Brokers proffer market ideas

| 27/05/2010

The article “Brokers proffer market ideas”, to be found in the Cayman Net News (21st May), presents some good and some bad thinking. With no disrespect to the leading real estate brokers quoted, I am afraid that they may be missing something of the bigger picture.

For experts to say that “talk of taxation” must be taken off the table and in the same breath to say that the airport must be extended to accommodate direct flights from Europe encapsulates flawed thinking. They might also have added to the wish list sorting out the potentially disastrous waste (mis)management crisis before it happens and really adversely impacts prime real estate values along the Seven Mile Beach.

We cannot keep calling for expensive infrastructure projects and other things that “Government must provide” unless we are prepared to pay for them. To do otherwise is to bury our heads in the sand. And it is the obligation of all to contribute fairly to the essential infrastructure and services that everyone, local and foreign, needs and reasonably expects.

There is a wealth of learning (even from the libertarian right) that public revenue generated from real estate can be fair, efficient to collect and sustainable in the long term. I believe a correctly structured and acceptably priced community service charge (CSC) levied on property (administered by the Land Registry) and dedicated to infrastructure, waste management, police, emergency etc services (with appropriate exemptions, bandings and transition provisions and a competitive reduction in upfront stamp duty) is perfectly sensible and appropriate for Cayman. And it should apply to all owners (local and foreign) as all benefit from the better infrastructure and services, and property values should increase as a result.

To those who argue that any CSC would spell the end of Cayman as we know it, I would ask them to think back to the “good old days” (maybe before they themselves arrived in Cayman) and what they would have said when stamp duty on real estate transactions was first introduced and Cadastral survey teams registered all land titles. There were many at the time who said all was lost (Caymanians were ready to march against the Land Registration and Adjudication Laws and related legislation) and that no-one would ever invest in real estate here. History has proved those naysayers mightily wrong.

The CSC proposal requires important sectors of our community to recognise the merits of the suggestion, rather than dismissing it out of hand. So I would challenge the real estate industry to apply its undoubted expertise towards developing a fair, workable and marketable CSC (and revamped stamp duty regime) that is forthe long term benefit of all.

Print Friendly, PDF & Email

Category: Viewpoint

Comments (49)

Trackback URL | Comments RSS Feed

  1. Anonymous says:

    Two problems – mismanagement and enforcement!

    It is simple – the government can not manage its finances. They are not even capable of collection garbage fees! Why would anyone throw their hard earned money in the bucket just so it can be added to the pile of funds that are now being mismanaged due to incompetence?

    The current laws (planning & development and littering) have no teeth. People continue to abuse them, building ad-ons illegal, not within the boundaries and permissions etc etc. How many projects have received approval with certain stipulations who have then been ignored? What about the abandoned buildings (Hyatt, old Marriott Courtyard etc) for example who negatively impact the property value in their surroundings? Why should I (who keeps my property clean and trimmed) pay a tax, and other individuals can’t even bother to keep their front yard free of litter???

    How would such a tax be enforced? Government can’t even enforce child support pay by deducting it from a salary!

  2. tim ridley says:

    I will give it one last shot and keep it short, sweet and realistic:

    1. In the political dynamic of Cayman, it is simply not possible to do the extensive root and branch cuts that many in the private sector wish to see. And they may well not be desirable in the arbitrary manner proposed. So it is counterproductive to seek the unattainable.

    2. It is equally ill advised for the public sector to continue to refuse to make meaningful and concrete concessions. This has to change also. 

    3. But here is the nub, even if the most optimistic downsizing of the civil service, elimination of inefficiency and waste were to be achievable, the current revenue base will still be insufficient and too volatile in the long term to meet the reasonable needs and expectations of the growing community and the visitors and investors we wish to attract.

    4. It is therefore necessary to revisit the way in which we pay for Government services. We can either do this today as part of a negotiated compromise package that should indeed include civil service cuts and new sustainable revenues measures or, as now appears likely because of the unwillingness of the key private and public sector players to move to a sensible deal, we can borrow a few more hundred million, do nothing and hope that "something turns up" in ten years or so when the piper has to be repaid. And, in the meantime, we can teach our children and grandchildren the art of "can kicking".

      

    • Dred says:

      I can not speak for the entire private sector but many of them not only disagree with you but do so adamantly.

      The private sector has been taking it’s punches for the past year or two and the CS has walked casually by watching many of us fall like flies.

      The call for all to share into the CS cuts is stupid at best because many of us already have. Need I remind you of the jobs already loss in private sector to companies downsizing or just simply packing up. And they are more to come, many more.

      I have no problem with new revenue measures to generate new money such as the Hospital, Cruise berthing and Casinos. But I have a problem and a serious one of taxes no matter what you pretty them up to be.

      The reason I have a problem Tim is because as you clearly state we know of our problems and yet we do nothing and your way of dealing with it is to fund it away by taking our hard earned dollars.

      So as it seems CIG in their desire to be seated in 2012/13 would prefer to take my dollar than to risk their return. Their results in 2012/13 is already written in the wind. They are going to take a mind numbing blow next elections.

      CS must be brought to bear. They must be reduced. Not kicked out on the road as you have suggested but moved into private sector. I’m sure immigration still has tons of applications crossing their desk that could be filled from CS employees.

      CIG is hoping this little problem just simply disappears. People like you are somehow vested that the same happens.

      I am resistent against taxes for many reasons. People are out there lingering on the edge living from paycheck to paycheck yet you sit there wanting to take that much more of their money. Some of them who lost jobs were forced to take lower paying jobs, I know of two such people myself personally and yet you still want MORE from them. No Tim. NO. You may have the money in your pocket to afford these taxes but not everyone makes your kind of salary.

      You can explain as simply as you want to but the simple fact remains. You are trying to find a way from dealing with a problem by burying it under funding from our pockets. In other words sweeping it under the carpet at our expense.

      I don’t hate CS. I have family and friends in the CS and I too spent 4 years as a CS employee. I know full well from my own corner of the world how my department operated. You have good employees who work hard and try to get ahead and you have the ones who are there to warm seats. Some of them have occupied the same seat for 15 to 20 years simply because they can never go anywhere else. I also know of the politics of the CS.

      We may have to simply respectfully disagree because I believe Big Mac will win a nobel prize in mathematics or discover a new species or something before I can adopt the policy you are laying down.

      • Anonymous9 says:

        "I have no problem with new revenue measures to generate new money such as the Hospital, Cruise berthing and Casinos. But I have a problem and a serious one of taxes no matter what you pretty them up to be.

        The reason I have a problem Tim is because as you clearly state we know of our problems and yet we do nothing and your way of dealing with it is to fund it away by taking our hard earned dollars."

        I don’t believethey would use the tax money to pay off debt. They would just spend more and be even more reluctant to downsize.

        This is just an OPEN CHECKBOOK as far as government are concerned.

      • Anonymous says:

        You can disagree all you like, the reality will catch up with you very quickly.

        The bottom line is that the Cayman Islands is losing its revenue base. Even if the civil service could be cut in the way proposed by the Miller report, (which btw would affect the number of teachers, nurses and police and not those of lazy Caymanians in high paid jobs who produce absolutely nothing and are the root of the problem), there still would be a deficit. Get it?

        Talk of all the private sector sacrifices has nothing to do with it, because the cuts to the civil service will ultimately have to be borne by the private sector, just not in the way you propose.

        How do you want to move all of these civil servants into the private sector, which as you claim has to make so many cuts? It is not going to happen. Wake up and stop listening to those so-called experts, who are invited by the government and Cayman Finance to present their delusions, but who have no credibility and are not taken seriously by anybody else in the world.

        • Dred says:

          Wrong wrong wrong wrong and wrong.

          While we did see falling revenues it was not as significant as was the increases in spending. And it was expected as we entered into the global recession.

          Here’s what really is going on.

          Between 2005/6 and 2008/9 Personnel cost went up 80million dollars.

          Here’s what the Miller report said.

           1. The Cayman Government’s fiscal performance was acceptable until recently, when growth in spending outran growth in revenues.

           4. Personnel costs are crippling the Cayman Government’s ability to restore its fiscal balance and by any reasonable standard are excessive and unsustainable.

          Now what part of that complicates you?

          No one is saying cut 1,000 jobs. What we are saying is at first simply stop the wholesale increases in personnel cost.

          In 2008 we had around 3,700 employees and cost were about 215mil. In 2009 the staff dropped by about 100 but teh cost went up to 260mil.

          How do you drop 100 employees and raise cost by 45 mil? You figure that out and get back to me.

          If cost had not risen, not even dropped as they should have but just stayed even it would have meant a 45 mil increase in our financial position.

          • Anonymous says:

            Yes it would be a 45 million increase, but there would still be a deficit.

            Quod erat demonstrandum.

            Ask yourself, why did the Miller report not mention where this increase in personnel costs came from, if it is the sole cause of the crisis?

            I don’t disagree that the civil service should make cuts. 

            The point I am making, and this is where the Miller report is wrong, biased and quite simply a poor analysis, is that Cayman has a REVENUE problem on top of the spending issues.

            Borrowing money now will just increase that problem due to the massive spending required for servicing that debt (something not analysed by the Miller report at all).

            • Dred says:

              The revenue problem. It’s called a recession. Maybe you should look it up. People simply don’t fly when they are loosing their homes. It’s kind of a no no.

              Ooh yeah and I know it’s also more than that but that is the reason for the MAJOR drop off you speak about. The spending thats why we are in the hole as deep as we are. And you can sugar coat it or paint it with all kinds of pretty colors but it is what it is.

    • Anonymous says:

      go read the miller shaw report again… and give up with this ‘can’t we all just get along’ mantra

      as the last budget showed when you introduce higher taxes (direct or indirect) in a recession… revenues go down

      but still tim wants to introduce new taxes to dig us out of our hole….zzzzz

    • Anonymous says:

      Last shot (not a good choice of word right now is it)

      Wow, your heart was in that and I think for the first time you showed it and don’t think you are right in some of your thinking…maybe you are opening up.

  3. Anonymous says:

     My only objection is that as usual the exempt would be the rich like Ritz Carlton, Dr. Shetty, etc and the poor a– Caymanian like me would be paying taxes out of my bukas.  

    Tim, you have great ideas for the CS though.  Wish you were in charge.

    There are a lot of speculators that come here and buy land just to resell.  They should be taxed just for that.

    • Anonymous says:

      Poor Caymanian or not. It is your country, pay for it.

    • Here is a thought says:

       if you buy land to resell you ARE taxed, it is called stamp duty and it is enough of a tax thank you!  7% is a very high tax to buy property.  I support new revenue and better management of funds by Govt.  Until the free lunches STOP and waste is under control, I am against giving more money to the fools in charge to squander.  Fuel misuse, credit card misuse, expensive celebration days (did we really need six child of the month parties at every park with our budget in crisis?) overseas jaunts….I could go on.  We need some leaders that will actually stop spending like drunken sailors.

  4. Anonymous says:

    Tim,  Taxes at this juncture are like giving morphine to a patient with a broken arm. We need to first set the arm and put on a cast, not just drug up the patient leaving the fracture alone.

    –THE CIVIL SERVICE OF THIS COUNTRY IS TOO BIG FOR IT’S PEOPLE.  WE NEED TO CUT DEEP, WE NEED TO CUT NOW.

    — WE NEED BUSINESSES TO HAVE THE ABILTY TO HIRE NON-CAYMANIANS WITH EASE BY DRASTICALLY SIMPLIFYING WORK PERMITS.  A WEBSITE THAT AUTOMATICALLY GRANTS A PERMIT ONCE PAID FOR WITH A CREDIT CARD. APPLY, GET, DONE. WITHOUT MORE PEOPLE THIS ECONOMY WILL  ""SHRINK""

    — WE NEED TO ADD MORE CAYMANIANS AND PERMANENT RESIDENTS TO GROW THIS COUNTRY AND ECONOMY.  LAST TIME WE DID THIS THECOUNTRY GREW, THEN WE ADDDED A ROLL-OVER AND NOW WE ARE SHRINKING.

    If you love this Country as I do Tim you will see that GROWTH comes from the private sector. Implementing "taxes" on an island nation where more than half the population has a passport and citizenship elsewhere will give you a frightening lesson in economics if you follow through with it.  HOWEVER, if you correctly follow the 3 steps above, you will see the growth that will allow you to ease in taxes eventually. The question is whether politicians will have the fortitude to do so when the Country is firing on all cylinders.

    • Dred says:

      I agree with some of what you say but not all.

      The CS is too big and they must be trimmed but at the same time those trimmed should be moved to private sector. They are not all bad just some of them and the problem in life is that the minority can make the majority look bad.

      As for permits I believe that there are ways of easing things up but we need to also protect Caymanians. I have seen where capable people applying to a job were turned away because they WANTED foreign because of control factors. A foreigner will work for less and a foreigner won’t complain because they really want the job and are afraid of loosing it.

      We have no where to go. Others do. I believe we need to get back to the foundings of why rollover was put in place. The process of rollover was to:

      1) Persuade companies to activily look for hard working competent Caymanians to fill rolls of the current work permit grants made to businesses.

      2) To encourage businesses who hired capable Caymanians to train them to fill the roles they were hired to fill.

      3) Then at 7 years the permit holder who shouldhave his replacement fully trained to return home.

      The idea was that in 7 years a company who hires a foreigner for a position should be able to find and train a local to replace them in 7 years. That is the fundamentals of the rollover plan.

      Now the problems. Some positions are not that easily filled because we simply do not produce that many candidates annually for those roles and some examples are: CPA, Lawyers, Doctors, CEOs.

      Second problem is the active unwillingness by many companies to TRY to get replacements. They hire the foreign person to be the end all. After the hire there is no accountability back to Immigration that the second phase of hiring his replacement has been started. Then at 7 years the company starts crying foul. Some of them do not even care. They simply attempt to hire another foreigner for another 7 years. Two people dropped the ball here. Immigration for not following up to see if a replacement was hired and the company for not taking the second step. In the end the company is ultimately held at fault.

      I hear the argument for global marketplace but we in Cayman need to thread lightly in this area because those who have dived head forward into this have suffered from huge unemployment. Before you can actively go in this direction you must have a more complete educational system. Right now many of our children still have to go overseas to complete their education. This puts a serious cramp into this process because of financial reasons. In Cayman the sponsorships are simply not enough to go around and the money for those left behind still not readily flowing.

      We need broader based education and deeper leveled education before we can put our children up against the world. I’m not saying our kids are dumb but they simply are not being furnished with the same set of tools to work with. In the end we can crank out some kids into the marketplace who can compete but not nearly enough to support our market place. So you have few top ends, lots in the middle and abit still at the bottom end.

      We also need parents who start out early trying to lead their children towards a career possibly with the assistance of career guidance officers but we need kids identifying what they want and then assistance given to help them on their way. Guidance officers should act almost like Parole officers getting information about the kids under their guidance to see if they are remaining on track. Parents should also play an active role meeting with guidance officers to get suggestions and updates.

      What I would like to see is that all kids entering into John Gray High School should be first interviewed by the Guidance Officers prior to day one. From there they can assess the childs skillset and their desires. A plan can then be created with officer, parents and student on what classes are needed and a progression plan.

      I fully understand that to a business that is not their problem. They have but one objective andthat is to maximize profits at basically any cost. I fully recognize and respect that fact but our government must do one of the following:

      Either arm it’s people with all the tools to compete globally and open the barn doors OR

      Protect it’s citizens to some degree while trying to do a fine balancing act between allowing businesses to profit and keeping unemployment in check.

      The latter is a very difficult position to operate from.

      There is also the position of protecting Cayman from outside elements and some research needs to be done into the permits that are granted. We certainly don’t need more situations like Stella happening.

      All in all I have found the rollover policy to only be minorly flawed because of our current education system. Maybe some leeway to key employees but with controls in place so widespread grants are not made.

      Do not get me wrong. I have no problem with throwing barn doors open if the playing field is to me equal. I believe in competition but we certainly wouldn’t want amateurs competing against professionals. 

      PS Taxes are never eased. That’s the most classic hoax. Taxes only grow they almost never shrink. You show me one that shrank I show 20 or more that grew. As you make more you spend more. You simply become broke at a higher level. Taxes are never a good answer to anything. Take the UK as an example. We are probably better off than they are and they are taxing up the ying yang. Taxes surely did nothing to help them. 

      We simply need to first start by fixing our problems before we look at anything else. To say just tax the problem away is sheer stupidity and naivity also because the problem will only grow.

  5. Anonymous says:

    Why would any sentient being want to give more money to a government that cannot produce accounts to explain what it did with the money over the last 5 years?

  6. Anonymous says:

    Dear Dred,

    We have to live in the real world. Life is a compromise not going over a cliff together. We will have to see how this plays out. But unless there is a sensible compromise, the outcomes do not look good.

    • Dred says:

      Dear Anon,

      You are much like the rest of the drones out there. Stick your head in the ground and hope it will simply go away. Problems dealt with in that manner seldom go away and most often only grow.

      I live in the real world and in the real world people are accountable for their actions or lack there of. So far all I am hearing coming out is a bunch of excuses and no real solutions. Taxes has been a solution to no one. It only shifts the responsibility away from where it needs to be and puts it on the tax payer. It’s burning money. It’s a free ride for CIG to spend on airline tickets, lush hotel accomodations and nights out on teh town.

      You can live in your fantasy world where you simply ignore a problem and paste it over with more money from the people but the rest of us won’t.

  7. Anonymous says:

    New taxes might, just might, be in order when:

    The public sector is efficient and cannot provide ESSENTIAL services which are most efficiently provided by the public sector without an increase public sector spending;

    Politicians only travel economy class and stay in economy hotels, and only when their travel is essential and there is an immediate and quantifiable return for the country on cost of their travel;

    Politicians give up on having their servants, and palace walls paid for by the poor taxpayers;

    Politicians absolutely do not line the pockets of cronies with public funds;

    Politicians demonstrate common sense in the design of public sector spending;

    Only when there is full transparency and accountability in public sector expenditure; and finally

    Only when we get politicians who can spell the BUDGET and produce a coherent budget in a timely manner.

    When do you think that will be Tim? 

    • Dred says:

      We have at least 3 more years to wait to see if we can find one.

      They want to tax us to fund their escapades overseas. I’m waiting for the trip to Africa to represent us at the Worldcup. You gotta know it’s going to happen.

  8. Anonymous says:

    I agree with Tim regarding the demands on government, yet funding for these projects seems to be an issue.  As an outsider looking in, it seems like the realtors  don’t want any more taxes on their line of business, the bankers and the lawers don’t want anymore either on their business, yet everyone wants a bigger and better infrastructure because that would bring more wealth to their busines, therefore more to pockets.

    Well, hear what – the government is not a realtor, banker, law firm, or hotelier, so if you want bigger and better things then you must be willing to pay whatever the government asks for in order to satisfy your demands.   Don’t dance around with suggestions that are directed in the opposite direction.    It don’t work like that and reducing the civil service salaries will never in a 100 yrs. cover these demands.        

     

    .  

  9. tim ridley says:

    I fully endorse small government and entirely agree that, as in many countries, the civil service (and I include in this the statutory authorities) is overly large and often inefficient, and government expenditure is often misdirected and wasteful. But this is not the case across the board and some inefficiency and waste is inevitable, however much we would wish it otherwise.So we should not throw the baby out with the bathwater in our enthusiasm (panic) to cut expenditure (and politics get in the way in any event).

    I would also caution those who argue that the simple private sector Donald Trump "you’re fired" approach will work just nicely when applied to the civil service and statutory authorities. It is far harder to assess the value of the public sector output since it is not just dollars and cents. I have had the honour of serving on two statutory authority boards and know from personal experience how hard it is to determine the true mission and function of an authority, how these should be delivered, by whom and at what cost. And then actually to implement the decisions.

    A key part of the mature analysis many of us would like to see includes discussing and agreeing what services we wish Government to provide, how they should be provided, at what cost and how they should be paid for. So far that has not happened, and we seem to far from even agreeing this should be done.

    As part of that analysis, we should look at the fairest, most efficient and least economically distorting methods of raising the revenue to pay for the agreed services. Proclaiming that no revenue raising should include "direct taxation" is counterproductive and leads to the ill-advised conclusion that it is better to take so called "consumption taxes" through the roof, rather than have anything that smacks of being "direct". But in reality, many of the people who argue strongly for consumption taxes ironically also vehemently object to a value added/sales tax (the ultimate consumption tax), seek waivers on import duties and complain about high work permit fees.

    We are about to borrow perhaps a further US$250 million or so (if the UK consents), to be added to the US$312 million borrowed for ten years in late 2009. The interest cost will likely be in the region of US$33 million per year. And this is with no provision for an annual capital sinking fund to pay off the loan on the due date. Pundits will say that Cayman can simply roll over the loans at maturity. Maybe yes, maybe no (the owners of the debt will almost exclusively be hard nosed foreigners not loyal and friendly local investors). So if we proceed on this basis, we will be on a very slippery, risky and imprudent slope.

    Our indirect revenue raising potential is pretty well maxed out in my view and will not be sufficient to pay for the infrastructure and services the growing population and our visitors expect, let alone the debt servicing and debt repayments. We can of course tinker ineffectively at the edges as we have done for so many years. And the current revenue sources have shown how fragile they are in a down market. So we need to find sustainable revenue sources that are not dependent on and assume boom times for ever. I will leave the reader to fill in the blanks for the most obvious solutions that meet all the tests.

     

     

    • Dred says:

      Tim,

      Honestly these are excuses not reasons. You don’t move on to your next plan before knowing where you went wrong on the previous. It’s called learning from mistakes.

      This throwing a tax is a bandaid. It solves absolutely nothing. In one year after we have found another 60 reasons to waste money we will be again at this table. Just look at our motherland. Are they not in the same boat?? and they can print their own money Tim. They tax you up the ying yang and look at them Tim. They are suffering as much as we are. The only difference is Tim we report to them but they are no better off with all their taxes.

      History tells us Tim the more we have the more we will spend. So why throw more logs on the fire if it’s going to just go up in smoke. Why not try to find another way to get warm. These ideas of taxing people into extinction is archaic at best. It never works. It just gives people an excuse to look the other way and not worry about the wastage.

      No one is saying FIRE THEM Tim. We are saying is return back to centralisation. Undo what bulked us up. Move redundant employees into private sector jobs. I’m sure Immigration has a gazillion permits coming across their desk still and many are for positions that could be for civil servants that would now be redundant. The math says it makes sense. You loose a permit for CI$4,000 but it’s offset against CI$3,000 to CI$5,000 a month in salaries and benefits.

      Tim you have heard this saying before I’m sure. "It’s time to do more with less". It’s all but famous in the private sector now. It’s now time for the civil service to do more with less. We need productivity and less slacking off. More managers saying "come on break it up and lets get back to work", not him joining in.

      These are hard times Tim and we all must roll back our sleeves and dig in. Take one for the team whatever saying you want to throw out Tim. It’s time they really started digging in and saying "I’m going to be the best that I can be for me".

      We in Cayman heard so many times we need to increase these duties for this reason. The reason comes and goes but the duty hike remains. Never once in my 30 plus years have I heard repeal after the desired effect was met. At least I can not recall it. Now we jacked duties up again and what has happened to the bottom line Tim? Are we any closer to the black? No because this hiking only works if the duty is low to begin with but as soon as you hike an already high duty guess what happens Tim? People buy less of it if they can.

      He hiked Annual Government License and Business licenses and what happens, companies leave. So in the end you make the same or less from even less companies. What was the point Tim? Now what have you done. You started companies leaving. A trend that is hell to reverse.

      I could go on and on about the messed up policies of this admin but I won’t. I will only say this Tim. Taxing is not the answer no matter how you sugar coat it. It will only lead to more taxes until we won’t know who we are and the outside world will turn their back on usbecause let’s face facts Tim we really don’t have much going for us now. Sites wise a million different places are equal to us or better all our beaches are buildings now. Safety that’s also going out the window with rising levels of crime and the last pillar is finance and the new revenue measures are tearing a hole in that also.

      And this is all because we won’t take a cold long look at ourselves and say we need to do more with less. Instead of fixing internal problems which may cause some movement of personnel we move to tax the whole country. So we won’t upset 400 but we will piss of 50,000. Boy that is sound logic if I ever heard it.

    • Anonymous says:

      I am an ex senior civil servant. Tim Ridley’s (if indeed it is he) third paragraph above is the crux of the problem. For "donkey years" we civil servants of a sober fiscally responsible sort tried to get successive governments to do this but they always wanted to spend spend spend because they thought it was it was there to spend. The drunken sailor in the port. None of them had the discipline to say to their voters "No, we can’t afford free this and that plus free medical this and that plus pension every month because you have a Caymanian surname and you and your family are nice people and also voters"

      So we’re screwed.

  10. Dred says:

    Tim,

    You are inflicted with Mac Virus A. It’s foundings are based in running from problems. First you start to throw up and out all kinds of ideas in a hope that the general public will "jump" on your bandwagon all the while trying to side step the real underlying issues.

    XXXXX

    Let me spell it out to you for what seems to be the billionth time Tim.

    1) CIG is too big. Too big TIm. TOOOOOOO Big.

    2) Too many expensive benefits. Too Many Tim. Too many.

    3) UnAccountable Tim. Unaccountable to the point of dereliction of duties Tim. 5 Years and no financials by not one but multiple departments and no heads are rolling Tim.

    4) UnderAcheiving Tim. They are not being pushed but instead operate under a status quo. They need goals to motivate them and managers who make sure those goals are met.

    5) Overpaid Tim. Yes I said it. Overpaid. Anytime you are not doing your job and still receiving a massive salary you are paid for nothing, hence Tim overpaid. Overpaid too Tim because many positions compare directly if not sometimes higher than Private sector and that’s before Pension and Health are taken into account. Overpaid Tim.

    Tim look at the Miller report. No it’s not the God all report to Cayman’s problems but it does offer some insight into some issues. Go to Page 17 Tim and look at 2008 numbers against 2009 and tell me about the relationship to staff to dollars Tim. Can you tell me Tim how many times you actually saw a drop in staff anywhere but yet a STEEEP increase in personnel cost, Tim.

    Tim until we resolve actual issues of cost not just with CIG staff but with other areas too such as the Prison and why we pamper our prisoners and why they don’t earn money is beyond me. Why we decentralised HR Tim? Why not recentralise it? Why not centralise other things such as stores.

    In some way Tim I don’t blame CS for being a bit teed off to be honest. We have mass wastage going on and the problems are not being address but our MLAs would prefer to place a bandaid of across the board salary reductions instead of digging down to the issues. This is very typical here in Cayman Tim. We don’t look for root caues no more we simply deal with symtoms. Throw on a bandaid and move on.

    Until we show actively that we are trying to resolve government issues no CS will jump onboard. Just look at our precious MLAs now. Big Mac offers up his salary and the rest of the MLAs only to take it back. He talks about setting examples but forget that to set and example you MUST LEAD BY EXAMPLE. To lead you must be in front not behind. Anyone heard of leading from behind? Ooh yeah Big Mac mastered that.

    So Tim, respectfully you can flush CSC down the drain with the rest of the patch it up and move on mentality. We need real solutions which deal with root causes not bandaids which patch up the symtoms.

    Let me tell you how this works Tim and I’m not an economist or anything like that but I have been on the earth long enough to know the game. CSC is implemented today. In one years time Tim they will have found 60 uses for CSC that has nothing to do with moving us forward and all of a sudden we are back at this friggin table again trying to figure out what you can levy on us again. Property Tax, Payroll tax and everything else will be thrown up. Whatever the course in 1 to 2 years it will be increased.

    Tim the animal is this. The more we make the more we spend and the more our problems are swept under the carpet. We have a beast now but if we continue the beast will grow into a monster. We deal with him now and move on from a more clean slate. No one is going to want to contribute when gas is being pilfered, college leaders are defrauding us, police and judges are being investigated.

    How would you feel Tim if your boss told you you needed to take a 10% paycut but he’s golfing every week, you can see wastage at every turn. Yuo see staff goofing off all over the place taking long lunches and standing around. How would you take that paycut? Not so well I suppose.

    So Tim do me a favour. Unless you are starting to look into the heart of issues not just dealing with putting cream on top of teh pie please stop with your concocked brainy ideas which only move to hurt our economy further.

    • whodatis says:

      Amen.

    • Lachlan MacTavish says:

       Dred….the letter would have read better and probably paid more attention to without all the repetitive rude banter. IMHO there are two issues….one is the end game and how do we sustain ourselves….the other is cleaning up the mess we are on. Tim has very good ideas about the end game which I agree with. Our duty and taxation system fluctuates with the world economy and cannot sustain us in down cycles therefore the need for steady income. The second issue you solely spoke of is yours, mine, ALL our faults. WE THE VOTERS of Cayman keep voting in the same people who have created this mess over and over again. WE allow the system where the West Bay tribe now control the island….not themajority of the voters. Until you, me, Tim …ALL…do something about the system we live under then your letter is repetitive rhertoric like a lot of my rants. 

      • Lachlan MacTavish says:

         DRED….psss…..I am repeating the obvious but the simple fact or truth is that the majority of the voters in Cayman have no control over the country and will NEVER have control or a say until the system changes. We keep praying for new leadership which will never come because the present leadership have "rigged the game". IMHO nothing will change in 3 years. DRED…you and me …we will be rantin bout da same tings. IMHO withno real change Cayman will eventually trip and fall…not soon…but if we continue to borrow, do nothing about the top heavy CIG, nothing about the leaders and with no sustainable income the weight will eventually trip us up. The majority needs to some how re take control of the country.

      • Dred says:

        Lachlan,

        Respectfully I disagree.

        I believe before any problem is attacked you don’t start creating all sorts of other avenues before you properly investigate what got you into the situation to begin with.

        First and foremost our CS is a problem. It did not take the Miller report to enlighten us to the fact that they are too big and inefficient but it did. This needs to be rectified first.

        After that is done we need to look at what else can be done to minimize CIG expenses. Simutaneously we should be looking at new revenue measures that does not negativily impact the local population finances. The new hospital is one of those. The new cruise berthing might well be another. Casinos could well be also if done right.

        After we have taken those steps and we see that we are still not where we want to be then we implement another revenue measure that is time sensitive not permanent because recessions are not permanent. I have no problem with implementing hard time rules but what I do have problems with is creating new taxes so government can find ways of throwing it away like giving themselves 20% to 30% pay increases or flying all over teh world. Which brings me to another point. I don not believe the politicians should have this power. I believe in a situation like this it should go to the Governor for final approval. I wish I could give myself a raise.

        I have no problem with the concept just the implementation. I do not like the fact that you do not address problems before you start trying to patch over things. I believe you leave yourself open to further problems.

        PS I was not being Rude as much as I wanted to drive a point home. Too many people are trying to avoid problems because the applecart might be upset some. Sometimes you need to upset the applecart to find the bad apples that’s spoiling the rest. To me it’s the classic stick your head in the sand thing and I can not begin to tell you how much I hate that position. FIX YOUR PROBLEMS or you never learn.

        • Lachlan MacTavish says:

           Dred……I have to respectfully continue to disagree and respectfully say that you miss my point about two issues. Cayman has proven that she cannot make quick decisions. If you do not address the "sustainable CIG income issue" at the same time as the "Huge CIG issue" we will all be dead and gone by the time something is corrected. IMHO you must address both issues head on at the same time. Hospital, dock (do not agree stay over more long term and stay overs can be trusted not so cruise companies), casino’s visitors only might be an answer. But we still need steady sustainable income for the CIG because the majority of the present taxes fluctuate with island, USA and world events. The leaders have shown that downturns don’t change their spendin habits. The present leadership will give themselves raises or travel first class even when da bank has no dosh. If you can convince me or show me how you think we can get the mess under control now and create a system that functions I might re think my stand….but so far you and me keep ranting away and nuttin changes.

           

          • Iva Come Later says:

            I agree with Dred on this. How can you move forward without learning from the past? How do you know you are not doomed to make the same mistakes?

            Why would you give a gambler who’s provens to be bad at gambling more money to play with?

            I can not see your point.

            You have to start from a stable base otherwise your building will crumble. Your base is bleeding money.

             

             

            • Lachlan MacTavish says:

               IVA…..we all know what the problems are. We, myself included, need to stop analyzing and get together and do something…..

      • Anonymous says:

        The repetitive use of "Tim" was down right annoying and patronizing. Takes the value away from what you are trying to say.

         

  11. John Galt says:

    You get what you pay for.

    There’s lots of talk about sustainable this and that, no new  taxes (aka revenue measures) or we have to cut expenses.  The debate may be polarizing, yet the proponents have common ground – they both want the best for Cayman.  If it’s sustainability we seek, what’s wrong with a measured, balanced approach, which addresses both?  Aren’t we taught not to put all our eggs in one basket?  Buying on credit isn’t sustainable: if it doesn’t jingle it doesn’t count.

    • Dred says:

      "You get what you pay for." – Not really. I don’t see any fair value in the current MLAs right now nor in the CS.

      By my account I am paying far too much for both. If they all made less than me maybe I might agree.

  12. Anonymous says:

    yes keep going tim… you cannot not tax yourself out of a recession!

    the miller shaw report told us what is wrong but the civivl service are succeeding in getting this swept under the carpet

    two viewpoint in a row from tim whereby you seem to completly ignore the real issue which is killing the cayman economy…..the over paid, over staffed, underworked, under achieving cayman civil service!

  13. Anonymous says:

    ‘acceptably priced community service charge (CSC) levied on property’

    … just call it what is for gods sake…..A PROPERTY TAX!

  14. Gandalf says:

    And what will happen if there is a large contraction in the Financial Services industry? What if the UK really is in a similar situation to Greece, and just goes nuts? How will government salaries be paid for in that situation? Well, by raising the property tax of course. So the .5% tax will need to become a 5% tax. Then, Caymanians and foreigners alike will be selling their property to pay off the tax. Of course, the property values will drop like a rock once investors realize what is happening. Everywhere in the West, governments are going more and more into debt. Common sense will tell you that the party cannot go on forever. (Otherwise, many of those foolish English Kings would still be around – they tried the debt thing too). When the party ends, believe you me, the Financial Services industry here is going to take some big licks.

    • Eggbound says:

      What if there is a large contraction? There will be one, and it started some time ago, that is why our Government needs to plan alternative forms of business. A prudent person in the financial industry must surely have thought the golden goose was not impervious to death. We have been on borrowed time for quite some time.

      That reminds me what has become of the Dr Shady deal and the refinery? With regard to the latter has our leader used his frequent flyer miles to go to the Gulf recently?

  15. A, Caymanian says:

    As a Caymanian who now pays more than his fair share in taxes, I think that Tim’s CSC idea is a reasonable one. Part of what ails our society now is lack of personal responsibility fostered in part by our existing tax system. How else do you describe the mentality that we can consume at will and have someone else with little or no connection to the island (eg wealthy foreigners who use Cayman much like a cheap prostitute to "legally" avoid/limit their tax bill in their home countries) to pay the bill? Taxes are healthy! Everyone that considers him/herself to be "Caymanian" loves this country and should be willing contribute to the cost of running it. If it means not being able to drive that shiny new car then so be it (news flash: if you earn $100k/year, stay away from the BMW dealership…you can’t afford to drive a $50k car). 

  16. Slowpoke says:

    There may be a, at least in the short term, an alternate plan.  Rather than having a one-time stamp duty, why not have the payments extended, say over a seven year period.

     

    This would provide a more regular source of revenue and would cover the usual boom-bust real estate cycle.  It would also allow for various adjustments to protect the poorest, increased fees for high-end properties, etc.  

  17. Anonymous says:

    The voice of reason?

    No! Hang him by the neck from the nearest price-fixing, anti-competition (ultimate capitalists?), excessive-profits, self protectionist, overcharging, uninsured, build us an airport extension immediately but dont ask us to pay our share, closed shop. As sponsored by CIREBA.

    Bloggers; there’s never been a better time to buy, you know!

  18. Anonymous says:

    The last thing that this country needs is another tax, particularly one that is hugely expensive to implement and operate, and one that is easily corrupted by politicians in their search for the all you can eat trough.

    Apart from that, any property based tax system of the type you champion would force many Caymanians who have land but little cash to sell the very land that has been in their families for generations. That may seem like a good plan to some who have more cash than they know what to do with, but the rest of us say No Thank You.

    No matter how many times you put your half-baked idea forward it is still a bad one.

    • Adam Smith says:

      Land is an exceptionally valuable resource, especially in a small island jurisdiction.  Those who do not put land to good economic use are harming the broader economy and if they cannot generate enough cash to pay a sensible levy then it is in the wider interest that their land passes to someone who can put the asset to use.

      A moderate property tax makes good economic sense.

      • Anonymous says:

        Narrow concepts of "economic value" and optimal use provide the wrong metric. The last thing Cayman needs is to force the destructive development of the remaining green areas in Cayman as people attempt to squeeze "optimal economic value" out of it.

        Land also has both ecological and social contexts. The undeveloped land which has been in the same families for decades has a social value and an environmental one. The piece of land that parents raised their children on with the expectation of being able to sever pieces to give to their children and grandchildren should not be forced from their possession by any money hungry politicians looking for ways to pay for that next first class flight.    

        • Anonymous says:

          So exempt undeveloped land. Simple.

          • Anonymous says:

            Are you kidding me?  There are acres of undeveloped land that is belong to foreigners who have not returned to these islands in decades and all their land  is increasing in value and being used to harbour drug dealers and pests.   Now you are suggesting exempting it from taxes, this maybe the case for farm lands but certainly not a blanket exempt on all undeveloped land. 

          • Anonymous says:

            So just call it by its true name… a foreign land tax…then try to attract foreign investment.