By Gordon Barlow

Our $279 million bailout from Britain won’t go far. According to news reports, $169 million of it will go straight to paying off other loans. That’s not much progress, is it?

$75 million is earmarked for “existing capital projects”: that’s the schools, presumably. Only $35 million is to meet recurrent expenditure and sundry other loan repayments. So why is everybody celebrating?

(Oh, and yes it is a bailout. When you run out of money to pay your bills and somebody lends you money, that’s a bailout. Lawyers may quibble, but it’s time to call a spade a spade.)

So some of our government’s debts have been consolidated. Individuals do it all the time, with credit-card debts. There’s no debt-reduction to applaud.

Our public revenue needs to be permanently boosted by 20% or so, to balance the books. Permanently, mind you. The new taxes will never be removed and the increases will never be reversed, even if our economy bounces back to what it was – which it probably won’t.

Government’s options are clear: either cut expenditure or add taxes. That choice will return every twelve months. It’s a fair bet that the same decision will be made every time: don’t cut expenditure, and do increase taxes.

The new property tax will save the jobs of twenty or thirty surplus civil servants. It will start at a modest 10% of commercial rentals; then it will become 10% of all rentals; then 10% of notional rental values of all households. We might as well call it a property tax from day one.

The 2% tax on helpers’ and gardeners’ remittances home will save closing the Turtle Farm for a few months. But what if they start sending their savings home with friends instead of using Western Union?

Then the 2% will need to be increased to 3%. And if the number of poor migrants falls away because there aren’t jobs for them, then the 3% will need to become 4%, and then 5%, and so on.

If Government won’t reduce its bloated bureaucracy at all, then the tax on helpers’ and gardeners’ transfers will be extended to bank transfers by all non-Caymanians, and later by all residents. College fees and allowances, credit card and PayPal payments – all of those and more will be caught in the net.


A British colony

By borrowing far more than it could comfortably repay, our last government forced our London masters to take the governance of Cayman’s finances out of the MLAs’ hands.

Our Financial Secretary (who is a British civil servant anyway) seems to have been relieved of his main duties – or at least been forcefully reminded of them. He’ll continue to be allowed to check that the invoices are added up correctly, but not much more. In effect, the FCO has judged the C I Government as being not competent to manage its own financial affairs.

We as a community should never overlook the fact that we are a British colony. The FCO’s job is to protect Britain’s national interests – nothing more, nothing less. All the foreign wars, all the bribery of foreign politicians, all the coups, all the spies – all are necessary in the protection of British business interests. And much of the money to pay for those things is channelled through the world’s tax-havens.

We can’t measure exactly and in detail how important Cayman is to Britain’s national interests. A long way below Iran and Kazakhstan, probably, but not as far down as Haiti and Montserrat.

There’s a lot of talk about Britain wanting to close down Cayman’s tax-haven. I don’t believe it. She could close us down in a day, if she wanted.


Budgetary fiasco

Think of the arrangement in corporate terms. The FCO provides Cayman’s board of directors, in the persons of sundry junior civil servants in London supervised by a House of Commons committee. They appoint a managing director with the title of Governor, a senior vice-president who is our Chief Secretary, a chief financial officer called the Financial Secretary, and a corporate lawyer called an Attorney General. Sundry V-Ps run the police, prisons, immigration, and civil service.

Off to the side, there is a Potemkin regime of native Caymanians solemnly endorsed every four years on the understanding that they will look after their own affairs and not screw around with the main business of being a colony.

Every so often, in one colony or another, the local politicians step over the line and have to be dragged back behind it. That’s what just happened to us. Our fiscal crises are trivial compared to the catastrophic shambles in Britain itself, but we provide a handy scapegoat – something to distract the British voters. The FCO chaps were ordered to crack the whip over Cayman, and crack it they have.

They will continue cracking it until we have our act together again. Our MLAs are fiscally inept, and must be guided anew. Their only experience is in competing to build bureaucratic empires. They have no experience of frugality or responsible management, and no first-hand exposure to it. They don’t understand the relationship between a colony and its master.

Their natural instinct is to stick to what they know – frittering public moneys away on keeping the voters quiet and shouting slogans from the bridge of a burning ship that they don’t realise is burning. The FCO’s natural instinct is to find it all too boring to bother with. That is equally irresponsible.

Cayman’s present budgetary fiasco is as much Britain’s fault as our own.