of the association’s board of directors, representing 200 private businesses in the tourism industry.

The letter suggested the government needs to exhaust all long-term cost cutting measures and identify functions which can be discontinued to reduce costs before taking any action that would increase the cost of doing business and increase the cost of living.

‘Government should consider divesting of some of its non-performing, heavily-subsidised operations where the needs may already be served by a private sector business or non-profit organisation. The Cayman Islands are already considered too expensive by many visitors and potential investors and any new taxes would only perpetuate this.’

The letter, dated 2 September, 2009 was addressed to Paul Byles, consultant to the Ministry of Financial Services and copied to Mr. Bush and his Ministry’s Chief Officer Carson Ebanks.

‘If Government enterprises are not required to make a profit, we see it as an unjust burden on the local economy and ultimately the cost of doing business,’ stated the letter.

They recommend that Boatswain’s Beach, Pedro St. James and other attractions be either leased or partially or fully sold and privately operated.

Cayman Airways

The letter also stated that while the tourism association recognised the great potential Cayman Airways can bring to tourism, unless there was a significant shift in direction and advancement towards tourism by the airline, they fould little value or reason for it to be subsidised by Cayman’s tax dollars.

CITA Executive Director Trina Christian explained that the national airline’s mandate needs to be that it is subsidised for the betterment of tourism.

‘That needs to be more defined and it needs to operate with that intention so that it can be a stronger tourism partner.’

The tourism association also suggested privatising the George Town Landfill and Waste Management departments and recommended an increase in import duty on tobacco.

‘Comparatively with other destinations this is the one import tax where there is some room for increasing the price in line with what the visitor would pay in their home country,’ the letter states.

Increasing Duty

CITA does not support an across-the-board increase in import duty, Ms Christian explained.

‘To increase duty across the board or on other things that are already inflated, it seems counterproductive, so why not pick and choose the ones in which there is room to increase duty so we’re not working against the people trying to keep things afloat,’ she said. ‘Operating a business here in Cayman is so expensive here now already.’

The tourism association said liquor taxes should not be increased.

‘Alcoholic beverages are already too expensive and this would be damaging to our tourism product and would contribute to the already existing perception that the Cayman Islands is an expensive destination to visit.’

They also recommended revision of the Immigration Law to enable expatriates to more easily obtain some security of tenure, which they say is essential for the local economy and will benefit many of their members by reducing turnover and associated costs.

‘In Cayman, 55 per cent of our labour force is non-Caymanian, most of whom under the current Immigration Law have – or believe that they have – little hope of making Cayman their home in the long term. As a result half of all the savings in this country are being repatriated,’ stated the letter.

Support

The tourism association stated that it stands to support the government during these challenging times and that it trusts the government will make much needed changes, despite how unpopular they may be at first.

‘In this crisis, we run the danger of making short-term decisions in order to survive, that may prevent us from making the correct decision for the long term.’

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