Mr. Hutchison declared, “Cayman doesn’t have a revenue problem.”
We respectfully disagree: Cayman does indeed have a revenue problem. Our government has far too much of it.
The total revenue that Cayman’s government brings in, some $645 million this year (or $11,500 per resident), is much too high for a population of this size, for a government with such limited responsibilities (no national defense expenses, for example), and for public services that are of such poor standard.
The reason that the government requires so much revenue (i.e. taxes, fees and duties) is that government’s budget is devoured by outsize payroll expenses and subsidies to poorly conceived, poorly managed quasi-business ventures.
The primary driver of the recent EY report on government was to reduce the costs of the civil service by reducing the size of the civil service, and therefore the number of civil servants. Savings achieved by those cost reductions should — after accounting for payments on this country’s significant debt obligations and looming liabilities — flow directly back into the pockets of residents and businesses.
One efficient way to do that, in our opinion, is to abolish entirely the duty on diesel fuel, which according to government’s calculations should lead to a 12.9 percent reduction in monthly power bills.
That would help address two problems with cash — government’s (by reducing it) and each household’s (by increasing it).