Revenue Enhancement – With great respect to our Premier and his staff, the proposed tax on expats is the wrong way to proceed for a number of reasons such as the lack of a collection machinery and, ultimately, leaving work permit holders in the future without a pension despite what may have been many years spent in Cayman.
The idea that employers voluntarily will contribute to a pension plan for work permit holders is fanciful at best. In my opinion, the proposal for such a tax should be abandoned to be replaced with a modest yearly property tax on developed property, payable by all registered proprietors of such property. The database already exists at Lands and a yearly notice could be sent to all proprietors indicating the amount of property tax payable and the place to send payment. If payment is not made, the sale, lease or other dealing with the property can be inhibited until the tax is paid.
Affordable spending cuts
If we look at The Appropriation (July 2011 to June 2012) Law, 2011 (the latest full year available), we find that the largest budgeted expenditure, in the amount of $33.41 million, is interest on the public debt. With current interest rates being at their lowest levels in many years, as much as possible of the accumulated debt should be rolled over to capture the low rates.
It might surprise people that the second largest budgeted expenditure, in an amount of over $27 million, is what is called “Policy Advice and Ministerial Services”. If only half the advice was received (in this area, probably, less is more), the country could save $13.5 million.
Another surprising item is the $20.96 million budgeted for “Management of Government Properties” and “Management of Executive Assets in Cayman Brac and Little Cayman”. Surely, we can do better than this; at least one-half of this amount can be saved.
Cayman Airways takes up another $17.6 million with budgeted expenditure items of $5.1 million as an “equity investment” and $12.5 million for “strategic tourism, regional and core air services”. My suggestion to the government with respect to Cayman Airways is that if there were no more giveaways to relatives, cronies, friends and directors, Cayman Airways might actually make a profit instead of sucking up a huge subsidy every year. Respectfully, Cayman Airways should not be an arm of the Department of Tourism and should be run on a business basis.
The Turtle Farm drew a budgeted expenditure of $9.5 million. Hopefully, under the leadership of Mr. Adam, this amount will be greatly reduced in the future.
Conclusion – There are other items of budgeted expenditure which raise eyebrows. What is needed is someone with business acumen to look at each line item and identify savings. In my opinion, using such an approach, it would be possible to identify substantial savings.