Fuel levy increase passes

Measure to take effect 1 July

The proposed 25 cent increase on gas and diesel import tariffs passed the Cayman Islands Legislative Assembly on Monday by an eight to six vote.

Voting for the measure were Premier McKeeva Bush, Ministers Mark Scotland, Rolston Anglin, Mike Adam and Juliana O’Connor-Connolly, as well as MLAs Ellio Solomon, Capt. Eugene Ebanks and Cline Glidden, Jr. MLA Dwayne Seymour was absent for the vote.

All five opposition party members, as well as independent North Side MLA Ezzard Miller, voted against it.

The import duty increase is expected to take effect on 1 July. 

Premier McKeeva Bush said he was asking –
indeed begging – local businesses to absorb the additional costs from the 25 cent
increase on fuel import duty.

“I am begging, I am begging those
who have the power in their hands to give the country some help,” Mr. Bush said
during a debate last week on a customs tariff amendment that
will raise the import charges from 50 cents to 75 cents per gallon on gasoline
and 60 cents to 85 cents on diesel.

The government’s budget requires
the $10.2 million the duty increase is expected to generate.

Mr. Bush said his government had
examined many other options and determined that the fuel import increase was
the lesser of evils.

For instance, Mr. Bush said the
projected 5 per cent increase in electricity bills expected to result from the
import duty hike would mean roughly $10 extra a month on a $200 CUC bill.  That would add up to $120 per year in
additional electric costs.

An increase in vehicle registration
charges from $160 to $400 annually – as North Side MLA Ezzard Miller had
proposed – would cost drivers an extra $240 a year.

Income taxes of 2 per cent on a
$30,000 annual salary would come to $600 a year; while property taxes of 2 per
cent on a $200,000 home would lead to yearly payments of $4,000, Mr. Bush said.

The premier said he realised that
gas stations around the Islands were likely to increase prices at the pump
because of the duty hikes. He said he was pleading with stations not to do so.

According to Mr. Bush, the local
average markup on a $4.41 gallon of gas is $1.78. For diesel that markup is
$1.67, he said.

“This constitutes very heavy
margins, which can be reduced at this time in the interests of the country,” he
said.

Mr. Bush then slammed Cayman Brac
MLA Moses Kirkconnell, in particular, for voting against the budget because of the
import increase; even though that hike will not apply to Cayman Brac, and the
premier noted that his government has provided millions for the Sister Islands
for economic development.

Mr. Kirkconnell said he still
believed – as he had stated previously – that the premier’s budget had provided
some stability to the country and that the government had put in a lot of work.
But he said there were “missed opportunities” within the budget that government
wasn’t taking advantage of.

“There are other ways that we…can
look to find that $10 million in the short term,” Mr. Kirkconnell said. “Ten
million in a $500 million budget is a small percentage.”

“The turtle farm itself is a $10
million issue for this country every year,” he said, referring to the loan repayments
and subsidies paid by the government to the West Bay tourism attraction.

Mr. Kirkconnell said he didn’t
believe government could simply cut the nearly $10 million equity investment
for the Cayman Turtle Farm/Boatswain’s Beach facility in the spending plan for
the upcoming year altogether.

However, he said a public-private
partnership arrangement could be sought to lower what government itself must
pay.

“So now, we’re chasing $5 million,”
he said.

The Cayman Brac and Little Cayman
MLA also suggested a “revenue measure” from cell phones that would raise
perhaps $600,000 to $1 million each year, based on the number of calls a user
makes.

“That is fairly painless,” he said.
“I hope it’s considered.”

Mr. Miller said he did not intend
to vote for the increase in petrol tariffs, citing two main reasons.

First, he said, the import hike
would affect the cost of everything his constituents would have to pay, from
their power bills, to food costs, to supplies from hardware stores and even
drinks from a local bar.

“This is a tax that will affect the
cash flow of every individual in this country on a daily basis,” he said.
Moreover, Mr. Miller said the increased charge would hurt residents of North
Side and East End disproportionately, since they have to drive farther to get
into town.

“There’s not a lot in this budget
that North Siders are getting; there’s quite a lot that Cayman Brackers are
getting,” he said.

“No one can tell me that this is
going to be absorbed by the supermarkets, the hardware stores…or anybody else.”