Who will tax, who will cut?

One of the most unusual things about politics in the Cayman Islands is that, while we may have some forty-three people planning to contest the General Election on 20 May, it is hard to define what any of them really believe in.

Whether they are People’s Progressive Movement members, United Democratic Party candidates or Independents, no one offers the electorate a distinct political ideology but instead hopes you will vote for them because you like them. In most other jurisdiction there is a political spectrum ranging from the far left to the far right where voters can define their politicians and understand by and large how they would approach an issue according to their political colours.

For instance, if we were to take Cayman’s current $29 million budget deficit and place it in an imaginary Cayman Islands where the politicians have specific political definitions, we would see how a specific party or independent would deal with it. If a party on the left were to win, for example, than the deficit would be addressed through increases in taxation, especially on the rich, and if a party on the right of the political spectrum were to win they would likely cut taxes to stimulate spending but also cut public services to the wire.

In most countries raising revenue through direct taxation or cutting public services are the tools that respective administrations use to manipulate their economies and appeal to the electorate. This is, of course, because most countries don’t have such a huge outside source of revenue as Cayman does both through the offshore financial services sector and tourism. However, as we have seen, as a result of the global recession the revenue earners that Cayman has depended on for so long have shrunk considerably while spending has increased. This means that whoever is elected will have to make a decision for the next budget to increase government revenue and cut spending.  The problem is that because there are no clear political definitions the Cayman electorate will go to the polls on Wednesday 20 May without really knowing where the candidates will strike that balance.

Which political party will introduce new taxes and which will cut spending, which independent candidates support more revenue raising measures and which ones think cutting public services will address the problem? These are the questions that the left and right of politics usually defines for voters. People know just by looking at the political party name how a given group of politicians will behave once in office from an ideological point of view.

Right now as the campaign begins most of the noise coming from the hustings is all about change, strong leadership, reviews, better ways forward, doing what it takes, working together, getting down to the issues and other familiar rhetoric. However, who will cut and who will tax remains a mystery.

While some candidates have stuck their heads above the parapets and suggested, for example, a national lottery to raise revenue, one independent has even suggested a direct income tax on ex-pats earning over $5000 pcm, most have talked simply about efficiencies and better management of what we have got. Realistically, none of these policies would be sufficient to raise the necessary revenue that the public purse now needs.

At the end of the day, government is about taxation and spending. For thousands of years, from the kings of the European courts to African tribal leaders, those who rule do so from a political position which informs how they raise and how they spend money or allocate commodities. While there are of course many, many issues that fall outside the way revenue is generated, such as prayer in school, crime and punishment, protecting the environment and others, how a politician approaches these in the first instance comes from how he or she raises the money to pay for or promote a moral position.

 A government cannot function without a budget and cannot make moral or ideological decisions about any issue until it has made the fundamental decision about how it raises money and where it will save it.

With personality dominating Cayman’s political scene, the electorate may well be voting for who they like come 20 May but will they be voting for what they believe in regarding how revenue should be raised and where it should be saved?  There is only one way to find out and that is for the voters to ask their would-be political representatives – what will they do, tax or cut?

Given the precarious situation that the country’s finances are now in, decisive political ideology is important. Whether taxing or cutting is the right way forward is, in a democracy, for the electorate to decide but in order to do that they need to know who will do what. The electorate needs to demand more of their would-be 43 rulers and ask them to reveal their political colours before they place the X on the spot this time around.