Absolutely amazing - our leaders are knocking heads together trying to figure out where to get $25 million by May to meet Government’s recurring expenditure for this year!
They have also swallowed some ‘pride pills’ and gone crawling to the EU to try to engage a few million Euros in ‘hurricane relief – Say what?
I cannot be hearing correctly. Is this really happening in this, our little “crown jewel” of the Caribbean, whose economy is envied by most, wanted by some and loved by all? This little green speck on the map, (hardly visible to the naked eye) where it is said that the volume of currency flowing through its financial portals, is in the trillion of U.S. dollars per annum?
$25 million – why this is mere pocket money – or more specifically just a little ‘token of appreciation’ popped into a recent ‘thank-you’ (early retirement) package of a senior partner at one of the local major law firms, who incidentally was retiring at the ripe old age of forty five.
Totally unbelievable, this poor little, rich Island that could not be seen to accept outside offers of assistance following the now, historic “Ivan” devastation, for fear that it might send out the wrong message to visitors/investors?
Now we have the Director of Social Services going on record as saying, “more people than ever are applying for welfare because they just can’t make ends meet.”
It appears that the Government itself is in the same position and that indeed must now also apply for ‘welfare assistance’ from the mother country. According to a Lecturer in Economics at UCCI “in any other First world country like the U.S, Canada or the U.K, 7 percent inflation would cause a political crisis”. Hello, anybody out there?
Anybody listening? Against such a backdrop, isn’t it amazing that the only significant pay increases awarded in recent times (double digit percentages at that), were to the top elected Government officials?
In my opinion, we have a major crisis on our hands and the leaders of this government must take swift, corrective action. The answers seem so obvious to us on the outside. Of course, we are not high priced, ‘experts, consultants…professionals, etc.’ so the odds of ever being taken seriously by a Government that is in a financial dilemma are extremely slim, probably standing approximately the same chance as the proverbial ‘camel getting through the eye of the needle’.
Our revenue sources are few, since we are basically a barren, non-agricultural, non-industrial, non-producing anything of any significance, tri-island country and this makes the job much simpler.
We have only three significant contributing sources of revenue:
1. Local consumers
2. Tourism industry
3. Financial industry
Looking at each of the above individually, it is very easy to conclude that:
Local consumers are already over-taxed, over-burdened and can bear no more taxation;
Tourism industry: meaningful stay-over tourism has always been ‘directly’ taxed in the form of a 10 percent per room night “Tourism Accommodation Tax”; it is also unfortunate to note that this mainstay of the economy has been ‘traded-off’ for what would appear to be the more lucrative short-term gain of the less attractive and dangerous ‘cruise tourism’, which pays a ‘per-head’ tax.
Financial Industry: – Aha!! This is the one that must bear the burden. After all this is the culprit who has the rest of the world seeing us as this super, rich fifth largest financial centre in the world!
It is absolutely ludicrous to be sporting this “Fifth Largest Financial Centre” Trophy, (which deprives us of any outside sympathy and aid) but in essence have nothing to show but a bankrupt government tearing their hair out (those who have any left).
Of course the financial sector does not want to hear this, but hear this they must. One only has to examine the Profit and Loss Statements of the big players, (banks and trust companies, lawyers, accountants and auditors, etc.); they are not operating at a loss but our Government is! I am not referring to any increase in the current license and other related fees. What the Government needs is a ‘slice of the multi-trillion dollar pie’!
Government, hear ye, hear ye, hear ye! Just look at the way these entities run their businesses – they charge fees for the services they deliver.
There is absolutely no regulation that determines how much a financial services provider may charge, but generally charges are calculated on a percentage basis and usually referred to as ‘transaction fees’. My suggestion is for government to make this as simple as possible and let the financial professionals do the work; after all this is what they do (and they are very good at it).
There is no need to make this a complicated exercise; very clearly and simply, mandate that each and every provider in the financial services industry “add a little extra” to their slice of the pie, which they will in turn submit to Government monthly with a supporting statement.
This is exactly the way the returns are done in the tourism sector and there is a cut-off date by which the submissions must reach the Government’s Treasury department each month. I would suggest that the Government begin by establishing a mandatory fee of one-half of one-percent on each and every transaction and for the purposes of this exercise we shall establish a cumulative figure of one trillion U.S. dollars per annum.
Now I am not the accountant here and I may have a little difficulty determining exactly what the results of this equation is, but I feel quite confident in saying that this could solve the financial woes of our “poor, little, rich country.”
Ellis Lomart
