Archive for July 30th, 2012

Bush says budget is done

| 30/07/2012 | 121 Comments

mac_0.JPG(CNS): The Cayman government has gone as far as it can, the premier has said in connection with this year’s budget and the proposed "expat tax", despite indications from the governor that the budget negotiations are not finished and in the face of protests from across the community, including Caymanians. A memo circulated to civil servants the morning after the premier’s announcement that he would be taking 10% off work permit holders' income and making civil servants pay for health insurance and pensions also indicated that officials were still working on the government’s spending plans and proposals were still being developed.

The introduction of an expat tax, however,  has shocked the community. Following the announcement bloggers on CNS broke all records when they posted over 800 comments on the first news report about the issue within the first 24 hours. A Facebook page was also created by a local work-permit holder which has now garnered over 9,000 members, who plan to protest at Bush’s public meeting on Monday evening. 

Although the tax is aimed at foreign workers, many Caymanians are also outraged at the proposal, not just because they recognise the impact it could have on the economy overall and the unique nature of Cayman but because they are aware that Opposition Leader Alden McLaughlin’s comments regarding this tax being the “thin end of the wedge” are correct and they are also at risk.

McKeeva Bush denied this when he took to the airwaves again on Thursday evening with another statement in the face of the national backlash against his proposal. He said McLaughlin was misleading the public about the tax (which Bush continues to call a ‘community enhancement fee’) when he suggested it could be extended to Caymanians.

“Everyone knows that I rejected VAT, income and property tax and payroll taxes across the board in 2009. I still do,” he said despite the proposed introduction of an expat payroll tax. “His suggestion is nothing but him trying to gain points from this situation, this financial mess with the FCO in control, that he created,” Bush added.

However, the premier failed to point out that the reason why the FCO is still having to approve the CIG’s budgets three years after the PPM administration broke the parameters of the Public Management and Finance Law is because the UDP government has continued to borrow and has not presented a genuine surplus budget, despite promising to do so. If Bush had presented a budget without a borrowing requirement ,either long or short term (including the overdraft), the FCO would not have needed to approve it.

But because Bush’s final budget in his role as minister of finance still contained both long and short term borrowing, the first spending plan was rejected. The premier now says it is the FCO that is forcing him to introduce a new source of taxation, a point denied by sources in the UK. Bush has also denied having any plans to target Caymanians in the new income tax proposal.

“If I had any intention to hit Caymanians harder than they are being hit already, I would have included them in this proposal,” Bush said on Thursday night in face of the most widespread opposition to anything he has ever suggested. “They are not included – for all the reasons I have stated many times. A VAT tax would be disastrous for these islands, so would property tax.’”

Bush will be holding ameeting this evening at the Mary Miller Hall in Red Bay to talk about the proposal at 7pm.

See Bush's statement below and civil service memo.

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