Reducing the cost of living is the second most important issue in the district of West Bay, trailing only unemployment, candidates told the public Thursday at the Chamber of Commerce candidate forum.
Independent Tara Rivers said a major issue for the residents of West Bay and across Cayman is the ability to pay their bills and the cost of living in general. “The cost of living is of utmost importance to us here in West Bay, as it is to the entire country.
“It is a major problem that our people are facing.”
She said it is important to find ways to bring down the cost of living and, in particular, for the government to bring its expenses in order so some of the fees and taxes can be rolled back.
“We cannot continue to tax and spend.” If government got the level of excessive spending under control, the cost of living could be reduced, Ms Rivers stated.
People’s Progressive Movement candidate Ray Farrington agreed that the cost of living is an issue and that government finances are to blame. “It really comes down to the government sucking money out of the economy through taxes,” he said.
The participants in the candidate panel were in disagreement when asked whether they supported specific measures of government assistance. The former United Democratic Party government, for instance, proposed a $15 million solar panel programme to assist those in need by subsidising the use of solar power with the aim of lowering electricity bills.
PPM candidate Captain Bryan Ebanks said such a programme would be open to an unfair selection process that is incompatible with good governance. “We need to get away from the behaviour of the past four years,” he said. However, he supported solar energy in general as an opportunity for businesses and for lowering electricity costs.
People’s National Alliance candidate Cline Glidden, who was a member of the government that proposed the programme, said he obviously supports it because it could effectively reduce electricity bills. The use of renewable energy should be encouraged, he said, while conceding that the selection process governing who would receive the support needed to be examined.
Ms Rivers said rather than speak about the solar panel proposal, the real question is how to reduce electricity costs. She singled out the cost of fuel, driven up by increasing fuel duties, as the main issue. Ms Rivers argued that high expenditure needs to be addressed to be able to reduce the tax on fuel. Otherwise, any types of support measures and high government expenditure would cancel each other out.
Reducing the 75 cents of tax per gallon of fuel would therefore need to be a priority, but only in tandem with an analysis of whether Cayman is getting enough value for every dollar spent. As long as government expenditures do not offer value for money, subsidies are not going to help, she said.
Mr. Ebanks agreed that the cost of fuel is driving the cost of almost everything, including food, higher.
Asked which fees could be reduced to help people with the rising cost of living, as well as businesses with the cost of operating, Mr. Glidden referred to government’s three-year plan as a starting point. He also supported lowering the cost of diesel fuel to give relief to all residents by lowering their utility bills.
In the financial services sector, heightened fee and licensing costs have reached a point of diminishing returns, he said. Ms Rivers noted the financial services sector contributed 55 per cent of gross domestic product and said that it must remain competitive because in certain sectors companies had already moved jobs to cheaper jurisdictions.
To determine which fees are most harmful to businesses, Mr. Farrington suggested the industry would need to be involved. He proposed to reduce fees and stretch them over a period of time to help businesses lower their immediate costs. “There is no point in government collecting the fees upfront and then causing the business to fail,” he said. He also suggested that if businesses expand, especially when hiring Caymanians, some fees could be reduced based on the number of people they take on.
Mr. Glidden said unlike other countries, Cayman does not have the opportunity to offer tax breaks. The key to helping small businesses with their biggest challenge – the cost of doing business – are government finances, he said. “The biggest challenge that we face is that if we don’t reduce government expenditure we are not able to reduce the fees.” Only if the expenditure is reduced, government can pass on the savings to small businesses to train Caymanians and provide them with opportunities.
Mr. Glidden said small businesses could also be protected against well capitalised partially foreign-owned businesses by restricting certain categories of business to 100 per cent Caymanian ownership.