(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.