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(CNS Business): Updated with Chamber of commerce statement - As the country waits for what is expected to be an emergency budget, Premier McKeeva Bush called a short-notice meeting of liquor licence holders Monday to size up the reaction to a fee hike in the coming year’s spending plans. There was no mention of how much the increase would be, as Bush said that he wanted to work with businesses, but he made it clear that a hike was coming. The fee increase, he said, was to fund the proposed hospitality training school and he warned licence holders that if he didn’t make the hike, the UK government would push for greater increases than those proposed by the Cayman government.
However, UK officials have confirmed that the British government will not tell the elected Cayman government how to raise revenue and cannot impose specific measures. The UK’s only position on the budget is that it should balance and that it must approve any request for short or long term borrowing, but it is up to the local politicians to work out how they do that. Nevertheless, Bush said government costs were increasing and claimed that the UK had said to him that he had to do something about it or they would.
Currently, liquor licences range from f$1,000-$4,800 annually and music and dancing licences are another $500 per year but the fees have not been increased for several years.
During the meeting licence holders pointed out that their industry was not a level playing field because some liquor sellers could trade for longer than others and the law also limited their trading hours. If fees were to increase, holders said, government needed to liberalise the music and dance law and the Sunday trading laws to allow liquor stores, restaurants, bars and clubs to trade for longer to try and earn back any fee hike.
Others also suggested lifting the moratorium on new licenses so government could earn the money it was looking for from new traders, though there were concerns that there was not enough business to go around to fuel a surge of new liquor businesses. But owners warned the premier that, like every other business in Cayman, over the last couple of years they have been hit by the increases in other fees, such as work permits and fuel duty.
Speaking after the meeting, a number of licence holders said they could probably swallow a small increase but times were already very difficult. “If this is going to happen, everyone will want to know that it’s only a minimal increase as it is already very tough at the moment,” said a spokesperson for the Cayman Islands Brewery.
Meanwhile, Peter Dutton from Jacque Scott, a wine merchants and chain of liquor stores, said that while nobody likes price increases in this economy, the industry had welcomed the fact that the premier was considering the views of the trade. He said he believed that lifting the moratorium could generate the revenue government wanted but he acknowledged that not everyone was in favour of that.
Osbourne Bodden, who owns a local liquor store in Bodden Town, said he believed that a fair deal for an increase of up to about 25% would be Sunday trading for package licence holders. “It makes no practical sense these days when people are sitting in bars from noon that liquor stores can’t trade. Those who want to have picnics and family gatherings at home need liquor stores to buy from and the law needs to be revised.”
However, he warned that mammoth increases across the board without any changes to the law over trading hours would make it difficult for people to stay in business.
A statement from the Chamber of Commerce today said the anticipated liquor licence fee increases was another added expense to the cost of doing business in the Cayman Islands.
"While it is acknowledged that these fees have not been increased for several years, many other fees have been increased significantly over the past five years. The results of the Chamber’s recent State of Business and Small Business surveys confirm that the cost of doing business is the single greatest challenge facing Cayman business today. While we understand the importance of paying our fair share to fund essential government services and systems, it is equally important for Government to work to reduce its recurring expenditure, rationalize staffing and generally run within the confines of the incoming revenue sources.
"The Chamber requests that Government provide an update on the progress that has been made with implementing the approved recommendations from the public sector reviews and the Miller Shaw Report."
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