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.”