Petrol duty increase slammed

Opposition, independent members agree

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Opposition leader Kurt Tibbetts and
independent legislator Ezzard Miller said Friday that they would not support
the Cayman Islands government’s proposed 25-cent increase in gas and diesel
import duty.

The import duty increase would put
the levy on gas up from 50 cents per gallon to 75 cents per gallon. Diesel
import duty would go from 60 cents per gallon to 85 cents per gallon.

The duty increase is expected to
take effect on 1 July, but would not apply to Cayman Brac.

Premier McKeeva Bush proposed the
hike Tuesday during his budget address as a way to raise an additional $10.3
million for government coffers.

Mr. Tibbetts said the hike would
lead not only to higher prices at the pump, but also to higher electricity
bills and possibly higher water bills as well.

“If the increase on fuel remains,
the good Lord up above would have to come and tell me to support this budget,
because I will not support that,” Mr. Tibbetts told Legislative Assembly
members late Friday morning.

Mr. Tibbetts said he had not
consulted with his opposition colleagues before making that statement. The five
opposition party members of the LA abstained from voting on the current year’s
budget when lawmakers took up the measure in October.

Mr. Tibbetts said that abstention
occurred mainly because opposition members didn’t believe the government’s
budget figures were realistic.

Independent MLA Ezzard Miller said
he also could not support the increase in the petrol duty.

“If I was almost persuaded to
support it…the second part that exempts Cayman Brac really gets my blood up,”
Mr. Miller said.  Mr. Miller suggested
several new ways government could raise revenues rather than depending on a
move that would raise the cost of nearly every service on the Islands.

One proposal the North Side member
advocated was raising annual fees on coupon renewals and inspections for
vehicles. Instead of paying $160 for 12 months registration, Mr. Miller said
drivers could be charged $400. He suggested fees for registration of rental
cars and heavy trucks be raised even higher.

“That is more equitable than a duty
on fuel,” he said. “They’re not going to have to pay it every time they go to
the supermarket…or the nightclub.” The administration is expected to end this
year with a $45 million operating deficit – that means government spent more
than it earned in the current fiscal year. This budget year ends on 30 June.

Mr. Tibbetts said he recognised
government’s need to bridge the financial gap for the upcoming fiscal year,
which starts on 1 July, but said the increased import duty would simply drive
the cost of living for Cayman Islands residents too high. 

“There has to be some other way to
raise that money,” he said. 

Moreover, Mr. Tibbetts noted that
electricity bills – which are no longer receiving a $6 million subsidy from
government – would rise even further with the petrol tax since fuel is needed
to generate electricity.

The Caribbean Utilities Company is
the largest single fuel consumer in the Cayman Islands.

“It is estimated that….will play
out to a 10 per cent increase in electricity bills,” Mr. Tibbetts said,
referring to the combined effect of the new import levies and the removal of
the CUC subsidy. “I only hope to God it is not worse than that.”

Mr. Miller suggested that
government, instead of charging 22 per cent duty for some imported items and
nothing for others, put a 15 per cent across-the-board duty on all imported items.

“It would make life easier for a
lot of us,” he said.

Both the opposition leader and the
independent member continue to be concerned about government’s revenue
projections for the upcoming fiscal year, which are about $19 million higher
than what Cayman is expected to finish up with on 30 June.

Opposition member Arden McLean said
he also opposes the fuel hike, saying when the United Democratic Party
government was in power, after being “implored” by the then Opposition, it
allowed CUC to import fuel at the reduced duty of 30 cents per gallon.

“When the government brought the
budget in October [2009], they put it back on. That 20 cents was equated into
dollars of $6 million per year, so the government put it back up to 50 cents
and now they are proposing to increase it by 25 cents more,” Mr. McLean said,
adding that this meant that the fuel charges in electricity bills would have
increased by 45 cents per gallon since last October.

“That equates to some 16-plus per
cent of your bill will now be made up from the fuel factor,” he said.

Mr. McLean added that the increased
cost of electricity would drive up prices in supermarkets as store owners
passed on the impact of their higher power bills to customers, leading to an
increase in inflation.

Miller,tibbets

Mr. Miller, Mr. Tibbetts

1 COMMENT

  1. Government needs to start making some efforts personally to REDUCE costs instead of increasing duties (which to me, is basically taxes).

    Their inability to not reduce their personal pay … 3% is a joke, plain and simple.

    You talk to the average person and they are furious with government and talk about Cayman becoming the next Jamaica if things don’t change.

    I believe that with such a negative opinion with government, they would want to show good faith and cut their personal pay to show Caymanians they too want to contribute to leveling out the budget.

    I also think that they are getting overpaid for under-performance.

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