Businesses in the Cayman Islands can look forward to “significant funds” from the government to alleviate the pressures confronting them as they reopen into an uncertain economic environment.
Acknowledging that many businesses are faced with serious cashflow challenges, Hon. Premier Alden McLaughlin said on Tuesday that the government has been looking into further ways of supporting them through this period.
No firm details were provided although the Premier hinted at "significant" financial support in the making while the package is being put together.
In the interim he said, instructions have been given to the various government departments to speed up the paying of invoices to ease the cash flow challenges that has several businesses squeezed at present.
“The government is continuing to work diligently to find means of improving the lives of the people who live here and trying to give as many businesses as we can a fighting chance to survive until the tourism industry returns,” Mr McLaughlin said.
Several businesses are known to be facing the real prospect of collapse as the outlook for the tourist industry in particular remains bleak at best.
Earlier in the COVID-19 crisis the small and medium sized enterprises in the tourism sector were the beneficiaries of a government relief and stimulus package.
REFUNDS AND REPRIEVES
“One of the big policy points that we have is to try and leave as much as we can in people’s pockets and in business bank accounts,” he said.
Stating that “cash flow is a huge issue for many businesses”, Premier McLaughlin announced that the instruction has gone out to “every government entity to process all invoices and refunds from business with absolute haste.”
“If the government owes businesses and individuals money, refund as quickly as we possibly can.”
Much of this relates to refunding work permit fees.
He said that the Workforce Opportunities and Residency Cayman (WORC) which falls within his portfolio, has been directed to process their backlog of refunds within 14 days.
That work is already ongoing with over 1183 refunds due to refused or cancelled work permits with a further 924 to be paid back.
This will put a further dent into the government coffers which it hopes will be temporary with work permit fees being a significant source of revenue.
At the same time, companies with foreign staff have been given a reprieve with the extension of the deadline for work permit renewals by a month to the end of this month.
Mr McLaughlin said the original deadline was extended following consultation with private sector stakeholders including the Chamber of Commerce.
He also announced that the validity of temporary work permits held by construction companies and by small and micro businesses, domestic helpers and caregivers has been extended for ten weeks.
This covers the time lost during the shelter-in-place order for work permits that were valid as of the March 27th.
“We hope these measures will assist businesses as we all collectively try to work through the challenges that the current pandemic has placed the country in,” the Premier stated.
SIGNIFICANT FUNDS FOR BUSINESSES
Regarding the new scheme to further assist businesses through the current economic downturn, he ventured that the government was working on a programme that “would assist many small businesses and some not so small” which are struggling with cash flow.
He said the scheme being planned would assist many businesses in a significant way by allowing them access to significant funds during what he described as “this very difficult period.”
“I just want everyone to be assured that now that the public health threat appears to be receding, to firmly focus on what we can do to improve the economic health of businesses, individuals and the country as a whole," he said.
The government has faced criticism for being overly cautious in responding to the economic crisis caused by the COVID-19 pandemic, especially for a lack of certainty over reopening the borders for tourism.
Premier McLaughlin has repeatedly pushed back on that saying the priority was to suppress the coronavirus out of a fear that hastening to open could trigger a spike with even more dire public health and economic consequences.
CURRENT PHASE CRITICAL
Speaking on Tuesday he said the current two week period of the Level 3 Moderate Suppression system in which bars and restaurants have been allowed to reopen for outdoor service is crucial in determining what happens after.
“By this time next week, I think we will have a pretty good idea whether that reopening has in any way impacted the effect and rate of the virus. So, assuming that all goes well, we should be able to lift virtually all of the current restrictions”, he said.
He was specifically referring to public gatherings and ‘touch services’ such as medical clinics for standard services, hair salons and similar establishments.
“We should also be able to allow domestic help and caregivers back into the home and to allow children to have access to playgrounds.”
However, Premier McLaughlin pointed out that some semblance of shelter-in-place arrangements will need to remain in place “for a little while” with residents still required to wear face masks, observe social distancing and practice hand hygiene.
Decisions on inter-island travel are also pending, but in the meantime external borders will remain closed.
Mr McLaughlin said “incredibly good progress” has been made and claims that “Cayman continues to be a success story in the way we have managed the public health challenges involved in this epidemic.”