By Gordon Barlow
In any government budgetary crisis, the natural reaction of politicians and bureaucrats is to raise taxes.
Yes, yes, there will be some sacrifices by government workers – by golly, yes. “We will stop using office photocopiers for personal stuff.” “We will save the little erasers from our used-up pencils and glue them onto Popsicle sticks and re-use them.” And politicians: “We will keep our official cars’ tyres fully inflated at all times.” Well, hot damn.
All contributions welcome, of course, but we were hoping for something a bit more substantial.
The emphasis is on new taxes, though. It’s much more convenient for our pampered MLAs to lift extra money out of the public’s pockets than to cut back on expenses.
The British FCO’s letter of 27th August to our Leader suggests taxes be imposed on salaries and/or property. It also suggests “permanent and sustainable” cuts in public expenditure – and substantial ones, too: something more significant than the little erasers from used-up pencils. The letter doesn’t push for taxes; it leaves it to our MLAs to choose how to balance future annual budgets. Either MLAs take X dollars from us in taxes or they save X dollars in expenses.
The first six million received from a property tax, for instance, would in effect be used to keep the Turtle Farm going for another twelve months. If the Turtle Farm were to be closed down, that same six million might be used for something more productive.
The second six million from a property tax, for instance, might be used to keep government’s propaganda arm (“GIS”) going for another few months, churning out puff pieces of no value to anybody. Or, it could pay for something more helpful to our community.
The challenge in all this is to identify which government activities are productive and which aren’t. We’re in this mess because the people in charge for the past few years haven’t cared enough to make the distinction. Now, in this time of crisis, our new rulers must begin making the distinction. There isn’t enough money coming in any more, to be wasting public revenue on vain and foolish things.
Counting goats
The Turtle Farm and GIS are easy targets for scorn. So are Pedro’s Castle and First Class overseas junkets and the goat-counting task force of the Economic & Statistics Office (ESO). When government has so much money it literally doesn’t know what to do with it, then it can afford to pay people to go out and count goats. But not now. (There were 2,171 of them in the three islands on 31st December last year, Cayman News Service reports.)
Whoever in the ESO has the time to go around counting goats should be fired. That would save at least one Civil Service salary + overtime + lifetime pension + free medical expenses.
There is plenty of waste elsewhere in government that is not quite so obvious. The goat-counters have their equivalents in every government department and agency. Unless we can eliminate all their jobs, we will never reach the stable and sustainable long-term budgetary balance that the FCO requires.
As for a wages tax: depending on the tax rate, it could add as much as fifty million a year to public revenue. That would save sacking a lot of unproductive workers, who if we had an efficient and frugal system of governance would not be employed in the first place. What an unnecessary luxury they are.
Imagine how delighted you will be in a few months from now, every time you look at your payslip with its deduction for tax. How thrilled you will be to know that the tax has been passed into the hands of some government goat-counter or equivalent. Or some Immigration Officer whose job is to keep track of his friends’ and relatives’ work permits. Look for grateful smiles from the beneficiaries of your gifts, when you meet them.
“Core” government covers police and prison officers, schoolteachers and administrators, primary- healthcare providers, social-service workers, Customs and Immigration officers, and sundry inspectors. All of those departments waste money, but they do have core elements. Every service outside the actual core services is dispensable. If it is worth doing, let the private sector do it.
Political cronies
Three other things to bear in mind in this whole debate over taxes.
- The cost of collection. Do we really want a new Tax Collection Authority run by political cronies and relatives, with power to snoop into our wages and (for those self-employed) profits? We know how the immigration-related boards work, with their political cronies... Could the prospect of discovering everybody’s income be the real reason why we are hearing plenty about new taxes and not much about cutting expenses?
- If our MLAs come up with a plan for new taxes by next Monday, the FCO will give them permission to borrow more money and to put the Islands even further in debt. Cayman is already hugely over-borrowed. Is fiscal prudence never to become a factor in our governance?
- All new taxes become permanent, all over the world. There is no such thing as a temporary tax. The British income tax, after a couple of false starts, was imposed in 1842 to balance the national budget of that year. It has never gone away, and nor will ours go away.
And here’s a fourth thing. We in Cayman have access to the most skilful tax-lawyers in the world. Does the FCO really believe those skills won’t be used against any local taxes?
Oh, come on. | 
