Dear Member,
The cost of doing business, the cost of living, public sector reform, crime and public safety, Government bureaucracy and inefficiencies and the limited supply of local labour in highly skilled and unskilled positions to meet the needs of an expanding economy remain top advocacy issues identified by the membership for the Council to address with Government and public sector leaders. Over the past year the Council has acted on your behalf and held meetings with Government Ministers, the Governor, the Police Commissioner, senior Ministry staff and the Auditor General and has submitted position papers, recommendations and proposals for consideration to address several of these matters in an effort to improve the business environment and to stimulate economic growth.
On behalf of the Council, I am pleased to report that several of our recommendations have been considered and supported by the Government and are included in the proposed Budget and Strategic Policy Statement for 2015-16. These include amendments to the Sunday Trading Law to clarify which businesses can remain open for business on Sunday, the introduction of Daylight Savings Time in March 2016, the reduction of business costs by lowering diesel duty rates on fuel by .25 cents in January 2016 (duty was lowered by .25 cents in the 2014/2015 Budget). These decisions are positive for business and will reduce costs and improve business prospects for our members. Some of these matters have been advocated by successive Chamber Councils for decades.
The proposed Budget includes no new revenue measures, reduces the national debt, increases Government’s cash reserves and delivers a surplus with no need to borrow to fund recurrent expenditure. We commend the Government and the Minister of Finance and Economic Development for controlling operating expenditures, limiting capital investments, decreasing public debt and refraining from additional long term borrowings. These are objectives that we support along with Government’s four main strategic priorities: practicing good governance, supporting tourism and financial services, developing needed infrastructure and encouraging a positive business environment.
These strategies align with the five drivers in the Chamber’s Future of Cayman Economic Development Initiative www.futureofcayman.com (Develop Talent, Create a Business Friendly Climate, Build a Smarter Infrastructure, Enhance the Quality of Life and Diversify the Economy). These five drivers were endorsed and supported by all public and private sector stakeholders that participated in the focus groups and discussions in 2010 and 2012 and reconfirmed as priorities by the current Government. We maintain that these strategic priorities and drivers remain at the core of the Cayman Islands current and future success and we will continue to advocate that they remain national priorities.
PUBLIC SECTOR REFORM: The Council urges Government in the upcoming fiscal year that begins in July to accelerate the pace of public sector reform and to press ahead with evaluating and selecting the recommendations that will be developed into business cases for review by the Project Future Steering Committee. The Chamber has advocated and supported privatisation and outsourcing as key strategies for reducing the size and expense of the public sector and improving efficiencies. We oppose Government providing services that are best delivered by the private sector. Government works best in a free enterprise system when it facilitates an enabling environment for private sector business growth, development and investment.
In a letter to the Deputy Governor and copied to the Premier dated 8th May 2014, the Council identified six areas for the Government to address in its efforts toward public sector reform and we urge Government to press ahead in each of the following areas:
• Rationalisation of Government entities. There are opportunities to reduce the number of entities. Establishing one utilities regulatory authority covering water, electricity and information and communications is one example.
• Simplification of Government. Costs can be reduced throughout government by simplifying processes and procedures, particularly in core government services. Government is urged to evaluate each of the core business application processes in the key agencies such as immigration, trade and business, pensions and health insurance licensing, planning and customs with the goal of transitioning these services and payments online. The work of the E-Government Steering Committee can facilitate this process.
• Shared services. The development of shared services for common back office services such as information technology, human resources, accounting and any other appropriate function. This could be also implemented for statutory authorities and government companies.
• Strategy. What does the Government want to deliver for the money that is collected and spent? Is spending achieving the results that is intended to meet the national goals and objectives?
• Affordability. Purchases and services may be regarded as “value for money” but can we afford them?
• Values and Ethics. Competency issues in the public sector need to be addressed. The performance management system needs to be used effectively.
The Council considers the transition of public sector workers into the private sector and addressing the level of unemployment among Caymanians to be of critical importance for the success of any ongoing rationalisation exercise and our islands as a whole. We must ensure that Caymanians who may lose their jobs or are unemployed with limited skills are given the support to succeed in their efforts to be hired by the private sector. The Chamber is willing to partner with relevant stakeholders such as the National Workforce Development Agency, Department of Commerce and Investment and the Ministry of Labour to assist in the transition. The Chamber is in the process of developing and submitting a proposal in partnership with the Cayman Contractors Association and the Cayman Institute of Technology to introduce a pilot programme in partnership with the Ministry of Employment shortly. It is our aim to assist Caymanians in the districts who are motivated to learn a skill that will lead them to meaningful employment.
CONSOLIDATED FINANCIAL STATEMENTS: Government has failed to produce audited consolidated financial statements since 2004 in order to confirm the position of the Government’s finances. We urge the Deputy Governor to place this matter at the top of his priorities list for his Chief Officers for the upcoming fiscal year. All responsible business owners and management accept that without audited consolidated financial statements there is always a risk of challenging the validity of financial data presented. It is difficult to make informed decisions without the ability to compare previous year’s financial results against the proposed budget. The goal should be to submit consolidated audited financial statements to the Legislative Assembly prior to next year’s budget presentation.
More than 10 years have passed since Government transitioned to accrual based accounting. Allowing this situation to continue is unacceptable. We call upon the Deputy Governor to hold all Chief Officers in Government accountable for implementing the recommendations submitted in numerous reports of various Government Departments and Ministries as submitted by the Auditor General (AG). The AG’s recommendations are intended to improve Government’s systems and performance. Failing to implement the recommendations or ignoring them without facing any consequences is unacceptable. We also urge the Minister of Finance to continue his efforts to implement a robust debt management strategy and to address some of the bullet bond loans and other debt that will be coming due over the next five years.
GOVERNMENT RESOURCES: The Council wrote to the Deputy Governor on 8th May 2015 informing him that we are anticipating an increase in the number of planning applications for all types of development over the next two years. These projects include hotel developments, public and private sector infrastructure and residential works. We expressed concern that some of the public sector departments charged with processing planning applications, work permits and custom clearances may be challenged to manage this heightened level of business activity due to some of the rationalisation activities that have been implemented. We asked him to evaluate the resources of each of these departments and to determine whether any additional public sector resources need to be put in place in anticipation of the expected increase in business activity. We do not want Government bureaucracy and red tape to slow down Cayman’s economic recovery.
One of the areas of most concern and frustration to the construction sector is the process of receiving a red card from the Building Control Unit (BCU) and the administration of the inspection process once the red card is issued. We have been informed that it can take up to 130 days to receive a red card after a project has received planning approval. Building inspectors are inconsistent in their decisions and even approved plans are often not accepted as compliant by inspectors on projects in progress. We asked that these matters be investigated immediately and to have a response on what actions would be taken to address these concerns.
ENFORCEMENT: The Council is becoming increasingly concerned about the poor level of enforcement of several laws and regulations relating to pensions, health insurance, traffic, environmental health, drug offences, marine environment, planning and illegal roadside vendors who have established a presence outside the cruise ship terminals and at many public beaches without the required licenses. We maintain that businesses and organisations that fail to abide by these laws should be prosecuted. There is no sense with passing legislation and warning about fines and penalties when there is no properly resourced enforcement systems in place or the desire to bring these individuals to justice. Chamber members who abide by laws and regulations and pay their fees faithfully on time should be supported and should not have to face unfair competition from unscrupulous businesses and organisations that attempt to violate the rules.
In conclusion, the Council is encouraged by the steps that have been taken by the Government to produce a budget and strategy statement that includes pro-business measures that will benefit the membership and all residents. Under challenging economic conditions and restrictions imposed by the United Kingdom, the Government has embraced many of the positions taken by the Council on behalf of the membership. There is certainly more work to be done and the Council will continue to advocate on your behalf and encourages each member to share your thoughts, concerns and solutions so we can continue to work together as a team to make the Cayman Islands the best place to live and to conduct business. You are urged to complete the Chamber’s annual State of Business Survey . It will take less than five minutes of your time and will help the Council to understand the outlook for your business and your level of confidence in the Cayman Islands economy.
The Chamber’s 5th Salary and Benefits Survey is also nearing completion and will serve as a valuable resource for setting salary and benefit levels for your staff in the coming year. Please confirm if you would be interested in reserving a copy by emailing Kerry Pratt at [email protected]
Thank you for continuing to support the work of the Chamber.