Jack calls for cuts & taxes
(CNS): The government needs to get on with the studies it has committed to undertake as part of the negotiations with the UK in order to cut public spending and implement new taxes, Governor Stuart Jack has said. Despite the outright rejection by the elected members of the government, the opposition and the financial community of direct taxes, Jack says he has been struck by how many people in the business community are now seeing the need for some form of direct taxation. Pointing to Tim Ridley’s recent articles regarding property tax, the governor suggests this may be an equitable choice for Cayman.
“The government in Cayman now needs to get on with the two studies that were agreed in this correspondence: of the public service (and the scope for cuts) and of possible new taxation,” the governor writes on his blog. “I have been struck how many people in the business community are now seeing the need for some form of direct taxation, though not many are saying so publicly.” He noted articles by Ridley, the former chair of CIMA, which have advocated a property tax and which also called for people to stop bashing the UK.
The governor then stated that he had also engaged in conversations with “quite a few businessmen”, though he did not say how many, in the financial services industry who, he said, would support a property tax as more equitable and less likely to harm the key financial industry than the alternatives.
So far, the governor has not yet received any comments on his blog despite calls from Leader of Government Business McKeeva Bush last week for the financial sector to “get on the blogs” and counter arguments about direct taxation and other things that could undermine the development of financial services.
Bush has made it clear that he wishes to avoid property, income or sales tax at all costs as it would fundamentally alter the basic principles of Cayman’s economy. He has said he aims to ensure government finances will comply with the Public Management and Finance Law by the end of this fiscal year, so that Cayman will not have to seek permission from the UK for any further borrowing.
In his latest correspondence to the LoGB, the Foreign and Commonwealth Office’s minister with responsibility for Overseas Territories, Chris Bryant, wrote that he still hoped that Cayman would extend its revenue base to include some form of progressive taxation. However, Cayman is now free to access the borrowing which government says it has secured, though the banks, which will be loaning the CIG a total of $275 million, have not yet been named.
The LoGB has agreed to do a review of the civil service by the end of the year and commission an independent assessment of potential revenue raising measures. However, if the government can remain within the confines of the PMFL for 2009/10, it may not have to act on any recommendations for direct taxation. Bush has stated on a number of occasions since his election to office in May that his goal is to increase revenue for government coffers by growing the financial services sector and encouraging more inward investment and development to counter the need to impose direct taxes.
All the recent correspondence between Chris Bryant and McKeeva Bush is now on the FCO website.
Category: Headline News
I propose an immediate cut in the cost of Government – cut the Governor’s salary, get rid of the driver, the subsidised seven mile beach house, and the free meals and all of the other perks.
Then let’s see how many diplomatic UK types want the job.
This man is unreal – we house him, we feed him and pay him handsomely, even give him some colonial kudos with the His Excellency title, and he proceeds to screw us royally.
See how welcoming we are to expats Mac?
I presume then that under your plan Mac’s driver will be cut too? Not a bad idea in that case
Dear Governor Jack,
Your new title is Mr. II – Mr. Inconceivable Incompetence.
YOU HAVE SURELY MADE A MOCKERY OF US CAYMANIANS, YOUR END OF TENURE CANNOT COME FAST ENOUGH!
Don’t forget to lock the door on your way out! I am sure you never eat CI$175 meals in your life until you came here, if you had buy these meals from your pocket you probably would have starved to death already.
You like your countrymen deserve no gratitude from Caymanians as it appears you "tear down" more than you "uplift".
Before you leave ask yourself this one question, What have you done for the upliftment of the Cayman Islands during your tenure as Governor?
and then tell us of all the good things you have benefited from being here in Cayman?
Governor Jack has every right to call for spending cuts and new taxes.
He must be the best fed man in the world.
It was recently revealed by Mr. Ezzard Miller in Finance committee that Jacks meals cost an average of CI$175.00 each. How can we afford that if we dont make drastic spending cuts and find new revenue by way of Taxation on the Caymanian people. Is it any wonder he considers the millions wasted on Tempura as money well spent.????????????????.
Londons Gatwick Airport has been sold. Since BA uses that Airport for its Cayman flights, I certainly hope we are not stuck with Jack for good.
average meal of CI$175.00 each?????
WTF!!!!
Is he eating gold ?
At that price it certainly appers that way.
Jack likes sushi. Has it flown in fresh from Japan by Fedex everyday. Hence the cost. The shipping is the problem here, not the cost of the meals.
Sushi…..or Tempura??? Sorry…couldn’t resist…:)
BA does not use London’s Gatwick Airport for its Cayman flights. It uses the new Terminal 5 at Heathrow!
I stand corrected. Lets hope Terminal 5 is not sold by time he is ready to leave.
Dear Governor,
If you read this, I have a suggestion that will increase the chances of direct taxes and increase the chance of civil service cuts. Suggest to Mr. Bryant that the UK uses its powers to extend the franchise to everyone who has been here for 2 years. It can be sold as broadening of the voter base consistent with modern democracies to avoid future problems like the Turks. Of course some who like their monopoly of power will object, but historically many object when new people are allowed to vote. Indirectly you will bring in many more people who have lived with direct taxation and who will be less opposed to it in absolute terms. Also since most of the current electorate are civil servants, desperately needed staff cuts are politically difficult. Broaden the voting base and it will become more palatable. Just a suggestion. It is never going to happen locally.
Jim
Just imagine this scenario if you will. The British press gets wind of the Caymanians disdain of their (British appointed) Governor.
They send their reporters over to cover Mr. Jack’s leaving exercises and they are exposed first hand to the utter vitriol that the people have for this man.
What will they say? Will they paint us as a bunch of rebels or will they portray us as heroes for standing up to a protagonist of Gordon Brown’s corrupt and dishonest regime, inherited I might add from Tony Blair who never even bothered to pay us a visit…even when he hadtime to be in the area. I quote….
"The weekly paper reported that last month, the Blairs spent three weeks living the billionnaire lifestyle in a luxurious villa in Barbados, detailing links with wealthy businessmen."
http://www.forbes.com/feeds/afx/2005/09/05/afx2205739.html
It is hysterical. When Cayman was a mosquito-infested carbuncle of the Northwest Caribbean with no education to speak of, they were never even mentioned in dispatches. But today, it is very different. The Caymanians actually understand what is going on in their backyard and now they are suddenly important to the Crown. Ooops, did someone say "Money?"
Caymanians, please wake up and believe in yourselves. Control what belongs to you. If it does not play ball, send it home.
Be honest, be true and you will always thrive.
Clearly the Governor has a short memory!
It was he who wanted to add 230 civil servants to cover the new constitution and he who supported the Civil service’s rejection of a cut prior to the current budget. He now wants to do what???….cut the civil service. Either the Governor thinks we are stupid or he has a very serious loss of memory.
While I support cutting the civil service, this Governor is likely trying to deflect public comment on the Sunshine Squad, lack of good governance and the poor judgment he has displayed. As for direct taxes, when the study is done I hope it includes reference to the actual amount of “indirect” taxes we pay as well.
I think the Governor should just go quietly at this point….are we still seeing him off??? when is he leaving??? Did someone call BBC/ Guardian/ Times to cover it???
Reading his comments all I can say is what a bunch of elitist b.s. The financial community? Conversations with business people?? How about… the people? What does he think when he is driven through our island staring out the window…"This would be a nice place if it only had business people in nice suits?" No mention of our welfare. Our opinions. It’s as if we didn’t exist. Here’s some advice Mr. Governor. Get a job. Work for a living. Pay some bills. Then and only then after that reality check could you possibly have any affinity with the people you are assigned to govern. Or any credibility with them. Or continue as you are and have been so far. No more than a figurehead and completely out of touch with the citizenry. And as many of us consider an anachronism in a today’s society. Thanks for the advice but we’ve outgrown you.
I say Property Tax could be a good thing.
The real problem here is the concern that those in power (Govt. Ministers) will only waste it. I believe if Governments had a track record of prudence, transparency, accountability…of ensuring Cayman recieves value for money, then people and businesses wouldn’t have nearly as much a problem with govt. increasing or introducing taxes. It’s as much the problem that we all know how wasteful govt. is.
If Govt. was to do some real expenditure cuts then taxes might be a bit more palatable. Govt. is very top heavy on Management. Do we all realize what we must be paying in MLA benefits alone? Regular Civil Servants have to work 40 years to recieve full retirement benefits…MLAs only have to serve 2 terms. That means all of our retired MLAs are collecting $6,000 and more on avarege…for what amounts to a part time job for 8 years…and just this week they voted on the "Palimentarians Pensions Bill" to increase benefits again. Not to mention the 4-5 raises they gave themselves over the past 4 years…and not one of them ready to give up anything during this economic crisis?
And not ready to introduce Property or income taxes…only because the Big Boys said NO!…not because of Caymanians owning family land…that’s rubbish…they know full well that categories (such as caymanians with family land) can be exempted.
Those in positions of power need to STOP the Politricking!…or Cayman will continue a downward spiral…and please people, don’t be fooled by politricks…think, read, question!
Anyone notice a trend here??????
Mac-xxx stops talking and Jack-xxx starts braying.
I personally feel, this has all gone out of proportion. If we leave the government to try and fix the problems. And get rid of this Governor, he will not really care what happens to the Cayman Islands, he is leaving in less than a month. He can say taxes, crime this or that…he doesnt care and has never cared. I hope that the government that we elected do the right thing for the island. Why not tax properties that have a value of over 750,000 I am sure those people will not really mind it or feel it. A national lottery is also a good thing to help pay for the schools and the roads. All those church going people should worry about crime and harmony in the broken homes due to cheating and abuse instead of worrying about a national lottery.
A casino, is also ok as long as we regulate that the only people who can use them are the non residents.
Here I said it…I hope most of the people who love this country as much as I do realise we have to give a little to reap the benefits in a couple of years. Crime is at its highest we need to have the best police force on the planet. But we also have to tell Police if we know something good policing starts with neighborhood policing the police cannot do their jobs alone.
Property Tax: Great idea!
First the Real Estate Market will dry up.
Then Property values will decline to nothing.
Owners will walk away from the Taxes because Government will not accept the reduced values.
Government will seize peoples Property for unpaid Taxes and all the Civil Servants will live happily ever after.
Mr. LOGB you stand not only to lose your Private business in this type of Taxation but you will also lose the source that pays your present salary.
Do what is right and reduce the cost of Government to what the available revenue can support. That is the only prudent solution.
I read with great interest the governor’s thoughts on revenue measures.
Now I would like to hear from the governor exactly why the crown council seems unable to win any case that is tried in Cayman?
Given this crown council is the direct responsiblity of the governor I would think that he has given much time and energy to determine just what exactly is the problem with the prosecution in the Cayman Islands.
Being a man of conscience and responsiblity I am sure that the consistent prosecution losses and the subsequent civil cases must trouble him greatly and embarrass him as well.
Hopefully this most important issue can be addressed in depth before the governor’s departure.
We really do need to work together to get Jack off the Island as soon as possible. The quicker we can get Jack off, the better things will be for all. This one will have a happy ending for sure.
import duty is tax every government charge called a fees is a tax .jack the ripper is at it again .
I have already heard more than enough from Jack.
The radio stations for the next couple weeks should beplaying "Hit the road Jack and dontcha come back no more, no more…".
the problem with the budget was that that civil service was possibly cut by only $5m or 1%. That is the problem and everyopne else has to pay for it….
Dear Equitable Master
"Take a family who have successfully borrowed everything they have been able to and no doubt had several jobs at the same time working all hours of the day in order to repay the bank." That family sounds massively over-leveraged and household over-leveraging was the root of the last recession. They would have better placed either buying smaller or saving longer before entering the market. If they have decided they wish to effectively take a riskier long position on property for personal gain as an investment why should the more prudent amongst us be expected to subsidise them?
"1.Many Caymanians have family land which they have inherited in addition to their homes. To pay a tax on those lands will mean that they will need sell that land. Frequently such land is handed down in the family to enable the next of kin to start a family home"
As a matter of economics land is extremely valuable capital – the Government should, to promote the economy, encourage economically positive use of land. If a landowner cannot generate a small (say 0.5%) return on capital they are economically wasteful and should be encouraged to either put the land to use or transfer it to some who can put it to use.
"2. Substantial lands are vested in executors and estates which again have no cash to meet the tax" Ditto. The executors need encouragement to progress the estate."
Think about 3 – if it promotes the sell off of foreign owned property it will improve property access for residents reducing costs for Caymanians. Similarly if you are right on 7, the tax will be a good motivator to commercial landlords to drive down rental prices for businesses as empty property will be more expensive – which seems good for local businesses given the recent comments about high rental prices in Cayman.
4 and 5 are short term, 6 raises marginal implementation issues easily overcome with properly drafted legislation, .
In truth you are defending the poor having to pay rather than the capital wealthy.
Prudence
Is the government here to protect property, or is it here to stimulate economic growth and think of us as a resource like cattle?
Do you want more employment, reduced crime, better public services and infrastructure. If so you want to stimulate economic growth. If you want people sitting on $500,000 of land in a hut with no jobs scared to go outside because of rampant gun crime, then "protect property" by all means.
Its a given that I always want more and better services, but as you would tell a spoilt child, I can not have everything.
Dealing with gun crime is a part of government’s role to protect property, the people should be safe to leave their land. Secondly, the crime wave isn’t just due to underfunding as you like to portray it.
Talking specifically about property tax. If we had it here and an owner would not be able to pay it, what would happen? The land will be forcibly taken away from them. Apprehending this, the owner will most likely sell, but it is because of this threat.
The threat of taking land off of people, this is your ‘stimulation’. The whip you use to drive the cattle in the direction you want. So by all means, go to these people that you talk about and whip them off their land.
Equitable Master raised some very good points, most of which you have failed to answer in any meaningful way and above all; is this tax equitable to those who have and have not and residents and foreigners. Plain answer NO.
May I suggest you read once again the points that he raised.
I WOULD ADVOCATE PROPERTY TAX
BUT SO LONG…
1. In the taxing system, the Government gives a lower rate of tax for hardworking Caymanians that are determined to be – (a) An elderly citizen; (b) A single parent with dependants; (c) A disabled person; and (d) A person or couple who has insufficient incomes to qualify them to pay the tax amount without going into debt.
2. The Government gives a higher tax to foreignors who come here and purchase our lands, but do not permanently live here for more than 6 months within a year
3. Higher taxes on properties that are alongside environmental and national trusts’ sanctuaries, alongside beaches, and on lands that are not being used or cultivated
I THINK THAT RIDLEY’S PROPERTY TAX where everyone pays at the same rate IS NOT THE BEST TAX SYSTEM!
To me, we as Caymanians, need a system that is fair to low wage workers as well as to the wealthy or well-off. From Ridley’s SAME-RATE system, rich won’t feel anything, but the poor will be penalized by society’s cost of living, and expenses.
Peace
PS. I also hope the Civil Service Association or MLA’s takes what I mention here into consideration. We don’t need Ridley’s SAME-RATEtax system here for both low and upper class persons on these Islands. It just wouldn’t be fair and just!
Yes you are sooooo right. The people who benefit the most from the Taxes should not pay as much as those who do not. Its not a Caymanians fault that he or she is from here and not there. The people who have worked much harder and made more money should have to pay for those who just can’t because of obvious reasons beyone their control. If everyone pays the same they should not get the same because everyone is not Caymanian. Of course the rich feel nothing because they are to busy being rich. Lets be totally fair and just to just the Caymanians. Belive me us (not a Caymanian) people understand what you want and how you expect to get it.
PEACE BACK ooo yay and RESPECT
There is no indication—and no reason to believe—that Governor Jack has the education, the experience, or the wisdom to advise anyone on economic and financial matters. As far as I known (and I do know), he has never created a company, run a company, or met a payroll in his life.
The most-esteemed economist to set foot on these shores in recent years is Dr. Richard Rahn. Dr. Rahn, served as a Director of the Cayman Islands Monetary Authority until he and Tim Ridley (then CIMA chairman) were summarily dismissed to make way for "Caymanians." What absolute idiocy on the part of Kurt, Alden, et al.
In any event, Dr. Rahn loves the Cayman Islands, understands taxation, and the consequences of runaway spending and ever-expanding government (especially the Civil Service).
I suggest we give him a call . . .
Too little too late. Jack needs to go as quietly as possible. There was much sense in Tim’s suggestions, but the backing of Jack is one surefire way of getting it shot down.
Dear ‘Jack-XXX’,
WHY would we (the people of these islands) believe a word you say now. You have made a mockery of these islands, and its people.
Please just concentrate on packing your bags, and ensure that your posterior is placed firmly in that BA 1st Class seat on a one-way ticket out of here ON TIME.
Deny all you want, but the ‘Proof of the pudding, IS in the eating’.
Your ‘Legacy of incompetence’, lack of integrity, and glaring attempts to undermine and destroy the very foundation that we have built our country upon, will NOT BE FORGOTTEN.
As far as I know, you will be the First Gov. of these islands who will go down in history, not for what you have achieved, but for what you have attempted to destroy.
In my book, you are Persona non Grata.
Mr Ridley advocates a property tax but at the same time advocates taxes that are equitable. This is somewhat paradoxical. Take a family who have successfully borrowed everything they have been able to and no doubt had several jobs at the same time working all hours of the day in order to repay the bank. By paying a property tax they are penalized because of their endeavours. This is in stark contrast to those that have made no such sacrifice and who now enjoy much lower rents than those of a year ago.
I for one do not believe either the Governor nor Mr Ridley have thought this through for many reasons including:
1. Many Caymanians have family land which they have inherited in addition to their homes. To pay a tax on those lands will mean that they will need sell that land. Frequently such land is handed down in the family to enable the next of kin to start a family home:
2. Substantial lands are vested in executors and estates which again have no cash to meet the tax;
3. Foreign owners of condos will be shocked. Many have formed Exempted companies in which to own the property thinking that they were eligle for a tax guarantee for 20 years. Wrong … such a guarantee offers no exemption from property taxes.This will have a draconian affect on the market:
4. Hotels that are sufferring will be substanially penalized. Try collecting money from the Ritaz Carlton who are already borrowing about $200m at 10% per annum.
5. All developers of new apartment projects and condos will be in big trouble as they have contacted already to sell at prices that do not include taxes;
6. Just who is going to value the property where in many cases there is not market value. Some properties have been on the market for years with no takers. Legal arguments and appeals will go on for years;
7. Commercial property owners will also be in trouble as they cannot pass the taxes on. There is a huge stockpile of commercial space around the place and rents are going down. Government has not helped by taking 200,000 square feet in their own building. How is this to be replaced.
However I do believe that the current measures are insufficient to get us out of the financial hole that successive governments have dug. It has been pretty obvious to many that the feast was going to replaced by famine.
If we tax property, we need not Ridley’s system! Please!
His SAME-RATE tax system on everyone is not fair – It is not just!
You need exceptions and various rates for individuals, especially, low wagers, and people living along side national trust and beachside properties. You need to also consider the elderly and disabled, and parents with dependants. Ridley’s tax does not consider foreignors who come here and purchase properties just to be left abandoned.
SAME-RATE TAX SYSTEM WON’T WORK; IT WOULD WORK ONLY FOR THE WELL-OFF FEW
Mr. Jack, how about you and your UK Govt reimbursing CIG for all the millions and the both of you have wasted? Or do you not see that as a problem?
Swizerland will benefit from Caymans demise
And we will benefit from the Isle of Mans demise, because the Brits have pulled the plug on them.
Sounds like another episode from Looney Tunes.
This man obviously came here with an agenda, and the fact that he XXXXX refuses to take any sort of responsibility for his past and present actions in regards to the "Operation Tempura" fiasco is reason enough to disgard him as irrelevant to Cayman’s future. He should leave with what little dignity he has left.
You are a disgrace to and you will be recalled in the history of these Islands as such ‘Sir’!
For over two hundred years these Islands have maintained a tax free status, not only for the benefit if the world but firstly for the people who live here. This enables everyone equal footing to succeed. Unlike in your country where taxes are levied on how successful a person is. You yourself sir has sought to by pass the full fury of the English taxpayers system by securing a position as a dignitary who "RECEIVES" the benefit of the hard working taxpayers dollars.
Why else sir would you go ahead with such ill regard for the people of the Cayman Islands by continuing to let us suffer though not one but two disgraceful and VERY public investigations?
Your deeds will be remembered sir, and remember this the deeds of the father shall be visited upon his children.
Your callous handling of these islands will one day return to haunt you.
Mark MY Words!
Get out of our country Mr. Jack, we need not your advice anymore, you having scr**** us both inside and out !!!!!
Get out get out, November 2009 cannot come too quick to see you go and the end of Hurricane season as well. What a sigh of relief we will have, when both of you have gone !!!
We need more people and more politicians other than Ezzard and Arden to boycott your departure.
In fact, the RCIPS officers whom are normally used for an honor guard at the Governors departure at the airport, should all "sick out" that day. It is called, "giving you some of your own medicine for screwing us over" The $40.00 CI that is normally paid to each officer for their participation on such parades, is not worth it.
As for Cayman Status, I just hope that McKeeva and cabinet are not so stupid to grant him this right, although I doubt he would want to come back and live here anyhow.
CNS, why don’t you guys do a poll on your website to see/gain the true response’s from readers on Mr.Jack’s governance here in the Cayman Islands, over the past years. This would be interesting, please consider doing it.
CNS: This poll has been open since 1 September.
Please lil jack we have heard too much from you already, just leave quietly. Perhaps if Cayman had not wasted so much money because of YOU then there would be not tax concerns. Most people are bashing the UK only because of you, float boy & co. Until you came along there was very little discord in the relationship. The truth is that dishonest government & welfare system in the UK has has sent it into deficit. Therefore the UK is doing its best to ruin the tax havens in the hope that not only will it collect more taxes but also attract the business from the tax havens.
Great news. The property management and construction industry is the only one that Caymanians have been able to have meaningful direct participation in, and we are going to damage it for the industry that has least meaningful Caymanian participation.
How about we just reduce Government spending and move a third of the civil service into the private sector?
“I have been struck how many people in the business community are now seeing the need for some form of direct taxation, though not many are saying so publicly.”
JACK just because you say it does not make it true.
Please go home you have done enough damage.
Re the Cayman property market : There has never been a better time to sell!
…..if only anyone was buying…