Welcome to the second, less frequently-posted decade of RevMod.

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Wednesday, March 12, 2003

Destination: Cayman

Those who know me know I've been trying for some time to find work in the Cayman Islands. Not because I'm particularly attracted to the "tax-free paradise" thing --- I'm a New Democrat, after all --- but to be with someone I love, who moved there from Edmonton some time ago. (Oh, my goodness... that was nearly autobiographical! What kind of blog is this becoming?)

As a result of this desire, I've been following Cayman Islands politics for some time, trying to form some opinions that are more than simply foreign critiques of tax havens. I'm haven't formed those opinions yet, but I'm learning. This, however, is simply a stupid idea in any nation around the world.

The CI government wants to have space built for government offices, but would rather have them built and maintained to spec by a private owner than build them themselves. Under the PFI [Private Financing Initiative] method a building is financed, designed, built and maintained for a client. "It's a priority for the government to fulfil the project without increasing public debt or government's debt servicing ratio -- PFI allows for that," continued [Minister for Planning, Communications, Works and Information Technology Linford] Pierson. (Yes, that's some kind of Ministry name. Wouldn't "Public Works" have done? I suppose not, since he's busily privatising here.)

This is simple. You finance some government debt now, or you indebt future governments with an inescapable lease that will still be costing taxpayer money long after the space would have been paid for. And your in-house cost of staff would have been lower than it will be to pay someone else to have their staff do the exact same work... there's going to be some profit in there for the private company, and it is otherwise a zero-sum game.

Alberta tried this with road construction and maintenance. Since the privatisation of those processes, Albertans are paying more to get and keep roads, and less is getting done. But it's the same people driving the machinery, getting paid much the same or less to do it. Who benefits? Not the employees, not you and I footing the bill and hitting the potholes... just the private company owners who managed to score lucrative government contracts. The Cayman Islands government would do well to learn from this lesson.

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