Travers says UK ‘No’ all about competition
(CNS): The UK decision to withhold its permission for the Cayman Islands government to utilize the loan it has secured for the 2009/10 budget is Anthony Travers’s says designed to disadvantage the jurisdiction. In his latest foray to promote Cayman in the media, the Chair of CIFSA told the international news agency Reuters that the move is all about competitive rivalry in financial services at a time when the UK sector itself is under threat.
The OT minister’s refusal was sent to the government last month and the Leader of Government Business will be approaching Chris Bryant with a number of proposals to raise revenue this week, none of which include taxation. However, if Bryant refuses the government may not be able to meet September’s Civil service salary roll or pay any bills. Travers said the UK refusal was part of another agenda.
"We believe there is another agenda, which seems to have more to do with the competition for financial services and concern that unreasonable tax rates in G20 countries will cause an exodus of people and financial services companies," said Travers who is also head of the Cayman Islands’ Stock Exchange.
Speaking to Reuters this week Travers explained that three banks had been lined up to lend $275 million to government and that while Cayman is predominantly self-governing it still needs the British government’s permission if it increases borrowings above a certain threshold.
Reuters observed that Cayman has suffered from increasing pressure from G20 governments in recent months with it said the future of offshore locations remaining uncertain. The news agency wrote that Cayman is reliant on financial services and tourism, both of which have been hit heavily by the financial crisis.
Travers confirmed the problem and said income from hedge funds on the Cayman Islands has dropped by up to 40 percent, bringing it to similar levels seen in 2005. This has lead to many offshore locations reviewing their long-term business models. Travers said the Cayman Islands is looking to bulk out its service providers on the islands through cutting red tape and encouraging an inflow of talent.But in the short term, the government of the Cayman Islands is focused on plugging the deficit gap.
Travers said the government is reviewing a number of options which include public finance initiatives due to much of the debt burden stemming from the overrunning of two large school projects.Other measures include reviewing the introduction of gambling or a lottery, and increasing taxes on tobacco and alcohol, as talks continue between the UK government and the Cayman Islands, he added.
Category: Business
People
Let us remember that the UK’s present government is Labor and many of its members are scapegoating the Cayman Islands for the problems of unemployment and poor business in the UK.
That the Cayman Islands is now on the brink of a major economic or financial crisis, is their opportunity to try to get those supportive financial entities that lodged money in our banks, out of our banks, and thus, re-direct monies back into the UK’s economy.
It may very well be that after McKeeva submit’s our 5-year economic plan to the FCO, they may very well be anxious to turn it down. Expecially those hidden behind the FCO who have interests in seeing their competitors in Cayman pull out. It would bean advantage for them.
Thus, we can only cross our fingers, but Cayman don’t be surprise for the worst case scenario. We should be now preparing for an economic tropical storm in our direction.
Peace and may God protect us from ‘big people’
Whilst I am sure that the UK would like nothing more than to back the Cayman Islands into a corner so that they have to agree to start levying taxes and therefore make the islands less attractive to investors, there is also the fact that current plans for how they are going repay the loans are not adequate.
Unfortunately greed and corruption is rife in government here and years or mis-management has caused this huge black hole in government coffers. The current leadership, whilst seemingly better than the last lot is still incompetent and completely unqualified for the roles given to them, between them they may know a bit about crabbing and fishing but unfortunately they know nothing about economics or business and never look at the bigger picture beyond these isles. A government that cannot even produce a set of accounts for the past few years is not a body that should be allowed to manage it’s own finances.
Any loans taken out would need to be paid back in the future. Without some drastic measures to increase revenue and cut expenditure, those repayments would never be met. Even with this 300m in loans, the government will waste it and leave the country in an even worse position and another 300m in debt with little to show for it.
The current proposals for raising revenues are pretty poor. Duplex printing is never going to save the world and whilst extra taxes on luxury goods may raise a few dollars it is nothing like the amounts needed to balance the books. These luxury taxes will also likely result in residents taking more shopping trips overseas and therefore hitting local businesses where it hurts.
Cayman unfortunately is never going to be the same force in financial services as it has been previously. Obama’s continuous bullying and harrasment of citizens who use the services here will take their toll and the madoff scams only highlight the worst things about the offshore industries and transparency.
The second industry in Cayman, tourism is also on it’s knees. Years of good times in the world has provided us with plenty of tourists with fat wallets of cash to spend here. In those times the government again took their eyes off the ball and when they should have been investing in the tourism industry and building new attractions, investing in the current attractions etc, they didn’t, they pee’d the money away on their own personal excesses.
Now that the cash and the tourists have dried up we are left with a very tired tourism product that is underweight and overpriced. Other tourist countries have all upped their game as the number of potential visitors drops. They are vying for business by offering great deals. Here the hotels are very slow to drop their prices and offer deals. A discounted room, doesn’t necessarily mean less revenue. A discounted room earns more than an empty room and the guests are also spending money in the restaurant, the bar and putting money into the local economy.
There are plenty of qualified individuals in the Cayman Islands working in the private sector who would jump at the chance (for free) to help provide expertise to the government to help them get us out of the hole, it’s in their own best interests too that Cayman does well, but the government as usual will turn the other cheek and carry on with their destruction of the islands economy.
Setting up a lottery, legalizing casinos in a controlled environment, charging a tariff on overseas wire transfers etc will all help raise revenues and are a step in the right direction but will by no means be enough to fix this.
You make some valid points regarding the bungling and financial mismanagement that has gone on here, but it pales into insignificance compared to that which goes on in the UK, particularly under Labour governments.
It makes me laugh when the word "corruption" is introduced into all this because, whilst I have no doubt that it occurs here, I am absolutely 101% certain it exists in the UK and on a much larger scale. It is laughable that many in the UK are so willing to shout "corruption" in such a judgemental fashion and seem genuinely deluded and blind to the fact that it happens in their own fair isle even though it is self evident.
I think you are also right that when it comes to the global stage, our politicians are out of their depth and ill prepared for the sharks. I mean no disrespect by this, and I think your comment about them is a little unkind, but I agree that they do live in a bubble and that bubble is bursting. I sincerely hope that rather than continuing to waste energy on provincial petty squabbling about who did what to whom, they look carefully for solid advisors and understand that they are dealing with powerful forces (and adversaries).
LoGB has been criticized heavily for his handling of the deficit, and I think perhaps it was an ill conceived plan that backfired in a major way. By once again insisting on trying to discredit his nemesis, he opened a Pandora’s box and having done so there are worrying ramifications for us all in Cayman. By so doing however, I think it has also opened the eyes of many people to the reality of the UK’s overall attitude towards Cayman and it is not a pretty picture at all.
For many, the concept of the "motherland" is set in stone, and certainly older generations have considered themselves loyal and faithful subjects and were proud to be so. Sadly in 2009, most of what Britain stood for has been torn down by terrible leadership, or lack thereof for decades. For those wearing rose colored glasses, maybe it’s time to wake up and smell the roses. The UK is slowly but surely destroying the will of its own people and is completely out of touch with them. Their rights are eroded, they are overtaxed, subjected to farcical laws by a nanny state and allow themselves to be dictated to by unelected officials in Europe. Both major political parties are in a mess, the country’s finances and economy are badly broken and the prospects for the future look as bleak as ever. World opinion of the country has rarely, if ever, been lower and yet they continue to behave as if they are a major world power.
Do not think that a few thousand of us, on the opposite side of the Atlantic, mean anything to them at all – not their government or their citizens. We do not. If the fortunes of these islands go south, the UK is not going to care one jot and if they can gain anything by it, they will happily consider us no more than "acceptable collateral damage" in their attempts to save their own lousy hides. If you have never visited or lived on Britain’s hallowed shores, believe me, you are not missing much at all, at least not if you believe it is a nation that looks after its people well. In fact I think many good people on these islands would be horrified should they experience a few months of life in modern Britain.
Homelessness, racial hatred and violence, crime, overbearing taxation, benefit fraud, out of control spending and borrowing, unemployment, failing healthcare systems, failing education system……the list goes on and on. All this, despite the huge tax burden placed on the individual citizen. They are hardly in a position to point fingers at anyone and neither are they any kind of example to follow. It is sad, but it is naive for anyone to think of the UK as Cayman’s kindly old benefactor in this day and age and no matter how much you may love the Queen, God bless her, she doesn’t call the shots.
COMMENTS 08:11, agreed. Why are certain persons from UK continuing the Bully of the Cayman Islands. We are being treated like a Jacket. Does anyone recall what that means?
Stand tall Anthony Travers, I would vote for you any day you ran for office.
1) They’re putting you on.
2) You’re being stitched up (e.g. like a kipper).
3) You’re being fleeced
4) er,
5) that’s it.
🙂
Richard Murphy,
Cayman is engaging in deficit spending by borrowing. In that respect it is no different from the U.S. The U.S. budget deficit for 2009 is predicted to be near $2 trillion and, like Cayman, the faltering economy (together with the stimulus packages and bailouts) is a major reason. If Cayman is insolvent so is the U.S.
I realize that you (and the UK Govt.) wish to blow this trumpet for the simple reason that you feel it will hasten our demise as an offshore financial centre. Rumours of our death are greatly exaggerated.
Finally somebody said it – it is all about commercial financial industry compettition.
The largest TAX HAVEN countries, the UK (City of London) and the USA (Delaware, New York, Navada, etc.) are using the OECD and other international bodies to do their dirty work in attacking the Cayman Islands and other small international business centers.
This is the story that need to be blasted accross the world.
Tell the USA and UK to look in the mirror to see how they have allowed GAAP and their own tax laws to create the financial and tax mess that they have at home.
Our financial industry now has to tell these countrirs to take their illegal TAX EVASION schemes back home. Build the Cayman Islands international finance business on a sustanable “makes business sense” model.
Take a look at the USA General Accounting Office report on the Cayman Islands:
CAYMAN ISLANDS Business and Tax Advantages Attract U.S. Persons and Enforcement Challenges Exist:
http://www.gao.gov/new.items/d08778.pdf
Testimony before the Committee on Finance, US Senate
CAYMAN ISLANDS
Business Advantages and Tax Minimization Attract U.S. Persons and Enforcement Challenges Exist:
http://www.gao.gov/new.items/d08779t.pdf
Now how does that old saying go “You can fool some of the people some of the time but not all of the people all of the time” or something like that.
TAX ME IF YOU CAN
Inside the bogus tax shelter business – the companies involved the schemes concocted and how the ultimate victim is the American taxpayer. See the many pages in the TAX ME IF YOU CAN program home page showing some of the causes why the world is so angry with the Cayman Islands.
The Cayman Islands needs to tell the crooks to keep their crooked business in their own countries (Delaware, New York, City of London), we will not be their hired thugs.
http://www.pbs.org/wgbh/pages/frontline/shows/tax/
I think the UK should also realise that MANY governments in the world today are engaged in deficit spending in order to stimilate their respective economies. The USA and the UK are no exceptions, except they don’t have to ask permission from anyone in order to borrow more to fund stimulation projects.
MrTravers, I am no financial expert but I have long said that the UK is only bullying the Cayman Islands for their own benefit, Uk, pull the log from your eyes the world is watching you for your travesities that you inflict on the OTs shame on you.
I think the next Cayman/London meeting will include intercourse as it relates to Cayman’s financial and political future meaning the time has come now to answer the question "Independence from the mother country?" Yes or no. Will we even have a choice in the matter?
Independence or contiune on with "voluntary colonialism"? This question will have to be answered now. Down turn in the world economy is an issue yes–but not the real issue when it comes to Beloved Isle and England.
It is obvious this is what we are facing. I am sober. And I am praying.
Now—will Grand Cayman, Little Cayman and Cayman Brac unite and work together or could we see the Sister Islands wanting a break away from Grand Cayman. Read Cayman Islands history. This almost happened in the early 1960’s however noble gentlemen such as Capt. Keith, Nolan Foster and others from the Brac negotiated with the powers of the day in Grand Cayman namely Panton, Farrington, Johnson and Merren. This is the reason why today we have the Cayman Islands i.e. Grand, Little and Brac still a British Colony. If Grand Cayman wanted to follow Jamaica on August 6th 1962….Brackers and Little Caymanians threatened at that time to break away from Grand Cayman and to remain with the crown. Does history repeat itself? Will what has been be again?
—-Quincy Brown
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