I occasionally tune in to Klass FM for entertainment when I am driving my car from North Hill into town. I don’t get to hear much during the short drive. But it seems these days I mostly hear some agitator or the other spouting propaganda and drumming up anti-government sentiment, usually over the impending arrival of GST.
These radio commentators assure us that Hurricane GST will hit Anguilla on 1 July because Premier Dr Lorenzo Webster betrayed Anguillians and agreed to implement GST when during the election campaign he promised if elected to do away with the AUF’s proposed GST.
It was not high sea-surface temperature that caused Hurricane GST to develop. It was the AUF administration’s signature back in 2018 to the agreement to impose GST that set off the disaster. The present APM administration, appointed on 30 June 2020, is taking the blame for it. Do they deserve the abuse they are getting on social media and the talk show programmes?
I had a word with Mr Ivan Connor, the government’s press officer. He explained to me that it was pure propaganda.
According to the draft AUF White Paper of May 2020, GST was going to be the best thing that ever happened to Anguilla. It would help to restore growth and achieve fiscal sustainability and poverty alleviation. It would enable our economy to respond to and recover from the global and economic recession, the pandemic, and natural disasters. The AUF administration committed Anguilla to the full implementation of GST effective 1 January 2023. (The White Paper was later revised by the APM administration and the FCDO and published in March 2021.)
The propaganda was that GST would not be an additional tax. It would replace the tourist-paid Accommodation Tax, the miniscule Environmental Levy, and the almost non-existent Communication Levy. The claim was that this would allow GST to be introduced at a relatively low rate.
The more outrageous claim was that GST would facilitate investment, provide incentives to exporters, and make Anguilla internationally competitive. What spin-doctor dreamed this stuff up? Mind you, a lot of this puffery is repeated in the subsequent APM revised White Paper. Meanwhile, we know that the sole purpose of GST is to allow the Anguilla administration to get money to continue pampering the Anguillian unemployed and unemployable.
The AUF administration’s concession to the British Government in introducing GST arose from the devastation caused by Hurricane Irma in September 2017. The AUF administration was in a dilemma. It was faced with a choice. Either enforce existing tax legislation (for example, the Chief Auditor’s Report consistently over the years shows that only 40% of Anguillians pay their property tax), or introduce a new tax, preferably GST. The AUF administration chose the second option. In agreeing to the Medium Term Economic and Fiscal Plan (MTEFP) in June 2018, the AUF promised the FCDO they would introduce GST in Anguilla. They preferred to impose a new tax. If we collected the outstanding unpaid taxes, we would probably have enough money to run the government for five years without GST. We won’t enforce this one either. Remember the rule: we cannot turn “innocent” Anguillians into convicted criminals. To this day, we still have not prosecuted, so far as I know, a single Property Tax evader.
Let us not forget how GST came upon us. To recap, after Hurricane Irma in September 2017, we fell back on British taxpayers’ generosity to meet the over-indulgencies of our excessively expensive public service (I estimate we currently employ two to do the job of one). When the hurricane passed, the British made a gift to the AUF administration of £60 million (EC$240 million at a four to one exchange rate) for rebuilding.
We had no reserves to pay for our structural repairs ourselves. This grant was earmarked for capital infrastructure. In return, the AUF administration promised that we would cease to rely on the British taxpayer. In future we would raise our own revenue to pay our own costs. We promised we would enact the GST Act. As the months and years of the AUF administration passed, we did not do so.
In the middle of the 2020 pandemic, and the close down of Anguilla’s economy, the AUF administration begged for and got a further EC$100 million in grant in aid. This was intended specifically to pay civil servants for the following ten months. It was also, we realised, intended to throw money around to help win the coming general elections. In exchange, the AUF administration promised again on 11 June 2020 that it would either enact the GST or cut the cost of the public service. We took the money. We did not cut the cost of the public service. The AUF’s tactic did not work. It lost the elections. But not before it had negotiated yet another EC$100 million gift from the British taxpayers to pay civil servants. This windfall was due to be paid within days after the general elections.
The day after coming to office on 30 June 2020, Dr Webster was faced with a dilemma. There were no funds in the Treasury. He must either default in paying civil servants’ salaries for June or accept the AUF-negotiated EC$100 million from the FCDO. He chose to pay the civil servants. You may think, as I do, that he missed the golden opportunity to send all of them home while he worked out how to permanently let half of them go as being an unproductive and unnecessary burden on Anguilla’s taxpayers.
Let us be clear. We got the second EC$100 million by repeating the promise of the previous administration, that we would introduce GST. Since we would not reduce our expenses of government, we would increase taxes to pay for it. That was the promise. On 29 July 2021, our House of Assembly passed the GST Act into force.
The new APM Administration was immediately in political trouble. They promised the people during the 2021 election campaign that they would not agree to accept the British EC$100 million gift if it meant passing the GST Act. But, once in office, they faltered. They reconsidered. They took the seemingly easy option of taking the money and agreeing in exchange to pass the GST Act into law.
The CDB had also agreed with the previous administration to make a $30 million loan conditional on passage of the GST Act. The new administration needed this additional money to pay more salaries. It could not turn it down. On taking the loan, it was now obligated also to the CDB to pass the GST Act into law.
The FCDO did not force us to pass the GST Act. We took their money, and the money of the CDB, on a solemn undertaking to start paying for our expensive government ourselves by imposing GST. If we do not live up to our promises made in exchange for hard cash, then would we be anything but a bandit state?
We have no one to blame for our dire circumstances but ourselves. The British don’t owe us anything. We don’t pay a penny in British taxes. Blaming the “British” for our present problems is pure xenophobia if not an appeal to racism. Let us face it. We Anguillians always delight in blaming others for our misfortunes. We are never to blame. It has always been so.
What really gets to me is the pure hypocrisy of the government critics who blame Dr Webster’s administration for agreeing to the GST Act after he came to office. Are they willing to step forward and say that he should have chosen the alternative? Would they have supported him sending the civil servants home without pay in June 2020? Of course not. What he did instead was masterful. He negotiated down the most onerous terms and conditions of the GST as agreed by the AUF administration. He got them to agree to making the GST terms as light as he possibly could.
I hope to look at these in a later article. I also hope to expose the mistaken, if not malicious, motives of some of his most vociferous critics.
