A dark and stormy forecast
I very much enjoyed your editorial this morning (February 3, 2020) and think that it would be very helpful to our community if you could do one which would explain the competitive advantage of the Cayman Islands, in greater detail.
The reasons for the difference are not widely understood in our community, but important for us all to understand.
I was recently in Grand Cayman and had the pleasure of having dinner with a close friend who is a senior executive of an international company, present in both Bermuda and Cayman.
I had not previously realised until he mentioned it, that Cayman does not have any payroll tax at all. It relies rather on larger work-permit fees, as much as about $39,500 for senior management personnel. I understand that difference in the cost of doing business between us and them is now very large.
Looking at international business, if a business in the Cayman Islands, for example, wants to hire a relatively newly qualified CPA, the total cost to a business there will likely be more than 30 per cent less than in Bermuda; it is no wonder that many businesses prefer to base themselves there, rather than here.
Whereas our rate of national growth was virtually flat last year, their economy grew at a rate of about 3 per cent.
The differences are stunning. Their office buildings are full and new office buildings are being built while we have hundreds of thousands of square feet of office space empty.
Commercial rents there are rising while our rents have fallen to a level more or less as they were in 1985. Some of our office buildings now are completely empty and on their way to ruin.
All of our politicians, whether Progressive Labour Party, One Bermuda Alliance, or whoever, understand that we have a falling number of workers on deck to support an ageing population. If these trends continue, we are not going to be able to provide the healthcare that our older citizens will need and deserve, and our national pension plan may one day fail.
The national debt of the Cayman Islands has fallen to about $400 million, while ours has risen to about $2.7 billion, with other off-balance sheet debts to deal with as well.
We are struggling to balance our debt and are forced now to raise taxes to do so, while Cayman is heading to pay off its debt this year.
The leaders of the old United Bermuda Party might have failed in many respects, but they at least had a basic respect for the danger of borrowing money and of being caught in the “debt trap”!
The outlook ahead for us, if we keep this up, may indeed be “dark and stormy”.
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