Building duty cuts roll on despite economic boom
(CNS): Government has confirmed that the 15% import duty concessions on building materials imported to Grand Cayman will continue next year, despite the current development boom and what the finance ministry called the “robust investments” in Cayman’s economy. The duty cut was originally implemented to encourage development during the recession, but according to the latest government statistics, the economy grew much more than originally predicted this year, with imports at their highest levels since 2005 and inflation running at 4.8%.
Nevertheless, in a release about the continuation of the duty cut for the construction and development sector, Finance and Economic Development Minister Roy McTaggart said he wanted to see the growth continue.
“The government is committed to ensuring that the islands’ economy continues to grow, because such growth will provide employment opportunities for Caymanians and other residents,” he said. “The extension of the 15% import duty concessionary rate on building materials brought to Grand Cayman will undoubtedly add incentive for the private sector’s robust investments in the Cayman Islands to continue.”
Speaking in the Legislative Assembly Monday night, the premier declared that Cayman no longer had an unemployment problem, as he suggested the rate was so low it was down to structural levels. The latest labour force survey published in August by the Economics and Statistics Office revealed a national unemployment rate of 3.4%, with 5.3% of Caymanians who want to work looking for a job. Although the autumn survey has now been completed, the results are not yet available.
On Monday, as he took aim at his opposition critics during the debate about the legal changes for the offshore sector and the possible population boom, McLaughlin described the unemployment rate in Cayman that the opposition has spoken about as “imaginary”.
“We are at a level now where the economists will refer to it as structural unemployment,” he said. Denying that there were thousands of jobless Caymanians, he said, “No matter what you do there will always be a certain percentage of the labour force that is unemployed.”
Government leaders appear to remain confident that the economy is doing well, so, with growing concerns about over-development, it’s not clear why government feels it needs to keep fueling the construction industry and not reexamine other areas of the economy where duty concessions or business fee cuts might be more constructive, especially for the small business sector.
The concessions relate directly to building materials, defined as the physical components and substances, solid or liquid, used in the construction, renovation or restoration and anything that forms the permanent part of any building or related structure. Furniture, accessories, electronics and appliances are specifically excluded from the 15% duty cut.
The duty concessions on Cayman Brac and Little Cayman will continue until December 2020. There is a 100% import duty waiver on building materials imported to the Sister Islands as well as a 100% stamp duty waiver on land purchases on Cayman Brac. There is also a 12.5 cents per gallon concessionary rate on the importation of fuel to the Brac.
Category: Business, Construction
1) Its not Government’s job to see that ‘tax cuts’ get passed on to the consumer. That’s the consumer’s job by shopping around and castigating the stores that don’t. Make enough noise and the store will either lower their price properly or be competed out of business by the store that did care for its customers.
2) Its time to slowly raise the development taxes back to ‘normal’ rates. (I can understand the Brac duty cuts, but the GC & LC cuts are currently unnecessary.)
2b) Yes that means building a home will be more expensive. Yes cost of living is high. But taxes – a mere fraction of the cost at port – aren’t the real cost of living drivers on anything. The solution is better wages (lower profits) not lower Govt. taxes/services.
You obviously don’t own a small business. Some small businesses already operate on minimal profits and some operate to cover the owners salaries alone. Government already make major profits on duties, vehicle licensing fees etc. Add the fact that they spend a lot of tax payers money on unnecessary trips, countless independent studies on outrageous projects and building outlandish buildings (the schools an example), it is more than fair that they should be the ones to help reduce the cost of doing business. Economics clearly shows that when small and mid level business strive, the overall economy does better which will also result in the government making more money. It’s more profitable for 1,000 people to spend $100 than 100 people spend $500.
One good reason for this – kickbacks?
Unbelievable, absolutely unbelievable. Spraying starter fluid in the carburetor of a car going 100mph
I happened to keep my pricing for lumber on a personal project from 5 years ago and did a cost comparison last month when doing another project. In most cases 2x lumber had increased as much as 30%. So assuming these concessions are being passed onto consumers, that would mean lumber has actually increased to 37% in 5 years?!?!? For some reason, I dont think concessions ever get passed on!!
Terrible economic policy. While the Fed raises interest rates to slow the economy Cayman extends cuts to spur the economy despite rising inflation.
Numbers look good on paper but in reality, the small construction companies, the Caymanian owned real estate companies and consumers are not seeing the benefits. Recently went to a local hardware company to purchase a plumbing part the part was $32 at hardware A, yet at hardware B, it was $18.52. Same brand and same code. Why such a large price difference at hardware A? Certainly, both companies are here to make a profit but almost a 50% mark up than the other store? Who is policing this incentive? It appears the national discount is not being passed on to the consumers.
I can tell you one of the companies don’t care if they sell you anything cause they can just writeoff the inventory and give to friends as long as their drug trade business keeps going.
I wonder if this government and Mr McTaggart know the size of the Grand Cayman . I believe that they have fallen into the same big developer’s mentality, build now today and to hell with tomorrow and the future . Remember that the Developers don’t care after he/she has gotten richer in a few years . I hope that the Citizens wake up and tell the government that we don’t want to live packed like sardines are packed in the can.
I want to let everyone know that I am not against development , but the way I look at it on a Island the size G C , is that you shouldn’t do it all in a few years . The government needs to think outside the cement box and know that there’s other ways to create employment and revenue .
Waiting to read some comments about how wonderful this government is doing for the fools that voted them in.
I’ll be back tomorrow…….
HERE??? You won’t read any comments that are in any way supportive of government here. I’m not even certain any government of any year could do anything that would garner favorable comment.
Not as long as bitching without solutions is the national pastime.
what about inflation?
Yep nothing new
and the businesses that benefit from these changes are the ones the PPM raises their money from
Where else do you think they got 500,000 dollars to spend in the last election
https://portal.elections.ky/files/downloads/ge2017/Candidate-Election-Expense-Return-Report-Summary-May-2017-General-Election.pdf
Cayman is an oligarchy run by and for business interests not a representative democracy one only needs to look at the port project to figure that out
Yay, I am so glad that this cost reduction will continue to be passed onto consumers… oh… wait…
Governments don’t pass anything on to the consumer for them to keep, because the next entity takes it right back from you . Think about it .
How about we get a little respite on Food and Fuel. The people are being squeezed for every last dollar.
Hey CNS please find out why Little Cayman was not included in the waiver of stamp duty for land purchases. If a local person wants to buy land how come we have to pay stamp duty on Little Cayman and not Cayman Brac.
Is the economy so bad on the Brac that they have to do it? If so, our economy is certainly no better and certainly no cheaper – hence the argument that the powers-to-be can waive the stamp duty for Little Cayman (hello Mr. Roy McTaggart am asking your assistance).
Because Dart owns Little Cayman.
This government sure looks after certain groups i.e. their lodge buddies. While screwing the rest of us i.e. the fuel tax.
12.5 p cent duty cut on fuel on the Brac is making the gas stations rich while killing the people for the gas is still. $5.14 p g thats about $ 1.45 per gal profit and they sell about 35 k, per mth
$1.99 in New Orleans today.
Little Cayman KYD 6.03 pg?
Little Cayman pays .75 cents per gal duties an .30 cents per gal freight onthe Barge from the Brac. Thats $1.05, an the Brac only pays .12 1/2 cents duties
Who is Chairman of the Central Planning Authority and part-owner of the largest hardware/building supplier in Cayman?
Stop being stupid about this whole web.
Only more price gouging. The poor get poorer and the rich get richer, but there is one thing, none of them can carry their richess to that lonely place.
I told you before, stop telling the truth. It is very inconvenient.