Expanding & rebalancing our electoral & tax systems
As we head towards the 2013 election, it is opportune to consider how our present electoral system (regardless of the number of MLA’s, the number of districts and the number of votes per voter — subjects for another day) fits with the way our Government raises (and spends) its revenue.
The short answer is that there is a growing misfit. We have a worrying misalignment of revenue generators and revenue spenders. This is a very significant headwind to getting improved performance, responsibility and accountability in our elected Government. I believe that the situation could be much improved by expanding the electoral roll and by rebalancing Government’s revenue sources.
Taxation should be fair and non-discriminatory, should cause the least disruption to the economy and should be efficient to collect and enforce. It is also broadly accepted that those who pay taxes should have representation. This in turn means they should have the right to vote for (or against) the people who represent them and impose and spend the taxes. This is how civil society can properly determine the services it wants from its government and is willing to pay for and can better restrain the instinctive “tax (or borrow) and spend” habits of its politicians and bureaucrats. These principles should apply no less where the taxation is indirect as is the case in Cayman.
The qualifications to be a voter here are that the person must be Caymanian, aged at least 18 and resident in Cayman (and have been resident in Cayman for two out of the previous four years).
It is now not usually possible to become Caymanian without also being a BOT citizen. A person who is a BOT citizen may apply to be Caymanian after they have resided in Cayman for at least 15 years. Alternatively, they may do so 5 years after they received their BOT citizenship. This citizenship can be applied for after 5 years residence, one of which must be “free of restriction”, i.e. full permanent residency (PR) (not a work permit) is a prerequisite. For this purpose, full PR now typically requires 8 years residence with a work permit (less if you secure it as an investor/person of independent means). So a total outsider, arriving in Cayman today on a work permit, could in theory apply to become Caymanian after about 13 years (there are a number of other (quicker) ways to be or to become a Caymanian, through descent, marriage, etc). That seems far too long for someone who has made Cayman their home, is contributing to the community and to Government revenue, to wait to vote.
We can see the result in the size of the electoral roll. As of 1st October 2012, there are 15,292 voters representing about 36% of the total adult population of around 43,000 (there are around 12,000 minors). In the 2009 elections 12,287 people voted, i.e., around 80% of those registered at the time. The result is that around 29% of residents over the age of 18, i.e., less than one third, voted to elect the Government that decides how to raise revenue and how to spend it. This seems badly out of kilter.
We should seriously consider expanding those eligible to vote either by reducing the time it takes to become Caymanian or by including those who are not (yet) Caymanian, but have PR. There are about 5,000 adults with PR. Permitting them to vote would significantly enhance the voice of the revenue generators and their ability to sensibly influence both who gets elected and how these representatives decide that revenue is to be to be raised and spent.
In addition to expanding the electoral roll, we should also broaden and rebalance our revenue base. It is becoming increasingly clear that our principal revenue sources (tourism and financial services) are too narrowly based and risk being maxed out, and regardless of how much excessive public spending and waste can be reduced (subjects for another day). And there is a serious risk of diminishing returns … our tourist visitors and financial services users will “vote” with their feet and go elsewhere, on the basis we are simply too expensive and there is better value elsewhere. So we need to exercise serious restraint in increasing anti-competitive fees on these two key revenue generators. Indeed, we should strive to reduce these fees in order to encourage more activity in these areas.
It is also vital that we develop alternative (not simply additional) and sustainable revenue sources and, most importantly, those that include a greater contribution from the sections of our society (whether Caymanian or not) that are not currently contributing an appropriate (“fair”) share of the costs of running the Islands, yet nevertheless enjoy the significant benefits. Although still an anathema to many, the logical road leads to a sensibly and sensitively structured community service (SCS) charge tied to real estate. I stress that this SCS should replace/reduce existing fees and charges, not simply be on top of them.
If we take the steps described above, we will have a much greater proportion of our society with real “skin in the game” and thus with a much greater incentive and ability to reject the siren calls of politicians who promise more spending, to scrutinize closely calls from politicians for more taxes to pay for that spending and to secure effective performance and accountability from our politicians and public servants.
This viewpoint is based on an address given to the Rotary Clubof Grand Cayman Sunrise on 31October 2012.
Category: Viewpoint
And that ladies and gentlemen is how educated people conduct themselves with a debate. Thank you Tim for the back and forth, Really wished the Local politictians could do it this way and stick to the points. Here is a point to ponder. So two guys sitting in a bar (of course) looking over at another guy in the corner just nursing a beer or whatever in the bottle he reading the small print on it. real silent and out of place. So one guy say to the other,, "gotta watch him yu know, cant trust the silent ones" all of a sudden loud mouth guy pops in and start shouting he will nock off the head of everyone in the place caz they looking at his girl, slams his hand on the counter and shouts "femal dog" get me my beer. So tell me now who you gonna watch now?
The sooner I can get my hands on my own pension money the better. The management of these funds is a national disgrace even before it became clear from this case that they our money is not being looked after properly.
I was able to get 35k out of my pension, thanks to Ellio Solomon's amendment to the Pensions Law.
I certainly don't agree with with you all the time, but you have made many Caymanians very, very happy. Well done.
as usual avoiding the real issue….a bloated, overpaid, over staffed, underperforming civil service………………zzzzzzzzzz
I agree we need to attack waste and excessive public sector spending (and that includes the civil service). And I say so in the article. But the focus of the viewpoint is on two key and fundamental issues – the misalignment between the revenue generators and the revenue spenders and the need to restructure the revenue base. Tim Ridley
"..the misalignment between the revenue generators and the revenue spenders and the need to restructure the revenue base."
Sounds like a load of financial claptrap.
Cayman's ever-burgeoning civil service is consuming more cash than the private sector can produce. Are you saying that we should open the immigration floodgates to generate more revenue? XXXX
This is unsustainable economics. XXXXX I am not sure you present a satisfactory handle on the simplicity of our problem.
The solution is to downsize and cut the fat, but this would be contrary to the plan wouldn't it?
For all the accountants and so-called financial experts in the world and judging by the atrocious state that the global economy is in, I would come to one of two conclusions. Either the world's financial experts are just plain useless, or we are the victims of a carefully crafted conspiracy and are staring a financial abyss in the face.
You can't have it both ways.
By the way, no one loses money in a casino or in a stock market. The money is transferred, not lost. You know exactly where it went, it's just that it doesn't belong to you any more. More obfuscation by the 'money' people.
There are literally thousands of Caymanians who are not currently registered to vote out of selfish fear that they might be called upon to serve jury duty, while enjoying the other privileges of status such as owning their own business. This society doesn’t need to accelerate the emancipation of any more of these self-important leeches, thank you very much. We’re all stocked up.
It is easy enough to fix the jury issue. There is draft legislation to do so.
Making people register to vote and getting them to vote is indeed more difficult. There may be some bad appples, but sobeit. That is the case everywhere. But my experience is that most people who live here long term and have made it their home are very actively involved in and committed to the Islands in a very beneficial way. So they should be entitled to vote. Tim Ridley
No, Tim. I have to disagree that that is true about most. Most of them are bloodsuckers who live here only because it benefits them economically.
But how can we hope to change others when we are not willing to change ourselves?
Good XXXXX luck…Nepotism and Ignorance prevails here (amongst Caymanians and Expats alike)
Tim, I am afraid you are wrong about it not being usually possible to become a Caymanian without being a BOTC – although that is the impression i accept you will get on first reading the law. Any child of a Caymanian becomes a Caymanian automatically – even if they were born before the parent became Caymanian or only moved to Cayman for the first time a year ago. Spouses of Caymanians also become Caymanian without being BOTC’s. The number of non BOTC Caymanians is substantial and growing exponentially. There is already a second generation who are not BOTC’s. The constitutional implications are enormous – but hey, when you people mess with a system they do not understand, dat wha you get!
Apologies for the shorthand. The words in parenthesis were designed to pick this up. My children indeed all have Caymanian status and are eligible to vote. But they have never taken the step of becoming a BOTC, and nor have I. Tim Ridley
Thanks Tim. Your children are however, like you ( I believe) British subjects. The constitutional issue arises more where persons who are not British subjects are nevertheless Caymanian. They cannot, for example be guilty of treason or (as non British subjects) possibly be liable under the UK Corruption Act. The drafters of the original legislation knew what they were talking about when they required all persons becoming Caymanian to first have loyalty to the crown. Populist and misguided theory changed that ( I hope temporarily). I find it horrific that foreign nationals can become Caymanian without any oath of allegiance to these Islands or commitment to it’s democratic principles. The Queen is Queen of all original Caymanians ( who are all British subjects and have been for mor that 300 years) but not for the thousands of more recent Caymanians who have become Caymanian without being Naturalised.That is possibly very dangerous for our future.
British Citizens. There is no longer any such thing as British Subjects and Tim would never have been one.
Wrong. Anyone who owes allegiance to the Queen is a British subject. It includes British Citizens and British Overseas Territories Citizens.
And that is why the entire concept of "allegiance to the Cayman Islands" is a false one. Their is one soveriegn nation to show allegiance to and the interests of the greater should always prevail.
Ha!
A child of a Caymanian that is born out of wedlock takes what nationality?
It's mothers.
The nationality of their mother ( first) and possibly their father. The mother may be (say) an American awarded status the father (say) Honduran awarded status. In such a case the child would be a US citizen with Caymanian status. They would not be a BOTC. They may also be a Honduran citizen. TheirPassport would be American ( or Honduran). they would be Caymanian but not entitled to a BOTC (Cayman Islands) passport as they will not be a BOTC.
Caymanian is not a nationality, rather an immigration status. In 1971 when the concept of “Caymanians” was created by the Caymanian Protection Law, Mr. Benson confirmed it was a label to distinguish Islanders from others. Accordingly, the answer to your question depends on the nationality of the mother – and it makes no difference whether she is Caymanian or not.
The concept of "Caymanian" has existed from the time the Islands were first settled in the 1660s. It did not originate in 1971. Although it was not legally defined it was well understood.
Agreed – but it was first defined in 1971 and a key part of the definition included being British.
I take the opposite view. Allowing status holders who are not British Overseas Citizens to vote is a mistake.
There are people from countries which do not have parliamentary systems who now have status. These individuals' do not have Caymanian or British nationality, their allegiance is to another country having, in all probability, a system of government completely different from ours. How can these people be expected to cast a vote intelligently?
Just because a country allows it's citizens to vote in elections does not make it's system of governance in any way comparable with that used in Commonwealth territories. A prime example of the absurditiy of such a situation is the U.S.A. where they even vote for judges and law enforcement officers.
Of far more use would be a system of qualifying for the right to vote.
So many of the current electorate have used their votes so intelligently. My pet rabbit would have a better strike rate of "intelligent voters" than some of the current roll.
Your pet rabbit is presumably non indigenous, and as such a "paper" rabbit at best. Such rabbits should not be allowed to vote, as they will take over the country and destroy the culture and patrimony of true born Caymanian "rabbits". And let us not forget the longer term threat of the higher breeding rates of these incomer, expatriate rabbits. Extend the roll over to rabbits!
Green iguanas versus blues would have been far more appropriate and true.
You be talking agouti?
So, because you are a British citizen who has Caymanian status, you arenow above the rest of us paper Caymanians?
My allegiance runs like this: 1. American, 2. Caymanian, & 3. British.
Can’t take any of them away from me!
Dutifully filed all your tax returns to the IRS (given you priorities and all).
You state "My allegiance runs like this: 1. American, 2. Caymanian, & 3. British". That in a nutshell is the reason you will remain a "paper Caymanian".Your lack of allegiance is the reason I believe "paper Caymanians" should not be allowed to vote or hold elected office in the Cayman Is. Afterall since Being American comes first with you ,it is only fair to expect that any vote that you would make or legislation that you would pass, would put American interests first.A lot of Caymanians believe that your opinion is representative of the majority of "paper Caymanians", hence the popular saying "You are here to go ,we are here to stay"
This article is too deep for me…
I will just leave it to Ezzard to figure out the eligible voters part, Mac to figure out the taxes/revenue part, and Alden to criticize them both.
Then Ellio can propose a referendum, and Frank can write a heart-wrenching article explaining it all, and maybe he will remind us that time is longer than rope…
Great ideas Tim! I would also like to see a lot more people who are eligible to vote actually register to do so. So many people also don't seem to realise that you no longer need to be naturalised (become a British Overseas Territories citizen) to vote, if you already have status.
Tim, as you know the 2009 Constitution significantly expanded the voter base to include status holders. Those status holders should now be in the process of registering as voters. Some estimates place the number eligible but unregistered as high as 10,000. Using the percentage of the adult population currently registered to vote to suggest there should be an expansion of the voter base without taking into account those already eligible but unregistered into account is not a valid argument.
We should of course encourage those who are eligible both to register and to vote. The ESO figures show that around 28% of those eligible to vote have not done so. We do not know how many of that % are recent status grants. But my instinct is that most people, who have obtained status, have registered or will also register to vote. There may be some who have not (possibly because they do not want to do jury service), but hopefully that number is small. Tim Ridley
My point was that we cannot use the statistic of current registered voters to total adult population and ignore the fact that there are so many eligible but unregistered voters. So if we adjust for that unregistered 28% the true percentage of the adult population eligible to vote is about 45%. When we consider that some 20,000 of the 43,000 adult population (46%) are here on work permits that is actually a very good proportion.
Even assuming that you are right in principle (which I question) having just had a major expansion of the franchise it is really too early to call for another one before we've even had an election based on the first one.
Of course this is all true, but the Caymunkind crew will never give up power to furreigners.
It is not a question of true or false. It is really a matter of value judgment based on your perspective. Caymanians are no different from any other people in respect of not wanting to give up power in their own country to foreigners. If the UK were in the same position of having a proportionately large foreign population I can guarantee you there would be absolute resistance by Brits against any such widening of the franchise.
Yes, but Cayman Is not a real country. It is a small town that happens to be on an island where the rules have lead to jokers running the madhouse.
It's funny how when it is convenient some people identify Caymanian as an ethnicity and when it is not ask dumb questions like what is a Caymanian. Cayman is not an independent sovereign nation but it is an island nation.
Where does the Cayman Ambassador to the UN sit?
On a chair.
You clearly have a reading comprehension problem.
No, I don’t. There is only one test of a country as far as I am concerned, the seat at the UN test. No seat no country. You can spout island nation gibberish all you want, but a territory is not nation.
I'll leave you to fight that out with the OED which defines a "nation" as "a large body of people united by common descent, culture, or language, inhabiting a particular state or TERRITORY". Cayman is a nation according to that definition. It is not essential to be a member of the U.N. to be a nation.
Ignorance is bad enough but belligerent ignorance is insufferable.
Now, now. You lost this argument withthe first 5 words. Cayman is not "a large body of people", it is the population of a smallish town. Nor are these people united by common descent (despite the inbreeding) or culture (there being no discernible). So apart from living on a tiny island you have failed to make out your case.
Large is relative. If it did not say "large" each family would be a nation.
I love how the expats run away from claiming that "Caymanian" is an ethnicity as soon as it turns against them! lmao.
At the back of the room in the seats reserved for Mickey Mouse places that are not countries.
Why should real estate be the only investment in Cayman that is singled out for tax? Oh wait, you don't work there. Got it now.
A sensible and broadly based Community Service Charge, combined with a reduction in the upfront stamp duty and some of the egregious fees we now have, would actually work very well and would generate sustainable revenue. And might just get the market reenergised. Tim Ridley
For most of us who have no idea what egregious and anathema means…
Egregious = outstandingly bad, shocking.
Anathema = either "set apart", "banished" or "denounced"
Tim, less pomp and more "clear and concise" would be appreciated x
Sorry, no pomp (or circumstance intended). I thought using two common words, "anathema" and "egregious", was clear, concise and succinct. Tim
True dat. And that is why it will ultimatley fail if left to its own devises. No UK oversite=No future.
It seems we gave it to Mr. Ridley. I had thought he was no longer a furreigner. Say it ain’t so Tim, say it ain’t so!
Under the relevant regime at the time when I arrived in Cayman in 1973, it was possible to be registered as a voter based simply on domicile and residence. I therefore was able to vote in the election soon after my arrival. And long before I received Caymanian status in 1985! Tim Ridley.
…true Tim, but I believe you will find that the fact you were a British Subject was also a requirement.
Correct. Point taken. Tim Ridley