Archive for July 26th, 2012
Mac refuses to cut CS jobs
(CNS): In addition to a 10% tax of work-permit holders' income, the government will be introducing a directorship fee and another employment fee to firms employing foreign workers in jobs that could go to Caymanians in order to try and balance the 2012/13 budget. In a broadcast to the nation on Wednesday evening announcing the new payroll tax, Premier McKeeva Bush said he had refused to cut the 500-700 jobs needed for government to balance its books and had preserved the public sector workforce. However, the payback for that was the requirement that all civil service staff and their families will now make a contribution to their healthcare provisions and their pensions plans.
In a statement that demonstrated just how bad the state of government finances has become, the premier confirmed that, despite his promises to hold out on taxes, Cayman needed a new source of sustainable revenue and he would turn to direct taxation.
Although Bush claimed the so-called 'Community Enhancement Fee' was not an income tax, it will be calculated on the incomes and taken from the earnings of all work-permit holders who are paid more than $20K per year.
In what appeared to be an effort to soften the blow, Bush announced that employers of non-Caymanian workers and those employees would no longer be required to contribute to a compulsory pension scheme, cutting the burden to businesses.
Bush said that he had been under twin pressures from the UK to simultaneously cut spending and increase revenue.
“The FCO insisted that the Government strengthen its fiscal position by implementing a greater level of expenditure reductions,” he said. “The FCO is also of the firm view that the strengthening and improving of fiscal results for the Government must not occur solely as a result of reductions to expenditure, but revenues of the Government need serious enhancement and expansion.”
His statement listed vague references to savings in the public sector, such as cuts in marketing and the centralization of procurement. He also announced the sale of the police helicopter based on recommendations from the Expenditure Review Committee.
However, he said he had fought to hold on to benefits for veterans and seamen as well as assistance for churches and community projects.
There was, he said, a further request from London to reduce an additional $20 million “in areas of the budget which give grants to: Seamen/Veterans benefits, Social Services, such as the Elderly and Handicapped Persons benefits, temporary rental assistance and temporary financial assistance for persons who find themselves unemployed, Education Council Scholarships, grants to Community programmes such as apprenticeship programmes and church related programmes. To do this would truly make our community suffer much more than at present. I have refused that cut!” Bush stated.
As a result of a myriad number of announcements in the statement relating to the forthcoming budget, the premier said he would begin a serious of public meetings starting on Monday evening.
See premier's full statement below.