Archive for August, 2012
Mac defers critical meeting to Wednesday
(CNS): As the country waits on tenterhooks for the premier to clarify his position on the controversial expat tax proposal, he announced the postponement of a critical public meeting on the subject Monday afternoon. At 3:50pm the premier’s office circulated a notification that the meeting planned for this evening about the issue would be cancelled and rescheduled as a result of the poor weather conditions. As rain beat down on Grand Cayman, Bush said discussions on what he has termed the Community Enhancement Fee and the government’s 2012/13 budget would be rescheduled for Wednesday night at 7:30 at Mary Miller Hall in George Town.
The entire community will now have to wait a further two days to hear whether Bush has finally been persuaded that there are other options to the imposition of direct taxation on work permit holders or if the 10% take from those with annual earnings of $36,000 and above will stick.
Check back to CNS laterfor more on the proposals made by the local business group, the social media activists and others.
Miller will lift expat tax
(
CNS): The independent member for North Side has confirmed that if he is part of any new government formed in the wake of the 2013 election he will ensure that direct taxation will be scrapped if the premier actually implements the controversial expat tax. Speaking to CNS as confusion mounted over the premier’s position on the proposed 10% payroll fee on work permit holders’ earnings, Miller said that while he may not be guaranteed any position in any new administration, if he was given a chance to serve in the next Cabinet it would be a priority to overturn the contentious tax. Commending the private sector group for its intervention this weekend, he raised concerns about the continuing uncertainty.
“Despite the efforts of the private sector group over the weekend, we note today that there is still a lack of clarity and no small amount of confusion coming from a subsequent statement from the premier,” he said in a statement Monday. “This is disappointing but hardly surprising. Sadly, it is in keeping with the frightening level of incompetence with which the premier has discharged his responsibilities as the minister of finance."
The North Side MLA, who has said he intends to retain his political independence when he stands in his constituency in May 2013, has said he will be running with any “coalition of the willing” that will work towards the removal of McKeeva Bush from office and then form a government to begin to repair the extensive damage and irregularities associated with this current administration.
He also committed to overturning any direct taxation imposed by the premier, which he hoped would reassure the business community that, even if the premier cannot be persuaded in the next few days to take a different course, the tax will be short lived.
In the meantime, however, the outspoken MLA once again called for the premier to relinquish the position of finance minister at the very least, even if he is not prepared to resign as premier.
Miller said Bush’s actions this week had shaken the financial industry to its very core, damaged Cayman's international reputation and created further instability and division in the community.
“Bush should be asked to step down as finance minister. I call upon all right-thinking members of the business community, Caymanians from all cross-sections of society and those of us in political leadershipto demand of Mr Bush that he removes himself from the Finance Ministry, to prevent further damage to the Cayman Islands,” he added.
“For the minister of finance to be allowed to make such an unnecessary and reckless departure from our traditional revenue sources to a form of income-determined tax is in my view grossly detrimental to this country and he should be required to re-assign the Finance Ministry,” Miller said, calling for the financial secretary to resign as well for allowing such a shift in policy. The MLA pointed out that with no definitive statement from him saying that he did not support this income-based fee, it had to be assumed he agreed with it.
The MLA further stated that, along with the UDP's incompetence in managing the country's affairs and the continued wasteful spending, the premier could still find the time and money to travel to Jamaica this past weekend.
“While I congratulate Jamaica on its 50 years of independence, I find it difficult to accept that our premier had to be there at such a crucial time in our budget preparation,” he said.“Similarly, the minister of sports can find the time and money to take a big entourage to London to attend the Olympics, while his government has plunged the country into uncertainty and anxiety. This incompetent UDP government needs to get serious and produce a credible budget, instead of making ill-conceived policy announcements to stir up controversy while they jet around the globe as distractions from the real issues,” Miller said in an official statement.
See full statement below.
Mothersill missing from starting blocks
(CNS): Injury appears to have struck another Cayman Islands athlete at the Olympic Games as Cydonie Mothersill was a no show on the track in her heat for 200 metre heat on Monday (6 August). The Commonwealth Champion was drawn in lane four but did not appear for the race. Her heat was won by the USA sprinter Camalita Jeter. Although she has been suffering from a persistent injury so far there has been limited news from Londonbut it appears Mothersill was concerned about the injury as she prepared for the race. On Friday, Cayman’s star athlete told the CIOC reporter that she had blocked all her injury problems out of her mind and was “raring to go”
As the 34 year old, who was likely facing her last Olympics, did not start the race on Monday she will now not compete in the semi-finals on the world's biggest athletic stage.
This comes on the heels of Kemar Hyman’s bad luck on Saturday when he was also a no show at the semi-finals of the 100m when the runner felt some pain just before the start of the race.
Check back to CNS for more on this story later
Alden: Damage already done
(CNS): The leader of the opposition has joined a growing group of people who fear that the damage may already have been done to Cayman’s reputation over the proposed implementation of the payroll tax and general uncertainties surround the UDP government’s inability to balance the public books. In the wake of the latest discrepancy between a group of business leaders claiming the premier has withdrawn the proposed expat tax and the premier’s denial that it is off the table, PPM leader Alden McLaughlin said he hoped Wednesday evening’s meeting would provide some clarity over what has already proved to be a harmful proposition.
“The PPM has decided to postpone the protest meeting against the tax for this evening in light of the weekend’s events but I have grave concerns about the uncertainty between the business group’s statement and the premier’s own comments about whether or not the damaging payroll tax is still under consideration,” McLaughlin told CNS Monday.
The opposition leader said it was unbelievable that during the last year of the United Democratic Party’s administration it could not produce a budget.
“That can only be inattention and sheer incompetence on the part of the premier in his role as finance minister,” McLaughlin added. “We look forward to this evening’s meeting, where we hope some clarity will be brought to the matter and government will move swiftly to produce a credible budget. This whole situation has done immense harm toCayman’s already damaged reputation and the longer the uncertainty prevails the more it will further harm not just the reputation but the economy as well.
The PPM leader said this position need never have arisen if the premier had begun to address the operational deficit problem from the start and listened to what the UK has been saying, as well as the local business community, and above all taken heed of the Miller-Shaw report and what it said was wrong with Cayman’s public finances.
“If he had listened, the economy wouldn’t be at this point,” McLaughlin said. “But he has persistently claimed that he is turning the economy around and produced pretend budgets for last three years and now, unfortunately, the chickens have come home to roost.”
Turning his attention to the latest news Monday morning that the premier had written an open letter to Bermuda's premier, Paula Cox, which had appeared in the Royal Gazette this morning, the opposition leader said he was astonished.
“I am quite frankly shocked and embarrassed that the premier of the Cayman Islands would write what is such a personal affront to the premier of another overseas territory and to compound it making it an open letter,” he said. “I am not sure what he is trying to achieve by creating ill will between the overseas territories but he needs to get beyond the point where he believes every comment and criticism is about him personally and then resort to insulting the source,” he added.
Storm watch over for CI
(CNS): Update: Monday — The Cayman Islands government discontinued the Tropical Storm Watch for Grand Cayman on Monday morning as Tropical Storm Ernesto was forecast to pass about 216 miles south of Grand Cayman early this evening. However, local forecasters warned that on its current path, rain bands associated with the storm would affect Cayman Islands until tomorrow afternoon. Government opened for business as usual Monday when it was clear the storm would pose no real threat locally. Cayman can however expect cloudy and overcast conditions with frequent showers and thunder until tomorrow.
South-easterly winds of 20 to 25 knots and higher gusts will continue and boat captains were warned to keep vessels in safe harbour as seas will be rough with wave heights of 6 to 8 feet especially along the east and south coasts. Weather models forecast 1.00 to 1.50 inches of rainfall accumulation from Monday morning through Tuesday afternoon.
This may lead to flooding of low lying areas and all residents should continue exercise caution.
On Monday morning TS Ernesto was about 190 miles ENE OF the Nicaraguan and Honduran border
about 405 miles east of Isla Roatan. Winds had increased to 65 MPH and Ernesto had slowed down to 9 MPH.
This general motion is expected to continue for the next 48 hours, the NHC in Miami said but the storm may increase slightly in forward speed. Strengthening is forecast and Ernesto could become a hurricane by tonight with further strengthening before it makes landfall. Tropical storm force winds extend outward up to 125 miles from the centre.
Meanwhile, TS Florence had dissipated and become a post tropical remnant low with winds of 35mph which were expected to fall as the weather system was expected to weaken further over the next couple of days.
Visit the Cayman Airways website for information on the schedule.
Hazard Management Note: It appears that some people who are visiting Cayman Prepared are finding an old version of the site. According to Computer Services this is because they have the old site bookmarked, or in their history or in their cache. If they retype www.Caymanprepared.ky into their browser they will bring up the current version of the Cayman Prepared website.
Expat tax: 10%. A sense of community: priceless
There are many of us civic-minded, gainfully employed, young Caymanians who would gladly part with a percentage of our hard earned salaries if we could be guaranteed two things: 1) that quality benefits, such as education and health care, would become universal, and 2) that the proper system of checks and balances would be implemented to ensure accountability in the way that our money is spent.
From where we stand, however, all efforts that are made to bring about accountability and transparency are met with outrage, disdain and even legal threats. As citizens, when we attempt to engage in conversation and question a policy decision, seek clarification as to how decisions were arrived at, or even attempt to explain why we disagree with a particular proposal we are belittled, ridiculed and at times even bullied by the very people whose six figure salaries we pay.
We are dismissed with a condescending “little girl you’ve had your turn”, the way a parent lets a child know that s/he has been humoured long enough and it is now time to let the adults get back to their important business.
Since the announcement of the introduction of the payroll tax for work permit holders was made last week it has not ceased being on the tip of everyone’s tongue, as it seems everyone has an opinion on the matter. If ever there was an opportunity for a true nation building exercise, where everyone who resides here is able to engage in meaningful and thoughtful dialogue — and perhaps even problem solving — this could have been it.
What we’ve found instead is that we’ve been stripped of our common humanity and sent to our respective “corners” as the tired arguments of Caymanians vs. Expats have breathed a new life, acquired a worrying new momentum, and claimed centre stage — redirecting the energy that would be better served in finding a solution into new, more distasteful ways of tearing down our fellow men.
People — human beings — live here, not nameless, faceless aliens whose existence and value is based on the colour and issuing country of their passports. These people are our neighbours, co-workers, fellow churchgoers, and even friends. We may not always know one another’s names but we recognise faces. There are no strangers here.
We are constantly reminded that we live in a democracy, yet our actions of late have been completely contrary to that very notion. We may not always agree, but it is our democratic right to express our opinions free of intimidation and without fear of repercussion to our personal safety and that of our families. That is basic human decency.
The Caymanian woman who spoke during Wednesday’s meeting stating her view that it was unfair to ask only one sector of our community to contribute more and not another, was dismissed by the Premier as a “little girl” who had had her turn, and then dismissed by another Caymanian woman, who in a rather aggressive manner attempted to put her in her place by telling her that she had not built this country but had “found this country built”.
What followed is what is of importance: instead of addressing the latter speaker, the Premier chose to chastise the first speaker and others who clearly held the minority view at that event to “be careful” of how theyask their questions so as to not stir up the “passionate” crowd.
If our elected officials did more than pay lip service to the notion of unity, someone, anyone from the head table would have stood up and defended that woman’s right to express her opinion freely and without intimidation. Leadership is not about doing the popular thing or the easy thing but the right thing.
Yet no such fortitude of character was displayed as they all sat silently. In that silence the official blessing was given, condoning the perpetuation of this destructive, confrontational, and hostile tone. Here’s the thing about blessings and tones: neither is confined by four walls and so have seeped into the greater dialogue, as was evidenced by the emboldened remarks made on the radio the next day.
For that we should all be ashamed.
From its inception this community “enhancement” fee has served to do the exact opposite of what it intended. It has us turning on each other in all possible combinations: as Caymanians vs Expats, Caymanians vs Caymanians, and Expats vs. Expats. The impact will be greater than stains to our reputation abroad, and we will only truly understand what we have done when we hear it coming out of our children’s mouths.
Tax us, don’t tax us; tax them, don’t tax them … the outcome no longer matters. The damage has already been done, and we have all already lost.
More proposals made as anti-tax rally delayed
(CNS): Following news over the weekend that the premier may be reviewing his plans to introduce direct taxation on foreign workers' earnings, the rally against the proposal by Independent MLA Ezzard Miller, the opposition party and the Facebook group has been postponed. Caymanians and Expats United Against Taxation and the opposition said they will all be waiting to hear what the premier says at his planned Mary Miller Hall meeting on Monday evening. The social media group has already submitted a number of alternatives to his office and is continuing to work on several more.
The founders of the Facebook group spent the weekend working on potential proposals after canvassing many of their members for ideas. Casey Goff (pictured above) told CNS that after the unexpected announcements over the weekend the group rushed to pull together the ideas that have been examined and produce a document, which is much shorter than originally planned but which could be discussed at the Monday night meeting.
“As a consequence of this, we have been unable to complete the list of cost savings measures which we would like to present,” said Goff, adding that the group would continue working Monday to pull more credible proposals together.
So far, the group has proposed a number of measures which they claim could raise more than $83 million. Echoing suggestions made in the past by the business community and a number of other viable options, the group's ideas add to a growing list that has been submitted by a cross-section of the community from North Side MLA Ezzard Miller to Don Seymour, one Cayman’s most successful local business owners. (See early proposals below).
With all eyes on the Mary Miller Hall and the goal of meeting McKeeva Bush’s invitation of a viable alternative, thoughts of protesting against the proposed payroll tax have been temporarily shelved in favour of finding solutions, the group said. The opposition and Miller said they had suspended the planned collaborative rally with the Facebook group set for Monday in Heroes Square to wait on what the premier had to say this evening.
“The postponement is as a result of developments over the weekend and the government’s apparent agreement to withdraw the payroll tax proposal and to hold a public meeting on Monday 6th August to announce alternative revenue measures,” the opposition said in a short statement. “Once details of the Government’s new plans are known, the PPM and MLA Ezzard Miller will determine whether to reschedule the planned meeting.”
It is not at all certain that Bush will drop his plan to impose a 10% tax on expatriate workers earning more than $36,000, as he says the UK wants a budget surplus of $76 million. The budget currently waiting the nod of approval from the Foreign and Commonwealth Office contains the proposed tax and suggests government can raise some $50 million through its implementation.
This is the sum that Bush now says he will need to raise in order to withdraw the tax and replace it with another sustainable revenue source. However, critics of the payroll tax have already pointed out that the proposal is very unlikely to raise the projected $50 millionfor a combination of reasons.
With only around $5,000 people earning $36k and above, many of whom are likely to be in a position to find ways of lawfully avoiding paying the tax, it is unlikely to deliver that much cash to government coffers. Others may also opt to drop their salaries marginally to fall below the threshold to avoid being caught in the new tax net which will be levied at 10% immediately.
Those earning $35,999.99 will not be taxed, while those earning $36,000 will pay $3,600 each year, which would make a drop in salary for anyone earning up to $39,000 worthwhile.
Those opposing the tax have also pointed out the flaw in the government’s position that this method of raising revenue would be sustainable, since the group of workers the government has elected to target is the most transient and the one most likely to leave.
Fixing Cayman’s financial problems
(First published 2009) Over a year ago I wrote that Government and the private sector should don their rain gear as the global financial crisis started to bite in Cayman. People said I was being a Cassandra. Nearly ten years ago, I wrote that Cayman’s revenue base was too narrow to sustain its development and the needs of a growing population, certainly not in a down economy. I recommended a modest annual property tax specifically dedicated to building and maintaining the infrastructure.
I also recommended that Cayman should develop a ten year plan for independence (a discussion for another day). People said I had truly lost it with these two suggestions. And now we are in the perfect storm, with the UK running interference and no real progress with long term solutions.
Earlier Governments wisely put in place mains water supply, sewage (but as yet only for part of the Islands), new airport and hospital and mandatory health insurance and pensions. But we then lived on borrowed time by deferring investment in roads, schools, port, runway extension and waste management. The previous Government decided to build the roads, schools and a new Government building simultaneously and without proper long term funding/financing for these projects.
Also, over the past few boom years, Government operating expenditures troublingly grew as a percentage both of revenue and GDP. Paradoxically, the Ivan disaster produced a huge inflow of overseas insurance and reinsurance money and (even with the duty waivers and reductions) the Governments coffers filled with import duties on (re)building materials and replacement equipment and goods of all kinds. This inevitably tailed off. Then the global crisis hit and our two main economic drivers, tourism and financial services, stopped expanding and then slid backwards. Real estate, construction, support services and consumer spending all suffered. 2009 Government revenue suddenly sank well below projections, yet Government expenditure continued unabated.
Voters everywhere continually demand more and better services, all too often from their Government. And politicians promise to deliver them. So either we stop demanding or we (not just others) have to pay for these services. And there are indeed vital projects still to be undertaken here. The most pressing (and maybe the most expensive) is waste management and the current landfills in particular. Even the most optimistic realtor, developer and “no new taxes” lobbyist must be aware that the south end of Seven Mile Beach, Camana Bay and the bypass stretch are exposed to a potential toxic disaster (air pollution already and soil and water pollution that may be happening unseen underground). What price tourism, real estate and the North Sound if that occurs (and the crime wave and poor underresourced policing continue)?
There are some things we should stop doing. First, bashing the UK. This may play well locally for a time but is unproductive. Second, saying we just have a short term cash flow problem and all will be well if we can borrow some cheap dollars to keep us going until the boom times in tourism and the financial services industries restart. Those times may be a while coming (and we must ensure the right platforms to encourage these key industries), and the traditional revenue streams from these industries will likely be insufficient for the long term. Third, saying we just cut Government expenditure, eliminate waste and abuse in Government services, downsize the civil service and improve civil service performance. Steps must be taken (the civil service and statutory authorities are in the aggregate far too large a percentage of the total work force), certainly to freeze the expansion, but it will be very hard in reality to turn the clock back (just count the votes).
Fourth, saying that privatization and public/private partnerships and private finance initiatives are the solution. There are some sensible options, but these are not sufficient to handle the problems. Fifth, saying that our ratios of debt and debt servicing costs to GDP are and will be well in line with other countries. This is misleading if most of that GDP is off limits as a source of Government revenue, i.e. we are not prepared to tax it directly! I suspect Moody’s may not have taken this into account in their recent rating confirmation of Cayman. Sixth, parroting “do not raise taxes in a recession”. This comes from the same people who during good times say “do not raise taxes, you will stop the boom”. Lastly, painting this as a Caymanian-non Caymanian issue. We are all in this together.
We should not ape the fiscally irresponsible behaviour of the US and the UK. Fortunately, we cannot “print money” and flood the market with CI$ debt that we cheapen by devaluing the currency (since Government borrowings are essentially in US$, we leave the Fed to do that for us!). We need to reinstate sound Government finances. I believe this is possible but contributions are required from the entire resident community and those invested locally. The self-interested “nail the other guy, he’s not at the table so he can be lunch” is very unhelpful. Suggestions should be constructive with a willingness to compromise for the greater long term good.
We now have deficit figures for the last fiscal year (disturbing even if predictable), an optimistic proposed budget for the current fiscal year and UK in-principle and conditional consent to a portion of the loans requested (as yet we do not know which financial institutions have made firm commitments to fund the loans). The UK still requires, not only satisfactory short term fixes, but also a long term plan for sustainable revenues/financing and expenditure cuts/containment to match (phased implementation should be possible). In our own interests, we should also set clear priorities.
The short to medium term solutions outlined so far in the proposed budget call for swinging increases in the usual indirect fees and duties (e.g. import duties – effectively our sales tax, financial services and company fees, work permits etc.), a 2% levy on money transfers through licensed money services companies (but not through banks) and various other miscellaneous fees, a new annual business premises fee payable by the tenant of 10% per annum of the rent (with the concession that no such fee is payable on leases in force on which stamp duty has already been paid), one off savings (e.g. deferrals and perhaps cancellations of services and projects) and windfalls, civil service/statutory authority hiring and remuneration freezes, disposition/refinancing of Government assets/liabilities etc., and improved efficiencies, performance and collections (delivery is another question).
But I fear that, given thereis little hard evidence of sustained cuts on the expenditure side and of specific long term funding/financing of capital projects, there needs to be detailed study followed by action that broadens in the longer term the revenue base through meaningful new levies (implemented in a sensible staged manner) that are not so dependent on perpetual boom times and buoyant consumption. And this is not simply because the UK tells us this. If we fail to do this, we are likely only kicking the can down the road for a short while.
Taxes should be fair, have the lowest adverse impact on economic activity and should be cost effective to collect and enforce. There are two new proposals in particular that do not meet the tests.
The proposed 2% levy on money transfers through money services licensees is unfair as it hits those at the bottom end of the economic scale (who have also been abandoned by the traditional banking system … perhaps the retail banks will be good community citizens and now rethink this poor attitude). It also sets a very ill advised precedent (thin edge of the wedge) as it will be seen as a tax on cross border fund transfers, an anathema to the global financial industry. Finally, it can only be short term, as in a few years, it will be uncollectible as electronic money transfers by cell phone will be possible (this is happening elsewhere already).
The proposed 10% business premises levy on rents (to be an obligation of the tenant but, it appears, to be collected by the landlord and remitted to the Government) fails to meet all the tests (the last one in particular) and is potentially open to nonpayment and fraud, in the same way as stamp duty, health insurance and pension contributions. And in the current climate, I fear that it may finally drive under many small businesses that are already struggling, if they have lease renewals coming up. Also, the new 10 % annual levy may adversely impact one of the key things Cayman needs to do to get the economy going again; that is to encourage greater economic activity here with new financial businesses establishing physical offices with people living and working here in and making real decisions.
My concern is that this new in-your-face line item (combined with the ever increasing work permit fees) in the budget of a fund or investment manager considering a physical presence here might be a turn-off. To put this in perspective: currently a 5 year lease at an annual rent of US$250,000 carries upfront stamp duty of 5 %, i.e. a one off US$12,500 approximately; under the new regime, no stamp duty but an annual tax of 10%, i.e. an annual US$25,000, and thus US$125,000 over the five years.
I also question whether this new levy will result in tenants buying or building their own premises. Anecdotally, the response seems negative. The market is a lot more complex than that. First, many smaller tenants are in no financial position to buy or build. Second, in Cayman other than major retail banks (and most already have their own bricks and mortar), financial services and professional firms typically do not own their office premises as it limits their flexibility for growth (or downsizing) and ownership causes succession problems and more for partnerships.
Third, major tenants are usually already tied into long term leases. Fourth, I wonder if the existing landlord/owner lobby has thought carefully enough about the implications in the unlikely event of their major tenants constructing their own buildings and vacating their current premises. A whole lot of empty buildings, so be careful what you wish for.
I must emphasise that new taxes should only be imposed if and to the extent that the various short-medium term measures outlined in the budget fall short or are not sustainable. Applying the three tests outlined above, I suggest for mature study and consideration three possible new revenue sources.
First, a modest annual community service charge on real estate dedicated to appropriate infrastructure and services (like waste management) and collected by the Land Registry (there can be exemptions for those who genuinely cannot pay and for low value properties, perhaps variable rates/bands depending on the usage and value and a credit/reduction of the upfront stamp duty already paid or payable). Second, a levy on electricity, telephone (including prepaid cell phones), TV and water bills collected by the utility companies. Thirdly, and very reluctantly if all else fails, casino licences (collected by a new Gaming Board). These could together raise a stable CI$45-CI$75 million annually for Government fairly, with low adverse economic impact, at a reasonable cost and with a high collection rate.
This article is an expanded version of the article that appears in the October 2009 issue of the Journal.
Uncertainty prevails over tax
(CNS): The issue of direct taxation was up in the air Monday, with people from the business community believing they had persuaded the premier to move away from the controversial and damaging move to introduce direct taxation to Cayman while McKeeva Bush denied that the tax was off the table yet. The plan to impose a 10% payroll tax on work-permit holders earning more than $36,000 per year was included in the 2012/13 budget proposal sent to the UK last week, on which the Cayman government now awaits the OK. However, seven business leaders claimed Saturday they had persuaded Bush to drop the idea and adopt alternative revenue raising measures — a claim denied by the premier. (Photo Dennie Warren Jr)
Bush has confirmed that he will be holding another public meeting on the issue at Mary Miller Hall this evening (Monday 6 August) at 7:30pm, when he will be discussing the issues but he said the payroll tax will not be dropped unless an alternative can be found that won’t hit the locals who can least afford it.
"The proposed Community Enhancement Fee will only be withdrawn if alternative revenue measures that do not affect the ordinary Caymanian can be implemented," Bush said, on Saturday afternoon, a few hours after the group of business representatives said that Bush had agreed to withdraw the direct tax proposal.
On Saturday evening the business group released a further statement denying that they had “jumped the gun” over the issue as they had the premier’s agreement to drop the tax in writing.
The group, comprising Woody Foster and six others, stated that they were "unable at this time to explain the discrepancy between the news reports" and the clear understanding it has in writing with the premier. In addition, they said that the statement released by the group on Saturday morning had been agreed by the premier before it was issued.
They said that Bush had committed to outline the proposals made by them and others to replace the controversial 10% payroll tax at the meeting Monday evening.
The six men and one woman said they had issued the public statement in order to “relieve the anxiety” that had arisen in the wake of the tax announcement by Bush on 25 July, which has created massive opposition across the entire Cayman business community.
Bush had described the tax as “a community enhancement fee”, which he said was needed to meet the UK's demands for a budget with a $76 million surplus. At first, Bush had targeted all work-permit holders earning $20,000 but on Wednesday 1 August it was revealed the threshold would be raised to $36,000 and the money would be collected by the immigration department.
Although the business leaders said the proposal had created polarity and division in the community that had caused great concern, in the social media circuit it was apparent that the proposal had united Caymanians and expatriates more than ever before, as illustrated by the lightning speed with which the Facebook page Caymanians and Expats United Against Tax formed.
Very few Caymanians have spoken out in support of the proposed discriminatory tax, as most recognized that it would detrimental to the wider economy and the impact would not be limited to the 5,000 or so work permit holders earning over $36,000 per annum that Bush had planned to target.
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Offshore premiers go to battle
(CNS): The Cayman premier has not confined his attacks to local critics but has also hit out at a fellow overseas territories premier. The Royal Gazette reports that McKeeva Bush has written to Bermuda Premier Paula Cox describing her recent comments about him as “antagonistic”. Cox said Bush had been making disparaging remarks about rival jurisdictions to cover up problems in his own country. In response the Cayman premier told Cox to concentrate on what she can do to help Bermudians survive in these critical days as he said he was doing for Cayman. “As Cayman’s Premier I have never attacked, any other country, including Bermuda not even when its Premier consistently attacks me,” Bush wrote.
Earlier this year when Bush boasted that Cayman could end Bermuda’s lead in the insurance market, he went further with his criticisms of Bermuda and its immigration policies.
“In the mid-Atlantic they say they ‘may’ reduce some fees," he had said, referring to the rival financial jurisdiction. “We have reduced fees. They are still talking about their immigration policy and make long statements, but I say this boldly — while Bermuda has been the champion, be assured that we can grow. We here can do it without the malice, without the inhibitions of race, without the inhibitions of transport.”
In this letter toCox, Bush said he had every right to promote the Cayman Islands, “even if you read into it, that it is something competitive to Bermuda.”
Bush said Cayman had other competitors and he didn’t attack their leaders as he told Cox that he was busy working and asked what she was doing for Bermuda. “My advice is you should stop attacking me and use your energy to move the good islands of Bermuda forward,” he wrote.
The Royal Gazette reports that Cox has declined to comment on the latest salvo and the paper has not been able to reach Bush, who CNS understands was on a trip to Jamaica.
A local opposition politician in Bermuda, Kim Swan, told the Royal Gazette that he found the spat “disturbing” and called on the respective governors to broker talks between the two territories. However, the problem now is that, at present, Cayman’s own governor and Bushhardly appear to be on speaking terms.
“It is unfortunate that the Cayman Premier would choose an open (public) letter to the Premier of Bermuda, which makes a futile attempt to ‘mend fences’ with Bermuda,” Swan said. “I recall that it was the Cayman Premier who made derogatory comments about Bermuda in February 2012 which didn’t sit well me and others at the time.”
Swan said the world was watching as he queried the message the letter and disparaging comments achieved for either island.
Recently the Cayman premier has been hitting out at all of his critics as he faces a massive crisis in his role as minister of finance and his inability to produce a budget that will satisfy the UK without introducing a controversial form of payroll tax.
See full letter here