By Dave Schudel and Jack Benz

Someone profits from offshore banking, and it’s the offshore banks. In a letter earlier in the year to the paper, it was pointed out that some of this money could be fed back into the community in the form of business loans and grants to help society and particularly the poorer people in Cayman. Seemed like a fair point.

Then I thought about it some more. I mean, we’ve all seen the little government taxes that appear on our savings balance sheets. I assume these dollars here and there are going to the government and if so, when you start adding up the island wealth, that’s probably a chunk of tax going right back into the island. Revenue is also generated through road tax (or ‘coupon’ as it is lovingly called – it’s not a tax at all, right?), island exit fees, stamp duty tax and so on.

But is it enough?

Well, companies make business in order to grow and to satisfy their owners, directors and shareholders. Often part of their goal is to help the community, as helping the community usually gains more customers. Most of our major banks take part in numerous island events and projects, and use them to put something back into the island whilst giving a little advertising and growing their public relations.

The situation is a bit different for offshore banks as most have no retail outlet. Their customers are mostly not local and they have no real need to advertise on the island. There is no business benefit to contribute to the island financially, but do they contribute already?

You see, many of these establishments aren’t without staff. For every person employed, whether Caymanian or immigrant, they will be paying rent/mortgage, utility, banking fees, groceries, food, drink, fuel and so on. Each person is putting back into the local community from their salaries and that helps provide jobs for everyone. More jobs, means more local money.

To then ask a financial institution to contribute more isn’t wrong, and I would hope most of them would at least consider what they could do as, after all, good relationships with the community benefit everyone. However, no business should be required to contribute because offshore means… offshore; it doesn’t mean ‘Cayman’. If we squeeze too hard, then the company could just up sticks and head somewhere else where, as an added bonus, their cost of rent, recruitment and living might be only half that of Cayman. If you see it from a business owner’s perspective, they probably think that they contribute quite a lot as it is.

It’s not to say more can’t be done, as it always can, but I do think that money is only part of a formula for society that also needs to include opportunity, motivation and the willingness to work hard. For those unable to support themselves, Cayman already has programs to help through government, the church, charities and community. To tax businesses in a time where banks are running for cover might not be a great strategy. We need that independent revenue to keep jobs in Cayman. One person, even an immigrant, can put over ten thousand dollars per year back into the economy which helps to keep everyone else in work and that, in turn, helps us all look after the needy.

Consequently, one more offshore bank that moves its operation to, say, Switzerland, BVI, Panama or the Bahamas takes with them those tens of thousands of dollars that was once being poured into the Cayman economy.

To help those less fortunate, perhaps Cayman needs to think about making better use with what it already has. For example, let’s add up the financial cost of changing the name of Pirate’s Week (flyers, banners, advertising, T-shirts, souvenirs, web-sites, salaries for consultants, etc.) and give that to the poor instead…