Essential

New legislation banning smoking in public places came into effect today.

One of the key elements of the Cayman Islands’ Tobacco Law 2008 is that smoking restrictions will apply in certain public places from December 31 2009.

Buildings covered by the law include enclosed restaurants and bars, public transportation terminals, public toilets, shopping malls and shops.

The legislation permits designated smoking areas in open areas of bars and restaurants. These must be clearly signed and 10 feet from non-smoking areas.

His Excellency the Governor, Mr. Stuart Jack, CVO, and his wife, Mrs. Mariko Jack, have announced that they will depart the Cayman Islands on Wednesday, 2 December.

Deputy Governor, the Hon. Donovan Ebanks, MBE, will act as governor until Mr. Duncan Taylor, CBE, takes over the position in January 2010.

Until recently, Mr. Taylor was the British High Commissioner for Barbados and the Eastern Caribbean, a position he held from 2005. The posting covered Antigua and Barbuda; the Commonwealth of Dominica; Grenada; St. Kitts and Nevis; St. Lucia; and St. Vincent and the Grenadines.

A career diplomat, Mr. Taylor was born 17 October 1958. He has served in the UK’s Foreign Service for 27 years.

The Cayman Islands Department of Tourism is improving its customer service to cruise passengers at the Royal Watler Cruise Terminal with the opening of the new Visitor Information Centre.

The office, which primarily acts as a hub for incoming passengers interested in tours, attractions and facilities on-island, boasts a striking mural of Caymanian photos representing the culture and beauty of the island.

Since the Royal Watler Cruise Terminal received its first cruise ship in October 2006, the Department of Tourism has been stationed in an old Caymanian-style temporary office in the open area. This new space offers a professional environment that not only allows guests to cool down from the heat, but moreover provides guests with a visual depiction of Cayman’s unique and diverse offerings with the anticipation that it will entice guests to experience something new.

‘The new space we have at the Royal Watler Cruise Terminal will positively impact the visitors’ experience with DOT staff when requesting information and brochures on the islands’ attractions, watersports, restaurants and everything else the Cayman Islands has to offer,’ said Racquel Brown, Manager – Tourism Development Services for the Department of Tourism.

In addition to supplying information and materials for incoming visitors, the office supports the Cruise Conversion Programme, ‘Welcome Back’, which encourages cruise passengers to return as stay-over guests. ‘Welcome Back’ will be relaunched November 2009. For the first time, the Department of Tourism has a physical and convenient location for guests to register for the programme and for staff to be able to deliver personalized service and enhance awareness about ‘Welcome Back’ to cruise passengers.

Government has declared November 6 a public holiday to mark the introduction of Cayman’s new constitution.

The day will be a public holiday in 2009 only.

Banks, many shops, and government offices will be closed for the day.

The UK has given the Cayman Islands permission to borrow $279 million to help deal with its financial crisis.

Leader of Government Business McKeeva Bush broke the news at a United Democratic Party meeting last night. He was speaking after a week of talks with the UK Foreign and Commonwealth Office.

The UK has given immediate approval to $50 million of borrowing. The remainder is conditional on the Cayman Islands making cuts in financial expenditure over the next two financial years. An independent study of the impact of direct taxes on the islands’ economy will also be carried out.

Mr Bush outlined significant cuts in government expenditure including new staff hire, purchases of furniture and equipment, and non-essential travel. He stated there were no immediate plans to introduce income or property taxes. Additional revenues will be raised by increasing customs duties by two percent, passport fees, tobacco duties, and introduction of new duties on luxury and other goods.

The legalisation of gambling was also mentioned as a potential source of new revenue. Mr Bush stated that if this was considered necessary, the matter would be decided in a referendum.

Government officials confirmed today they are considering a temporary pay cut for civil servants to help balance the budget.

Under the proposal there would be a 2 percent reduction in salaries for civil servants earning more than $3,000 per month. In return civil servants would receive four days of unpaid leave each month.

Chief Secretary Donovan Ebanks said the measure could come into effect in October 2009 and run until June 2010.

Civil servants earning less than $3,000 per month and teachers employed on a daily basis by the Education Department.

The 2009 Miss Cayman Pageant has been cancelled as a direct result of the economic crisis facing the Cayman Islands.

Government has decided is unable to afford the $100,000 cost of staging the competition.

As a result there will be no entry from the Cayman Islands in the 2009 Miss World pageant and the 2010 Miss Universe pageant.

Leader of Government Business McKeeva Bush stated in a press conference yesterday that income tax and property tax are not options to resolve Cayman’s financial crisis.

He stated ‘Property tax and income tax. To go this route would change the uniqueness of these islands’ economic base.’

To cover the deficit government are seeking private partners to upgrade Owen Roberts International Airport, develop a new sewage system, build a cruise ship facility, and improve roads.

On September 1 government’s operating bank account was overdrawn by CI$4.3 million, with a limit of CI$15 million. Cash outflows during September are likely to be around CI$79 million with revenues of only CI$30 million.

To meet its obligations government needs to borrow around CI$ 40 million. In order to do this it needs the approval of the United Kingdom Foreign & Commonwealth Office.

On Monday 7 September government is due to present plans to the UK outlining proposals to cut spending and increase revenues. They hope to then receive approval to borrow the money they need to pay government salaries and other expenditure.

Last month government was unable to pay employee healthcare and pension costs.

Leader of Government Business McKeeva Bush held an emergency meeting at the Ritz Carlton hotel yesterday to outline the financial difficulties government is currently facing. Over 400 people attended.

He revealed that:

• For the year-ended June 30 2009 the public sector had an operating deficit of CI$81.1 million.
• On August 25 2009 government held net cash reserves CI$65.6 million, of which CI$76.1 was in restricted cash reserves.
• In order to pay the wages of civil servants on payday on August 25 2009 government postponed payments to contractors, and postponed the payment of employee healthcare and pension costs.
• Government is forecasting a cash shortage at the end of September of CI$44.1 million.
• Since government incurred an operating deficit for the 2008/09 financial year, it needs the permission of the UK Foreign & Commonwealth Office (UK FCO) to borrow additional funds.
• Government has agreed with local banks to borrow CI$372 million to finance its commitments until June 30 2010. To proceed, permission must be granted by the UK FCO.
• On August 28 2009 government wrote to the UK FCO requesting permission to borrow CI$272 million.
• On August 30 2009 the FCO advised government they were unlikely to allow the additional borrowing.
• On August 25 2009 he spoke with the FCO seeking urgent permission to borrow CI$30 million to meet current obligations.
• He had received a letter that day from Chris Bryant of the FCO stating that government needed to present a realistic plan to turn around public finances before they could consider a request for additional borrowing. In the letter Bryant stated ‘To give me the confidence that you will be able to service any new borrowing you will have to widen the tax base. I fear you will have no choice but to consider new taxes – perhaps payroll and property taxes such as those in BVI.’

Bush then went on to suggest a number of measures that could increase revenues. These included:

• Widening the channel in the North Sound to attract mega yachts and their rich owners.
• Building cruise ship berthing facilities.
• Building a sewage system.
• Making additional efforts to attract five star resorts to the Cayman Islands.

He also stated aggressive cost cutting measures were required.

The OECD has placed the Cayman Islands on their ‘white list’ of countries that have substantially implemented international standards on tax disclosure.

On Thursday Leader of Government Business McKeeva Bush was in Washington DC to sign Cayman’s 12th Tax Information Exchange Agreement (TIEA) with New Zealand.

In April, following a meeting of the G20 in London, the Cayman Islands was placed on an OECD ‘grey list’ of countries that had not met the required standards on tax disclosure. The ‘grey list’ comprised countries that had not signed TIEAs with at least 12 other countries.

Cayman is in discussions to sign further agreements with a number of other countries such as Australia, Germany, France, and Germany.