Montserrat 12

The proposed new draft Constitution for Montserrat is filled with anti-democratic provisions.  These include:

            (a) The Deputy Governor will be able to act in relation to the public service without being obliged to take the advice of the Public Service Commission.  Except in the case of the most senior ranks, this is clearly undesirable;

            (b) The Attorney-General, the Financial Secretary and the Deputy-Governor are not elected.  As in other Overseas Territories with modern colonial Constitutions, they should have no vote in either the Cabinet or the Legislative Assembly;

            (c) The need for a Director of Public Prosecutions has clearly been recognised by the section 45 provision enabling his appointment.  It appears from the wording of the section that the intention is to have the Attorney-General continue to act in that position for an indeterminate period into the future.  The draft should be amended to establish the office and to require the appointment to be made;

            (d) A Magistrate in Montserrat has considerable power, and can impose fines of up to $100,000.00 and prison sentences of up to 10 years.  As Montserrat does not have a High Court judge, the Magistrate plays an enhanced role.  He or she routinely hears cases that would normally be tried by a judge and jury.  The section 84 appointment of the island’s Magistrate is by the Governor after consultation with the Chief Justice.  This is unacceptable in a modern democracy.  It does not insulate the Magistrate from the Executive as should be the case.  For a Magistrate to do a proper job in Montserrat he or she needs to be shielded from influence and pressure from both the Ministers and the Governor.  Additionally, there is a well-known current regional initiative to integrate the Magistracy into the judiciary.  The provision in the draft should be that the appointment and discipline of the Magistrate is by the Governor acting on the advice of the regional Judicial and Legal Services Commission, of which the Chief Justice is the head;

            (e) The thought that the Director of Public Prosecutions and the Magistrate can be removed from office by the Governor and the Secretary of State is a frightening one.  These are both judicial officers.  The rule of law demands that both their appointment and removal be out of the hands of the Executive and be either by, or on the recommendation of, the regional Judicial and Legal Services Commission;

            (f) Currently, the police police themselves.  Complaints about police misconduct made to the Commisioner of Police and the Governor are notoriously not investigated impartially.  Such complaints invariable attract hostile responses from the police.  The absence of any provision in the draft for a Police Complaints Board is regrettable.  Such a Board is a vital tool for controlling police misconduct.  Such a Board will effect greater transparency and justice for all.  There is no reason why Montserrat should have a lower standard of governance in this respect than Bermuda or Britain itself; and

            (g) The FCO proposes through this draft Constitution to retain draconian and unrestrained powers to legislate for Montserrat over the heads of the Legislative Council.  The new Constitution will preserve (i) the power to enact laws through the UK Parliament; (ii) the use of the Order in Council without prior consultation; (iii) the section 73 power of the Governor to refuse his assent to a Bill that has passed through the Legislative Council without any limitation; and (iv) the section 75 power of disallowance, though this section does require the Secretary of State to refer the offending law back to the Legislature.

            These provisions do not increase democracy in Montserrat.  They reduce what little amounts of justice and democracy Montserratians presently enjoy under threat of renewed volcanic activity.  As such, they amount to a step backwards in constitutional advance, and are a shame on the constitutional advisers who dreamed them up.

Montserrat 8

There are other objectionable provisions in the draft Constitution that are familiar to us in Anguilla.  The section 51 restriction on Montserratians who have travelled, and been so lucky and enterprising as to have acquired a second passport, from being able to be nominated and elected to the Legislature is most objectionable.  It repeats the provision in the old Constitution.  One would have thought that preparing a brand new Constitution would have been the opportunity to remove such an anachronism.  It should form no part of a modern Overseas Territory Constitution.

Section 81 and the following sections set up a Public Service Commission, but it is a powerless institution.  It has the right to consult only on public service appointments and on matters of discipline.

No FCO-appointed Governor or his deputy should have total power over the appointment and discipline of public servants in a British Overseas Territory.  He should be obliged to follow the advice of a PSC, except, perhaps, for the highest ranks, where consultation with the Chief Minister might be appropriate.  Similarly for teachers and the police force. 

I note that section 84 expresses a hope that one day a Public Service Act might one day be passed that will oblige the Governor to act on the advice of the PSC.  Such a hope is not good enough.  The Constitution should require it to be done.

Montserrat 5

The FCO legal advisers propose to take away the right of public servants to express a political opinion.  This fundamental right is found in section 12 of the draft Constitution.  It is the provision for the protection of freedom of expression:  In colonial constitutions the fundamental right was traditionally constrained in relation to public servants.  The thinking was that if you are working for Government, you should not be permitted to come out and express views opposed to the Government of the day.

The way that the right has traditionally been curtailed is by placing in General Orders, the contractual document binding all public servants, a term prohibiting the public or private expression of any political opinion by any public servant.  This was so draconian and absolute a restriction of a fundamental right that it has long been the subject of interpretation by the courts. 

Restrictions on permanent secretaries and other confidential advisers of government ministers of their public expression of political views may be justifiable.  Ministers need to be confident that their highest advisers will not appear suddenly on a political platform betraying the confidences previously shared.  The same does not apply to the lower ranks of the public service.  It is generally understood in the West Indies today that a blanket ban on public expression of political views by the general mass of public servants is highly objectionable.

The earlier provision in the Constitution of Montserrat was that the prohibition on expressing a political opinion must be “reasonably justifiable in a democratic society”.  Such a wording has been held by the courts of the West Indies to make it illegal to restrict the lower ranks of the public service from expressing their political opinions. 

The draft Constitution proposes to remove the need for the prohibition to be reasonably justifiable in a democratic society.  It is to be replaced by a need for Government to show only that the restriction “is reasonably required for the purpose of ensuring the proper performance of their functions.”  This is clearly a lower threshold than previously.  And, the higher test has been removed without any explanation. 

The intention appears to be to water down the previously enjoyed right, with a view to making it easier to gag teachers and public servants through General Orders.  There is absolutely no justification for this proposed curtailment of this fundamental right of all Montserratians to freedom of expression.

TCI 7

We are proceeding to examine Kate Sullivan's Initial recommendations for Changes to Constitutional and Electoral Arrangements in the Turks and Caicos Islands.  We have in previous posts dealt in fourteen numbered paragraphs with some of my concerns at earlier portions of her Recommendations.  We now continue:

[15]      Recommendation 31 proposes to completely emasculate the Public Service Commission and give it a completely vacuous and useless role.  The TCI has at present one of the most advanced and democratic provisions in its Constitution for the governance of the public service.  A Commission of locals appointed by the Governor on the recommendation of various stake-holders makes the decisions about appointments and conditions of service of public servants.  The Governor is required to implement their recommendations.  That is as it should be. 

If the system in TCI is not working, of which there is no suggestion, then the members of the Commission need to be trained in their proper functioning, not have the country deprived of the institution. 

It is essential that the FCO recognise that its mandate is to develop and to improve the local institutions of self-government so as to help the people of the Overseas Territories to learn the proper rules of government and how to avoid cronyism, conflicts of interest, and nepotism. 

Putting appointments in the hands of an FCO functionary, advised behind the scenes by those cronies that he and his superiors select, is not an acceptable alternative.

To be continued …

Related Posts:

The PSC

Public Service Commission

Service Commissions

Service Commissions:  The second guarantee of transparency in the government of a British Overseas Territory (BOT) is the existence of constitutionally guaranteed, independent, Service Commissions.  In the smaller BOTs of the West Indies, all appointments to the public service, the teaching service, and the police service, are by our Constitutional provisions in the hands of one person.  That is the Governor.  He delegates this responsibility to a local Deputy Governor.  Both of them carry out their responsibilities with no accountability to anyone.  In a properly regulated, democratic BOT the Governor or Deputy Governor would be required to act on the advice of the Service Commissions.

The reason for that constitutional development is obvious.  A Governor whose powers of appointment to the public service is unrestrained will of necessity have to rely on his cronies and advisers.  He will have no personal knowledge of the individuals and characters whose public service come up before him for a ruling.  His local deputy will be related to half the local population and have grown up with most of the others.  Under such a system, no matter how well-intentioned, the public will not accept that there is transparency and fairness in public service appointments.  This is a classic case of government by man rather than by law. Such appointments and related matters should instead be constitutionally placed in the hands of a local, professional, and independent Public Service Commission, governed by appropriate laws and regulations.

It is unfortunate that the corrupt and perverse regime that has been permitted by the Foreign and Commonwealth Office (FCO) to run our sister BOT of the Turks and Caicos Islands (TCI) has given Kate Sullivan, the FCO legal adviser, the opportunity to recommend, in her recently-released draft recommendations, clawing back from that unfortunate BOT some of the elements of self-government that had only recently been granted, and repositioning them in the hands of either the Governor or the Secretary of State.  No doubt, that reactionary step is well-deserved in the TCI.  God knows they have blotted their own copy-book often and badly enough. 

We can only hope that in the more sensible, better-regulated territories of Bermuda, Cayman Islands, Virgin Islands, Anguilla and Montserrat, no such retrograde step is contemplated.  Such an undeserved development would be an outrage of unacceptable proportions.

Related Posts:

Police Reform

The PSC

Public Service Commission

Ombudsman

Complaints Commissioner:  We are now looking at how a public service demonstrates the principle of accountability.  There are a number of techniques used by different countries to ensure accountability in the public service.  The first one we shall look at is the Complaints Commissioner.  This is, of course, the famous Ombudsman, one of the few great human rights inventions of the Europeans.  Without an Ombudsman or Complaints Commissioner, John Public must rely for enforcing his rights against an unfair and biased public officer on going to Court.  And, we all know how expensive and unsatisfactory that can be. 

The Ombudsman, on the other hand, is free, is completely independent of any politician or public servant, and reports only to the Legislature.  Many of the larger islands have a Complaints Commissioner, but few if any of the smaller ones do.  If the objection to such an appointment is expense, then there is no reason why the function of the Ombudsman should not be combined with other functions, such as a Human Rights Commissioner or a Police Complaints Authority. 

Related Posts:

Human Rights

Complaints

Patriotism  

Accountability

Accountability.  We are looking at the problem of the lack of accountability and transparency in the government of Anguilla.  We have been doing so under the three general headings of (1) Integrity; (2) Accountability; and (3) Transparency.  We have dealt in some detail in the past several posts with the issues that arise in looking for the first element, integrity.  Next we look at the second general area, the vexed question of the lack of accountability in our public administration in Anguilla.

The insecure and the deceitful among our public servants are equally afraid of accountability.  To be accountable means that we must one day explain to someone what we did and why we did it.  A weak or corrupt public servant cannot perform that duty comfortably.  Secrecy is his preferred environment.

By contrast, the self-confident and the honest among us welcome accountability.  For one thing, mechanisms and techniques for guaranteeing accountability give us the tools to demonstrate our honesty, effectiveness and integrity.  Systems for demonstrating accountability permit us to show our honesty and efficiency, compared to the run-of-the-mill.

Some of the most effective measures that can exist in this area include: (a) the Complaints Commissioner; and (b) a functioning Public Accounts Committee.

Related posts:

Secrecy

Promises  

Codes of Ethics

Codes of Ethics:  The fifth and final instrument that we would look for, to determine whether a British Overseas Territory respected the notion of integrity in the public service, is a Code of Ethics for Ministers. 

I have no doubt that no one in public life in Anguilla sets out to be corrupt.  We get that way in the end, usually because of the pressures and strains put on us, and the lack of any coaching or training in performing our duties according to recognised codes of ethics. 

When, at the request of one of our constituents, we telephone the Sergeant at the Police Station to give a chance to a young person who has been arrested, no doubt we think we are responding to the needs of our community.  When we give work permits to one contractor, but not to another, we say we are “leveling the playing field”.  When we overrule a Chief Immigration Officer or a Planning Committee order, we say we are “showing a good heart” and softening the harsh decisions of unfeeling bureaucrats.  But, it is quite the opposite.  We are showing partiality and preference for one person above another, and corrupting the system set up by law.

Our problem is that we have never seriously studied what is the meaning of nepotism, croneyism, and conflicts of interest.  We need to debate, discuss, and adopt Codes of Ethics at all levels of government.  The Judges and Lawyers have codes of ethics.  Why not public servants and politicians?

In a democratic, transparent, and accountable system of government, it is for politicians to lay down the national policy.  Then, the politicians must learn to leave it up to an independent, professional public service to carry out their policy. 

It is the duty of the public officer to apply government's policies fairly and impartially.  In appropriate cases there will be the power of appeal to an independent tribunal, but never to a politician.  There is no integrity in a system that permits a personal appeal to a Minister to overrule the decision of a Board or public officers which is carrying out the national policy.  To have it otherwise means that the law and policies of our countries are not applied evenly and fairly to all citizens.  If a politician intervenes to overrule the action taken by a public officer, such intervention is almost invariably a corruption of the system.  The result is a loss of public faith in our public institutions, and a breakdown of law and order.  Victimisation and discrimination is the inevitable result of ministerial intervention on behalf of one individual.  And, indeed, that is the system of government that most of us labour under.

I do not accept that our islands are too small for us to expect the standards that exist in the outside world to survive and work here.  No matter how small we are, we are entitled to expect that our governments will be of laws and not of men.

Related Posts:

Ethics and Integrity

Tenders Board

Tenders Boards and Procurement: We continue to examine the question of what tests there are for us to conclude that there is accountability and transparency in any particular government.  The second institution that we would look for is a properly functioning Tenders Board and a well regulated procurement procedure. That means it must be governed by a law and supported by legal sanctions.

A significant portion of Anguilla's national budget is spent on developing infrastructure, repairs and maintenance.  Procurement of goods and services, relating to contracts for roads and schools and offices and hospitals, offers the most attractive opportunities for those who wish to corrupt the process and illegally enrich themselves.  Corruption damages not only governments, but also companies and individuals.  It is in the interests of our countries and our people to do what is necessary to minimize the opportunities.

In Anguilla we have been very astute to do nothing that will discourage corruption in the procurement process. Our procurement systems in Anguilla are essentially lawless and unregulated.  Our presently unregulated system is an invitation to sharp practices. 

Transparency and accountability are the main antidotes for this type of corruption. We need to insist on recognised standards and procedures in relation to procurement and tendering. Tenders Boards ought to have the independence and security of tenure of their members protected by the Constitution. We need appropriate laws and regulations to set out how public contracts are to be awarded. The Integrity Pacts recommended by Transparency International will carry the process forward and upwards to an entirely new level. 

Related Posts:

Public Works

Construction

Integrity Pacts

Interests

The Interests Commissioner:  Following on from the previous post, the first institution we would look for in a country’s system of government, to give us some indication that integrity in public service is taken seriously, is a functioning and strictly enforced Integrity Act.  This is the law that in well-regulated countries requires public officers, that is, civil servants, politicians and directors of statutory boards, to publicly declare their assets and liabilities.  In Anguilla, as in most of the British Overseas Territories, there is no such law. 

We need to have laws and regulations, backed with sharp teeth, put in place.  In the absence of such a law, members of the public are entitled to suspect that politicians and civil servants retire much richer than when they went into the service.  And, we are entitled to believe that they have come by those riches in an unethical and criminal way.

Related Posts:

Integrity Law

Members' Interests

Parliamentariansl

Good Governance   

Ministers

What is the function of a Minister in the Government of Anguilla?  The proper answer, I suppose, is that it is exactly the same as the function of a Minister in any other West Indian country.

And, what is that? you ask.  The answer is that the main function of a Minister is to oversee the operations of his Ministry, and to ensure that his public service officers carry out the policy decisions of the Executive Council/Cabinet.  The persons charged with making the government work are the public servants.  They carry out the day to day activities of the Ministry under the direction of the Permanent Secretary.  Subsidiary to this role is the important function of giving advice to the Minister on technical aspects of the work of the Ministry.  This permits the Minister to take the advice to Cabinet and get a sensible policy decision made.

What should clearly not be within the remit of a Minister is for him to go out on the road and personally direct operations related to his Ministry.  He should not hire people to carry out work.  He should not order materials and services to be paid for by his Ministry.  He is the policy maker, not the technician.  He is the director of the play, not the actor on the stage. 

And, how does a Minister learn his role? you ask.  The answer is that in bigger countries, such as the United Kingdom, there is a National School of Government.  They hold workshops and conferences for new Ministers.  They go through the Ministers’ Code of Ethics, pointing out each of the duties and responsibilities of Ministers of Government.   They train a politician how to be a responsible Minister.  They teach how corruption comes in many forms.  

It can take the shape of cronyism, when friends are appointed to Boards and given contracts.  That is a form of corruption.

Ministers need to be taught how to look out for conflicts of interest, and how to deal with them.  This is not something that comes naturally to many of us.

The British have long had an independent Appointments’ Board answerable only to Parliament.  When a Minister wants to appoint a new person to a Board, the proposed appointee must be vetted to ensure that person is properly qualified  and able to contribute to the work of the Board.  No one is given an appointment solely as a juicy plumb for political support.

They do not let a Minister go about ordering replacement parts for fire engines. 

They do not tolerate a Minister going down onto a project and participating in an industrial dispute.

They would not contemplate a Cabinet meeting discussing the overturning of a Public Service Board’s decision in carrying out its duties.

But, those things happen every day in Anguilla.  They always have.  We consider it normal.

Isn't it about time the Governor directed the Public Administration Department to come up with a course specifically for new Ministers designed to explain and teach best practices for Ministers?

Related Posts:

22 July 2008

Apology

Apology

I have now discovered the quarrel that Stanley has with my last post.  It seems that I have several factual errors in it.  I also drew some unfair inferences in relation to him and the public service.

It appears that the Immigration Officer who, I wrote, had had his case quietly dropped has in fact been committed to trial in the next sitting of the Assizes.  The case has not been “swept under the carpet”.

The old lady whose case, I wrote, had been nolle prossed, had in fact been tried by the Magistrate who had dismissed the charges when the old lady was unable to identify her assailant.

And, the suggestion that Stanley had been quietly made PS Administration in order to get him out of the Magistracy was quite misconceived.  Stanley had in fact continued to serve as acting Magistrate from time to time for some nine years while serving in the Attorney-General’s Chambers until he was appointed PS Administration. 

For these and any other factual errors in my post I apologise unreservedly to Stanley.  I had received and relied on incorrect information about these incidents.  I therefore had no valid reason to have drawn the inferences I did, that Stanley owed a favour to Keithly. 

Stanley has also pointed out, and I accept, that in the circumstances, it was quite unjustified for me to have said that the one sure way to get a promotion in the Anguilla Public Service is to be caught engaged in serious criminal activity.

Crisis

Government is to be commended on sharing this information with us. Our previous experience of government's handling of our money was that they would tell us, “It is none of your business”. Hopefully, they will keep it up.

It paints a stark picture.

“STATEMENT ON FISCAL POSITION

March 12, 2010

As a follow up to the presentation made by the Ministers of Government on the 11 March, 2010 please find following a release of the Fiscal Position as at December 31, 2009 and current.

Recurrent Revenue

At December 31, 2009 recurrent revenue collections totaled EC$145.65 million.  This represents a 30% decline from 2008 recurrent revenue collections of EC$203.74 million.  To put the situation truly into context, 2009 recurrent revenue collections were not only lower than 2008 but lower than 2007 and 2006 collections as well.  Consequently it is no exaggeration to say that recurrent revenue situation in Anguilla has been set back 5 years.  Key revenue heads such as Customs Duty Other, Stamp Duty and Accommodations Tax were down by 33%, 54% and 25%, respectively from 2008 collections.  It should be noted that revenue collections of EC$246.92 million was budgeted for 2009.

Recurrent Expenditure

Recurrent Expenditure for the year ending December 31, 2009, on the other hand, was EC$204.17 million, marginally lower than recurrent expenditure of EC$206.87 million in 2008.  A retrenchment in public sector salaries and wages and a partial freeze on hiring were key to cutting expenditure from the budgeted amount of EC$241.81 million for 2009. 

It should be noted that there were some EC$14.25 million in unpaid invoices as at the end of December 31, 2009 which will be accounted for in 2010 as they are paid.  These include:

1. 
   
   Anguilla Social Security Board: EC$6.88 million (Benefit Contributions)
2. 
   
   Civil Service pension Board: EC$1.57 million (Pension Contributions)
3. 
   
   ANGLEC: EC$1.32 million

Recurrent Balance

The recurrent balance, which is the difference between recurrent revenue and recurrent expenditure, for 2009 was a deficit of approximately EC$58.52 million.  This translates to an average monthly recurrent deficit of just under EC$5 million.  This is clearly unsustainable.

Capital Expenditure

In terms of capital expenditure this was approximately EC$10.58 million, a fraction of the EC$98.12 million budgeted for 2009.  The Capital Budget bore the brunt of the austerity measures imposed by Government.

Overall Balance

Given the situation with respect to the recurrent and capital accounts Government’s overall balance for 2009 was a deficit of EC$69.10 million.  This deficit was partially financed by the drawing down of Government’s fiscal reserves in the amount of EC$39 million.  The remaining deficit was financed by borrowing from the local and regional banking system. 

As a result of the deficit on Government accounts Central Government Debt increased to approximately EC$172.1 million in 2009, up from EC$149.65 million at the end of 2008. The government has found itself in a position where it has been borrowing money each month since October 2009 to fund Civil Servants salaries and other obligations. This practice is unsustainable and cannot be continued indefinitely. This will even prove to be more difficult because of the financial crunch where Banks and other lending institutions are finding it difficult to lend to government because of liquidity issues and the borrowing guidelines that the British Government has agreed with the Government of Anguilla.

The current Fiscal Position as at March 11, 2010 is as follows:

• 
  
  Overdraft position: deficit of EC$13.7 million
• 
  
  Payables: Unpaid bills: EC$16.3million

The financial position will temporarily improve with a grant of approximately EC$16 million expected from European Development Fund (EDF 9 4^th Tranche). These funds will be used to repay a short-term loan of $12m from Eastern Caribbean Central Bank which is due and payable by April 1, 2010.

The Caribbean Technical Assistance Centre (CARTAC) has been providing ongoing support to the Government of Anguilla in a number of consultative and training initiatives. As part of this support the government is benefiting significantly from the expertise of Economic Consultant Dr. Eliahu S. Kreis who has been in Anguilla from 28 February, and leaves on 18 March 2010. He has been working with technical staff in the Ministry of Finance assisting with GDP and Fiscal projections for the period 2010 to 2014.

As a result based on the data compiled it is projected that revenue for 2010 will be approximately $148M while expenditure is expected to be around $237M. This will result in a recurrent deficit of over $89m. Therefore, the Government of Anguilla will have to limit its Capital Expenditure significantly which is normally funded by a recurrent surplus.

With this revelation the Government of Anguilla will have to find ways and means to narrow the gap between expenditure and revenue as the Ministry of Finance puts together the budget for 2010. The Government of Anguilla has been operating on a Provisional Budget in the absence of an Approved Budget for 2010. This arrangement cannot continue beyond 31 April 2010. However, the Ministry is confident that a budget will be finalized before the deadline. The gloomy position that government has find itself in means that serious measures will have to be implemented in order to stabilize the deteriorating financial position of the government.

Both Permanent Secretaries in the Ministry of Finance have been mandated along with other technical staff to put together a recovery plan that will assist the Government of Anguilla in closing the Gap identified. This will be completed in a short period of time in order to be reflected in the 2010 budget. When the recovery plan is completed the General Public will have an opportunity to review it.

One of the main revenue generators Customs Duty has experienced a leakage of over $ 113 million for the period 2005 – 2009. Government has therefore committed to the implementation of a new policy to address this practice.

Every effort will be made to cut out all wastage. In addition, the following areas have been identified and are being considered for review.

• 
  
  Rental agreements for office accommodation
• 
  
  Allowances
• 
  
  Freeze on hiring of new Staff
• 
  
  Redeployment of staff as oppose to hiring of new staff
• 
  
  Reduction in Electricity usage
• 
  
  Limiting the use of Governments vehicles after working hours
• 
  
  Training
• 
  
  Duty free concessions
• 
  
  Overseas travel not funded
• 
  
  Restructuring of Boards and Committees
• 
  
  Contributions
• 
  
  Roadside cleaning
• 
  
  Temporary staff
• 
  
  Contracts
• 
  
  Restructuring Debt

At this time an immediate cost saving initiative has been implemented with the retrenchment of Special Assistants, Advisers and Consultants that will result in savings of over $2m dollars. However, in the future consideration will only be given if absolutely necessary to persons with the technical expertise to contribute to the development of Anguilla in a meaningful way.

The new administration has committed to a consultative and an open approach in a spirit of cooperation with ministries and the general public. As a result the Ministry of Finance, welcomes any suggestions and ideas that the General Public can contribute that can positively impact the development of Anguilla.”

Borrowing $89 million to bridge the gap is clearly out of the question. No one would be so stupid to lend us that kind of money. Raising $89 million in additional revenue is impossible. We can't grow our economy before the end of the year, with the best intentions in the world. With the inevitable litigation that will follow, it could be two years before any compulsory acquisition of Flag could result in new funds flowing. Saving a few dollars by cutting Boards and rent is essential, but is not going to carry us far.

It seems to me to be inevitable. There will have to be major cuts in the establishment, and all public servants will have to accept major salary reductions.

Taxing

The big question is, will Alan Roe’s visit to Anguilla result in increased taxation?  The short answer is that, if it does, it will have to be imposed by us, implemented by us, and paid by us.  Of course, he might well make recommendations for removing some taxes, as well as bringing in others.  Hopefully, we will get to see his report at some early point, ie, if the Government of Anguilla puts it on its website, like the Turks & Caicos government already did.  I believe that Governor Harrison has the right ideas about transparency.  Hopefully, it will be up to him whether the GoA goes public with the draft report.

Even then, Mr Roe’s output will only be a set of recommendations.  They will not be binding.  It will be for the politicians and their technical staff to decide whether his report should be implemented. 

Whatever changes he recommends, would it not be better to collect what is out there first?  We know that many residents, local as well as non-local, have been evading existing taxes for years.  Over the past 25 years, the preferred way of doing business in Anguilla has been to encourage the employment of local fronters to negotiate exemptions from taxes on the basis that they were “local” businesses.  Every sort of enterprise in Anguilla was available, if the price was right and so long as the privileged few got their share of commissions and the famous “ten percent”.  Social Security contributions, accommodation tax, property tax, customs duties, planning prohibitions, hospital bills, electricity bills, and water bills, were all ignored with impunity on the basis that the Anguilla Government would not “criminalise” the ordinary Anguillian.  Who knows, but there may be tens, perhaps hundreds, of millions of dollars in uncollected revenue out there waiting for an efficient collector to come along.

Whatever new taxes are proposed, they better be cost-efficient.  No point in proposing to raise $100 if it costs $200.00, or even $50.00, to collect.  Income tax and company tax would be subject to the problems of all small-island economies.  The tax inspector and tax collector would be a family member or friend of the tax payer.  With no audits required in this economy, everyone will lie.  Those who can shift their income overseas will do it.  Less cash will circulate, and the economy will shrink. 

What about rationalising revenue heads?  Out of the 150 existing ones, only about 5 of them bring in 90% of all GoA revenue.

Will imposing a Value Added Tax really encourage Anguillians, as has been suggested, to go to St Maarten and buy there in order to bring in the stuff duty-free?  Given that merchants will have lower landing costs (if Customs Duty is removed at the time VAT is introduced), there should not be such a major increase in the sale price of goods as to make overseas purchasing worthwhile for the average household.  Of course, we cannot see the guys selling BBQ food in The Valley charging 17.5% tax, nor the fishermen. 

If our revenue depended on taxing businesses like those we would be in really serious trouble.