What has been revealed thus far in the AG's report on the SPIT team, the way they played the system because no independent control was exercised over them, does not make comfortable reading. What a desertion is revealed from the principles and standards of the UK, which the Governor is supposed to represent and uphold in the Cayman Islands.
The SPIT boys were laughing so loud on the way to the bank it could have triggered a minor seismic alert but still Jack couldn't hear it and all Cayman has to show for this farrago of an investigation is a series of continuing aftershocks.
If the name was Misick and not Jack somebody from London would be flying out now to see what Jack had been getting up to.
Let's hope "for Jack's sake" that all the expenses he signed off for SPIT were legitimate in case his actions become the subject of a special investigation of their own.
Monday 12 October 2009
Friday 25 September 2009
Saturday 5 September 2009
Tax Free or Debt Free?
I don't think Ridley's notion of a one quarter of one percent levy on domestic property, with exclusions and safeguards for those of modest means, should be cast aside so quickly.
Notice I select the word levy not tax to avoid an immediate outbreak of hysteria from the more excitable and vociferous parts of the population with their fingers hovering over the speed dial for the radio talk shows.
Let's adopt even less threatening language, let's call it a Super-Strata fee, a payment towards the general infrastructure, environmental protections and government interventions that enhance the value of property.
After all is it fair that hard working Caymanians of modest means should be continuously underwriting the capital gains of (often) well heeled and (sometimes) absentee overseas owners? Since the benefits of good infrastructure are continuous is it too much to ask for a continuing small contribution instead of the present one-off stamp duty?
The current proposals to sell government assets to the private sector and the lease/rent/buy back via instalments amounts to government taking out a mortgage that your children will pay for, whatever their financial means.
Mac won't be getting a finders fees this way either.
Hard to collect? Not really. People who try and wriggle out of it don't get the documentation to sell their property until they pay up.
I can hear the headless chicken tendency grumbling over their dominoes now, "Call it what you will it's still TAX". Maybe but so is fuel duty, import duty etc, vehicle coupon fee.
And look at what it isn't. It isn't a Sales Tax. It isn't an Income Tax. It isn't Capital Gains tax. It isn't Corporation Tax. It isn't a Land Tax. It isn't Inheritance Tax. It's the lack of those sort of taxes that keeps Cayman a popular offshore centre.
All the above aside an axe need taking to government spending too and a tiny fraction of those savings will pay for the administration of this if it's done right.
Notice I select the word levy not tax to avoid an immediate outbreak of hysteria from the more excitable and vociferous parts of the population with their fingers hovering over the speed dial for the radio talk shows.
Let's adopt even less threatening language, let's call it a Super-Strata fee, a payment towards the general infrastructure, environmental protections and government interventions that enhance the value of property.
After all is it fair that hard working Caymanians of modest means should be continuously underwriting the capital gains of (often) well heeled and (sometimes) absentee overseas owners? Since the benefits of good infrastructure are continuous is it too much to ask for a continuing small contribution instead of the present one-off stamp duty?
The current proposals to sell government assets to the private sector and the lease/rent/buy back via instalments amounts to government taking out a mortgage that your children will pay for, whatever their financial means.
Mac won't be getting a finders fees this way either.
Hard to collect? Not really. People who try and wriggle out of it don't get the documentation to sell their property until they pay up.
I can hear the headless chicken tendency grumbling over their dominoes now, "Call it what you will it's still TAX". Maybe but so is fuel duty, import duty etc, vehicle coupon fee.
And look at what it isn't. It isn't a Sales Tax. It isn't an Income Tax. It isn't Capital Gains tax. It isn't Corporation Tax. It isn't a Land Tax. It isn't Inheritance Tax. It's the lack of those sort of taxes that keeps Cayman a popular offshore centre.
All the above aside an axe need taking to government spending too and a tiny fraction of those savings will pay for the administration of this if it's done right.
Saturday 29 August 2009
Government's financial crisis. Why It doesn't add up.
All rumors to the contrary no British MI5 agent held a gun to anybody's head in Cayman and said "Spend like there is no tomorrow or there will be no tomorrow".
The government's funding gap was incubated and hatched by the Finance Department of the Civil Service which lost financial control after introducing new accounting procedures into an environment prone to profligate spending. The cure proved worse than the disease. Allowing inadequate accounting to persist for years compounded the problem and emboldened the overspenders.
As recently as last year the Financial Secretary said there wasn't an accounting problem, only some technical issues surrounding the new accounting rules; some departmental Accounting Officers had experienced difficulty in distinguishing their inputs from their outputs. In an organization where arses and elbows are routinely confused this excuse may have been expected but it should not have been accepted.
While money flowed into government coffers quicker than it flowed out all seemed well with the world until, under a little extra financial stress, the facade collapsed like any other Ponzi scheme. To tip the financial balance far into the red all it took was a foreseeable and oft predicted drop in overall income combined with the usual year end blowout, "Spend everything left in the budget this year or they'll cut your budget for next year". For sure all that money will now be cut for the next financial year and a few jobs too for good measure.
Though the Governor (titular head of the CI Civil Service) has investigated several petty professional squabbles at great length and expense he hasn't pressed the "good governance" nuclear button on something as serious as this financial crisis is supposed to be.
It's no good the Governor delegating his authority or relying for advice on the same people who were supposed to improve financial control and/or have management oversight, they weren't up to the job the first time around.
Get an FOI request in for the senior people involved in implementing the new financial controls, including those "retired" but panhandling as the Governor's advisors. In at least one very senior case they have not only no professional financial or managerial qualifications but no post high school professional or academic attainments of any kind. And I don't mean Bush although that is true of him too. Is it a case of those who pray together stay together?
Until government's financial accountability problem is fixed any money that Cayman borrows will be spent exactly the same way as the first wad was. Unaccountably. Who is going to lend money to a borrower like that even if the UK lifted borrowing restrictions?
Loan sharks maybe?
If something needs to be cut quickly then the governor should cut out the McKeevanomics and, since Bush owns Jefferson, get some independent oversight of the Finance Department and some insight into Government's true financial position. It may not be as black, or should that be red, as it's being painted.
Elections are expensive and hyping up this financial crisis lends itself to all manner of players thinking the unthinkable and finding opportunities to slip in some payback. The Ritz will be getting a casino and the Brac and Little Cayman development plans will be ripped up to allow for more real estate activity. The environmental corner cutting in the haste to construct a cruise terminal may destroy for good one of the mainstays of stopover tourism, 7 Mile Beach.
To avoid more debt going on the government balance sheet future capital schemes will probably be privately financed like Boatswain's Beach and we won't ask too carefully about where the money is actually coming from. Probably the lion's share will be via a locally fronted shell company based in one of the less transparent offshore jurisdictions. Whose money it really is who knows?
The government's funding gap was incubated and hatched by the Finance Department of the Civil Service which lost financial control after introducing new accounting procedures into an environment prone to profligate spending. The cure proved worse than the disease. Allowing inadequate accounting to persist for years compounded the problem and emboldened the overspenders.
As recently as last year the Financial Secretary said there wasn't an accounting problem, only some technical issues surrounding the new accounting rules; some departmental Accounting Officers had experienced difficulty in distinguishing their inputs from their outputs. In an organization where arses and elbows are routinely confused this excuse may have been expected but it should not have been accepted.
While money flowed into government coffers quicker than it flowed out all seemed well with the world until, under a little extra financial stress, the facade collapsed like any other Ponzi scheme. To tip the financial balance far into the red all it took was a foreseeable and oft predicted drop in overall income combined with the usual year end blowout, "Spend everything left in the budget this year or they'll cut your budget for next year". For sure all that money will now be cut for the next financial year and a few jobs too for good measure.
Though the Governor (titular head of the CI Civil Service) has investigated several petty professional squabbles at great length and expense he hasn't pressed the "good governance" nuclear button on something as serious as this financial crisis is supposed to be.
It's no good the Governor delegating his authority or relying for advice on the same people who were supposed to improve financial control and/or have management oversight, they weren't up to the job the first time around.
Get an FOI request in for the senior people involved in implementing the new financial controls, including those "retired" but panhandling as the Governor's advisors. In at least one very senior case they have not only no professional financial or managerial qualifications but no post high school professional or academic attainments of any kind. And I don't mean Bush although that is true of him too. Is it a case of those who pray together stay together?
Until government's financial accountability problem is fixed any money that Cayman borrows will be spent exactly the same way as the first wad was. Unaccountably. Who is going to lend money to a borrower like that even if the UK lifted borrowing restrictions?
Loan sharks maybe?
If something needs to be cut quickly then the governor should cut out the McKeevanomics and, since Bush owns Jefferson, get some independent oversight of the Finance Department and some insight into Government's true financial position. It may not be as black, or should that be red, as it's being painted.
Elections are expensive and hyping up this financial crisis lends itself to all manner of players thinking the unthinkable and finding opportunities to slip in some payback. The Ritz will be getting a casino and the Brac and Little Cayman development plans will be ripped up to allow for more real estate activity. The environmental corner cutting in the haste to construct a cruise terminal may destroy for good one of the mainstays of stopover tourism, 7 Mile Beach.
To avoid more debt going on the government balance sheet future capital schemes will probably be privately financed like Boatswain's Beach and we won't ask too carefully about where the money is actually coming from. Probably the lion's share will be via a locally fronted shell company based in one of the less transparent offshore jurisdictions. Whose money it really is who knows?
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