EPF misused as tax goes up
(CNS): Government will soon be increasing the tax it collects from people departing the islands as part of its revenue raising measures for this year’s budget. Some of those tax dollars should be earmarked for environmental protection but they are being used instead to help government remain compliant with the Public Management and Finance Law and not for conservation. Ever since the Environmental Protection Fund, drawn from departure taxes, was established in the 1990s, government has misused the fund by dipping into it for road maintenance or post hurricane clean-ups and more recently as a way of maintaining the necessary bank balance to meet its own public finance parameters.
With the exception of $200,000 spent on the Brac Parrot reserve some time ago, the more than $43 million that currently sits in government accounts, accoording tot he latest budget documents, has never be used as it was intended -- to buy land that can be used to protect some of Cayman’s unique but endangered habitat.
As Cayman faces multiple environmental problems and more and more land is cleared in the face of relentless development, the money that should be accessible to address problems such as the critically endangered ghost orchid, the declining parrot population and the desperate need to protect certain habitats from the bulldozer is cut off from the purpose for which it was intended and tied up in government’s reserves.
Although government will be increasing the money it takes from those passing through the airport and those travelling to Cayman by boat, other than on a cruise ship, it is very unlikely that the new cash will be channelled into the EPF.
Government is expected to steer the bill to amend the Travel (Departure Tax and Environmental Protection Fee) Law (2003 Revision) when it returns to the Legislative Assembly next month. The fee increase of $10 is part of a number of increases to various revenue measures which formed part of the delayed 2011/12 budget in order for government to gain UK approval for its spending plans for this financial year. This increase, together with an increase on the tourism accommodation tax from 10% to 13% is expected to generate over $3.1 million
Government currently takes $3.20 from air passengers and $1.60 from each cruise passenger from the departure fees for the Environmental Protection Fund. It is not clear yet if any of the new revenue generated from the departure tax increase of $10 will be directed to the fund. Even if it is, there is no indication that environmental protection issues are set to improve.
Currently, most of the environmental projects that are undertaken by the Department of the Environment or the National Trust are either funded through the private sector, individual donations, or grants from international organisations and transnational bodies and NGOs.
However, in the wake of the planning department’s decision to allow a developer to rip out mangroves that had been part of a replenishment project in South Sound, funded by an outside international grant, Cayman’s applications for future funding may well be viewed more sceptically on the international stage. With government appearing to be contradicting itself when it comes to its position on protecting the environment, access to grants in a competitive world are likely to dwindle.
The failure of government to pass the National Conservation Law has already seen Cayman lose out on some international awards for conservation regarding parrots, because the government is not seen as being committed to environmental protection and because it appears to already have $40 million earmarked for such projects that it is not properly utilizing.
The original intention of the fund, which was set up in 1997, was to acquire land for conservation purposes but it has been used instead to pad out the public purse and allow government to meet obligations in the PMFL that require a certain level of funds to cover 90 days of the costs of government at any given time.
The DoE has persistently taken the position that the money is meant to be used to buy land identified as critical habitat for conservation. The sentiments were echoed by National Trust chair Carla Reid recently when she spoke to CNS about the challenges faced by the Trust in its goal to increase the percentage of land currently protected in Cayman from a meagre 5% to 10% before 2020. She, too, said that with millions of dollars sitting in the fund government could help conservation efforts by buying up land and giving it to the Trust to protect.
The DoE director has also noted that her department cannot plan with any confidence what land it should be seeking to purchase because it does not know to what extent the fund is going to be tied up helping government comply with its financial legal requirements.
With the NCL still gathering dust after numerous consultations over the last few years and little political will for the law to be steered through the Legislative Assembly, the problem of the fund being diverted from the environment is compounded. The current environmental minister has proved to have very little interest in that part of his ministerial responsibilities and while, like his predecessor, he has said on many occasions that the government is committed to the bill, there is zero evidence of that claim.
With no comprehensive law to protect the natural environment, a minister with little interest, other arms of government undermining the work of the DoE, the National Trust funding cut and fundraising becoming ever more competitive, the diversion of the Environmental Protection Fund is just one more nail in the coffin, many conservation experts now believe, for Cayman’s natural resources.
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