Members of Cayman’s opposition
political party said last week that a bevy of new fees and charges that were
approved as part of the country’s 2009/10 budget didn’t earn anything close to
what the ruling administration once had hoped.
In fact, when comparing government
revenues for the fiscal year that ended on 30 June to the previous year,
opposition members noted that the grand total revenue increase was a little
more than $4 million.
According to unaudited figures, the
Cayman Islands ended the 2008/09 year with $487.4 million in revenues; it ended
2009/10 with a forecast $491.6 million in revenues.
“In the result, the $94 million of
projected revenue didn’t happen,” said George Town MLA Alden McLaughlin.
For an entire year, the government
said its package of new and increased revenue measures during the 2009/10
budget would have earned about $126 million. Because of delays in the budget
process caused by the May 2009 elections, government expected the new fees to
raise somewhere around $94 million for the remainder of the 2009/10 year.
However, since most of those
charges didn’t take effect until January, that amount was not taken in. Also,
there were some fees initially proposed by government – such as the 10 per cent
business premises fee – that were never implemented.
Mr. McLaughlin’s comments came
during a political meeting of the opposition People’s Progressive Movement
party last week in George Town, during which he fully admitted that
government’s major financial problems started on his party’s watch.
“The first major deficit occurred
in the last year of our administration,” Mr. McLaughlin said.
That spending gap – basically the
difference between what government earned and what it paid for various services
– was at $81 million in June 2009. By last month, the government operating
deficit had been reduced to some $45 million, according to budget documents.
That gap shrank mainly due to a
reduction in government spending.
Considering the relatively small
increase in government revenues, Mr. McLaughlin said he found it surprising the
government would choose to increase more fees in the current budget, including
planning and development charges and fuel import duties.
“Having had the benefit – if you
can call it that – of that particular experience – that increasing fees significantly
in relation to one sector of the economy has had the opposite effect intended –
they’ve gone and done it again,” Mr. McLaughlin said.
“It is absolutely the wrong
approach to increase the cost on those who do business here in the middle of
the worst recession the world has seen since the Great Depression of the ’30s.”
During the Legislative Assembly
debate on the new government budget and on the 25 cent increase on fuel
imports, Premier Bush repeatedly pointed out that opposition members would make
similar statements and not propose alternative revenue generation measures.
Mr. Bush has publicly lambasted
four opposition lawmakers for voting against his government’s budget for the
2010/11 fiscal year.
“Leadership requires prudence,” Mr.
Bush said during his introduction of the amendment to fuel import duties. “We
must be prepared to make the tough decisions that are in the country’s
Mr. Bush said his government had
examined many other options and had determined that the fuel import increase
was the lesser of many 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 Caribbean
Utilities Company bill. That would add
up to $120 per year in additional electric fees.
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, Mr. Bush said.
Income taxes of 2 per cent on a $30,000 a
year 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.