By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
Lyford Cay's annual wage bill generates the equivalent of $2,858 for every New Providence household as part of a total $453m economic impact, a government-appointed committee has revealed.
The Economic Recovery Committee (ERC), in an appendix to its 60-page executive summary, said the exclusive community on the island's western tip and associated businesses/facilities were responsible for providing more than 7,000 annual jobs and a $201m annual wage bill.
Drawing on a 2019 economic impact study produced by an Oxford Economics affiliate, which produces similar assessments for other foreign direct investment (FDI) projects in The Bahamas, the Committee said each New Providence household would have to be "taxed an additional $1,286" per year to replace the $90m in annual taxes generated by Lyford Cay.
The study, which appears to have been disclosed to highlight both FDI's importance and to dispel suggestions in some quarters that Lyford Cay and similar gated enclaves generate little for the Bahamian economy, said the community that is home to the likes of Baha Mar founder, Sarkis Izmirlian, accounted for 2.4 percent of Bahamian gross domestic product (GDP) or economic output last year.
"In 2019, the Lyford Cay community generated over 7,000 direct and indirect jobs, which constituted nearly 5 percent of the employment in New Providence," the Committee's report said. "As for income, the community (residents and affiliated businesses) generated some $200m in total income, which is equivalent to some $2,858 for every household in New Providence.
"As for taxes, the residents and businesses of the community paid some $90m to the Public Treasury in 2019. To put this into perspective, each household in New Providence would need to be taxed an additional $1,286 per year to replace the contribution of the Lyford Cay community and its affiliated businesses in taxes and fees."
"Affiliated businesses" were defined as the Lyford Cay Property Owners Association; Lyford Cay Club; Lyford Cay Foundation; Lyford Cay International School; and the Lyford Cay Hospital. Besides Lyford Cay residents, sales from associated businesses were also included by Oxford's Tourism Economics affiliate.
The economic impact will likely have reduced in 2020, due both to the COVID-19 pandemic and closure of the Lyford Cay Club for remodelling. Still, the Committee's report said: "When looking at the direct impact the six arms of the Lyford Cay community have on the domestic economy, the study found that residents and affiliated businesses of the community spent some $238m in 2019 on a myriad of goods and services including retail, lodging, employees, transportation and other operations.
"Likewise, the residents and businesses of the community support over 4,400 jobs, which translated to some $135m in direct labour income."
The $90.3m worth of taxes generated by Lyford Cay were broken down into $35.1m in VAT, which accounted for one-third of the Public Treasury contributions. Real property tax was next highest at $19.96m, with import duties and National Insurance Board (NIB) contributions accounting for $14.77m and $13.21m respectively.
The balance included $6.2m in Stamp Duty, some $0.7m in Business Licence fees and $0.3m in departure taxes.
The Committee's report also focused on a 2016 economic impact assessment conducted on Atlantis, which is now slightly dated. "According to a Tourism Economics study, the Atlantis resort sustained nearly 18,000 jobs in 2015, generated over $200m in taxes and fees, or some 12 percent of total tax revenue, and garnered over $900m in total visitor spend," it added.
"The results of the study found that in 2015 the Atlantis resort generated 10.6 percent of GDP and 9.3 percent of total employment through direct, indirect and induced impact. From 2016 to 2026, the resort is expected to invest some $140m in capital infrastructure, which is anticipated to generate an additional $225m in local spending, $236m in GDP, $152m in wages, and $60m in taxes and fees.
"Thus, by 2026 the resort should sustain 18,666 jobs, which should translate into some $793m in wages and approximately $277m in tax revenue." These estimates will now likely have been revised due to the fall-out from the COVID-19 pandemic.
Comments
ohdrap4 4 years ago
Please send me my check.
tribanon 4 years ago
A nice thought, but it's the tax bill coming your way soon, compliments of Minnis and KP Turnquest, that you need to be much more concerned about.
tribanon 4 years ago
Similar type info was contained in the apendices to the National Development Plan unveiled in 2016, a plan which the Minnis-led administration refused to adopt simply because it was developed under the last Christie-led administration.
observer2 4 years ago
The ERC should be ashamed of themselves. All they talk about is foreigners this and foreigners that. There is nothing in this report for average Bahamian....but then again they never did have the best interest of the young man in Bain Town with no job, education or hope.
My position is still that the mega western gated communities, big box hotels are a net drain on society.
Who uses 90% of BEC's power and thus account for 90% of BEC's losses.
Who is utilizing massive amounts of low skilled foreign labor creating a massive drain on our educational, immigration and health care systems...included the big cay in Abaco?
Who "corrupted" successive governments so that there is no focus on the small man?
Who is destroying the wetlands for gated communities?
Who is digging for oil which will distroy our fishing zones?
Who is tearing up our sea beds, buying private islands, slicing off the most beautiful part of Eleuthera for a cruise ship port?
Who is living in a income tax free zone paying small amounts of regressive VAT and duties while making billions in the stock market?
Who is selling all of our sand and Bahamians are not making any money off of it except for a couple of UBPs. Watch what happens to the money when they strike all. None of it will trickle down to the poor.
ERC...please stop telling us that the foreigner is our savior.
Bahamians need to save ourselves.
JokeyJack 4 years ago
Who does have the best interest at heart for the young man in Bain Town with no job, no education, and no hope? His teenage mother? His absent father? His "looking to fill the pews" pastor? His "I gah lock you up and give you lifetime police record" local police officer? His "please tief some money and buy me something nice" girlfriend?
Oh, my bad, I didn't realize all his problems are caused by the white man in Lyford Cay. Apologies.
jamaicaproud 4 years ago
Now is the perfect time for Bahamians to shine and stop blaming Foreigners for every I'll. All Haitians deported, Cubans being stopped on the high seas, Only 65 people in Immigration lockup awaiting flights. Hopefully as soon as they are sent home. The immigration Dept will be shut down. No hotels so you can prevent your 90% losses. Time to shine bwoy. It's like this Covid mess hasn't taught you the whole world is interconnected.
FrustratedBusinessman 4 years ago
Lol I love it when Bahamians bring up the UBP. The white man has been out of power for 50+ years now, and Sands/Symonette/et al. are still living rent-free in Bahamian's heads. How many of the UBP families are even still in the country? I guess the white devils are still the ones holding the black man down, nevermind 50+ years of majority rule.
I really hope that Bahamians are smart enough to realize that if it weren't for the UBP, this country would be comprised of nothing more than a few hamlets and fishing villages. Yeah there were racial issues (the PLP was no better in that regard), but give credit where credit is due. The Bahamas as we know it today would not exist without them, they were just as important as the PLP when it comes to creating the modern nation that we live in today.
ThisIsOurs 4 years ago
White privilege is real. If you had the privilege of being born to one of the white families who split up the land and the economy for themselves, your great grandchildren will be 2 decades ahead of the next 1 day old in the bastinet beside them on the maternity ward.
Now that being said. LIFE IS NOT FAIR. So yes complain if we must but do something about it. education, ideas, skills, hard work etc. Noone is going to fight for us. Noone is coming to save us. In fact we will probably get the opposite because they need a dependent distracted nation.
FrustratedBusinessman 4 years ago
You lost me at white privilege. Do you honestly believe that every white person is born into life with a million dollars in their bank account? There are millions of impoverished white people on this earth, I want to see where their privilege is. The UBP itself was more of a cartel than a political party espousing racial ideology, and had no problem discriminating against their own kind if it fit the bill as well. There were plenty of poor white Bahamians that received no direct benefit from the UBP being in power. If we are really going to bring the American hogwash political discourse over here, lets talk about the millions of Irish, Italians, Polish, etc. who experienced discrimination during the 19th and early 20th centuries in the United States.
You are right in the fact that things will never get better until we make a concerted effort to improve them. No one is certainly coming to rescue us.
ThisIsOurs 4 years ago
oh no i dont believe EVERY white person is rich that's a different statement. And we're not talking abour white people on the earth, we're talking about white people in a black nation where the leaders bow to the white man. Its the Columbus Enigma. I've personally witnessed what the white card will give access to that's not afforded to the black person in similar shoes be they rich poor or middle class. It's irrefutable.
The white people know it's true. Life gives all of us one or more things to allow us to move, for some it's wealth, some it's smarts, some beauty and some skin colour (in a wotrld that puts value on it). It just is.
C2B 4 years ago
It's a good thing you said "a net drain on society", not the economy. This is therefore subjective and your opinion. You are entitled to it.
sheeprunner12 4 years ago
Soooooooo, can/has the Lyford Cay economic impact study be/been re-created throughout The Bahamas??? ............. What about Albany, Treasure Cove, Treasure Cay, Exuma Cays, Cape Santa Maria, Chub Cay, Bimini Bay, South Abaco, Briland ........ etc????? .............. Where are the studies on their socio-economic impact???
observer2 4 years ago
Sheeprunner. The ERC says these other communities and islands don't count.
JokeyJack 4 years ago
Those projects may not have paid all of their "license" fees yet - LOL.
observer2 4 years ago
"the study found that in 2015 the Atlantis resort generated 10.6 percent of GDP and 9.3 percent of employment".
Ok, how much is Atlantis resort generating now? 0% of GDP....in fact its a net drain....they need to pay the staff their redundancy pay so they can get on with their lives.
Did the ERC report go into all the tax concessions and land donated to Baha Mar and Atlantis...on the backs of the poor Bahamians?
Did the ERC go into the sale of Atlantis in the leveraged buy out that Sol did and saddled the property with so much debt that can't even do renovations and the place is looking tired.
Then resold it to Brookfield .... I know Brookfield is crying in their beer that they didn't sell Atlantis when they had a good offer. Atlantis is cash flow negative, always was, always will be. Its a capital game of selling it forward to the next fool while getting freebees from Bahamains.
WAKE UP BAHAMAS...YA GETTIN SWING AGAIN FROM RICH FOREIGNERS AND THEIR PUPPETS.
tribanon 4 years ago
All too true.
Porcupine 4 years ago
If they didn't feel they were getting more than their money's worth, would they be here?
Clamshell 4 years ago
Meanwhile, central Eleuthera has been without water for a week, everything shut down — including the health clinics, while Covid cases are spiking there. No story in the Tribune — their staff is too busy giving us the latest details of professional volleyball in Romania and Finland.
Way to go, Tribune! Gotta EARN that D-, eh?
birdiestrachan 4 years ago
I stand to be corrected. But most of those jobs. behind the gate are minimum wages jobs. They employ a lot of foreign labour also. and the money is sent out of the Country.
These are the residents' doc speaks off.
mrsmith 4 years ago
GOOD! Then they have more than enough to cover new business and individual taxes!
SP 4 years ago
The Economic Recovery Committee, said Lyford Cay and associated businesses/facilities were responsible for providing more than 7,000 annual jobs and a $201m annual wage bill?
Before we bow down to Lyford Cay we need to confirm "Who" are holding these Lyford Cay 7,000 annual jobs at a $201m annual wage bill!
Predominately Filipinos and "others" hold the vast majority of these jobs. NOT BAHAMIANS. And major portions of this income is repatriated, so we have no reason to be overly thankful to Lyford Cay!
juju 4 years ago
Observer2 you need to save YOURSELF
hrysippus 4 years ago
The usual negative comments from the usual commentators. You never miss the water until the well run dry. It is sad that some Bahamians would like to see all the enclaves in the country that are the home to wealthy Bahamians and wealthy foreigners closed and their many employees without a job. Just sad.
ThisIsOurs 4 years ago
Not true! What Bahamians want are nice inclaves for us. We don't want the crumbs. We don't want to be beaten with the stick while the monies get to do as they please in our country. Like the young girls Inspector Smith (he been reprimanded yet? anyine get his badge number?) allowed to climb the fence to get to the beach while the rest of us getting 200 tickets for parking and looking at the beach. That's what we don't like.
SP 4 years ago
What is really sad is people that purposefully misconstrue a narrative. Nobody remotely suggested they would like to see all the enclaves in the country that are the home to wealthy Bahamians and wealthy foreigners closed.
Everyone with a D- average mentality understands the benefits derived from the gated communities' needs for a multitude of various local vendors.
The point is, the Bahamas would benefit much more if wealthy Bahamians and wealthy foreigners hired Bahamian, domestic, and skilled labor. Why should we allow ex-pat domestic and skilled labor when Bahamians are capable of doing those jobs?
No Bahamian laborer would be granted any job in the Philippines if a Filipino could be found to even marginally fill that position! Why don't we love our people?
The Bahamas should simply adapt to the policies of the countries ex-pats come from. If their country does not allow Bahamians to be employed, then we shouldn't allow their people to be employed here!
Why should we continue bending over backward employing ex-pats who do not participate in the local economy, care nothing about our country and people, while our own people suffer, are forced to live substandard lives, or need to turn crime for survival? Then of course you say "Bahamians are thieves".
observer2 4 years ago
SP. I agree with you 100%.
In canada they have just revoked the work permits of many maids who came in from other european countries.
Once that was done, numerous maid jobs paying $20 an hour were taken up by white canadian college students.
These were good paying jobs due to good government regulation.
foreigners love fillipiono worker because they work 18 hours a day 7 days a week for $250 plus room and board. that is slavery. no matter what the race.
FrustratedBusinessman 4 years ago
I am curious to know how anyone thinks that the Bahamas is going to survive without external sources of income. Would someone please care to tell me what natural resources we have that are going to enable us to ditch tourism as our primary source of revenue?
Yes, we do need to diversify; however, we need to recognize that there are limits on what we can do as a nation with little to no natural resources within our borders.
observer2 4 years ago
FrustratedBusinessman. To drastically reduce our reliance of foreigners we can (1) convert to solar energy (Florida Power and Light now have an option to buy a portion of their solar fields to get all your power from solar. This would cut our oil bill in half (2) move to electric cars (3) make a real effort for agriculture (4) stop making school children having to wear cloths which need to be ironed (the iron uses the most electricity of any houshold appliance (5) we can put a freeze on massive gated communities and hotels which use up 80% of the energy and provide low paying jobs - well C19 got rid of them anyway (6) we can stop the cruise ships from polluting our oceans so we can expand our fishing industry.
There is lots we can do. It's just that the ppl in the ERC and the likes have us brain washed that foreigners are the saviours of poor black ppl.
by the way our leaders think the same thing.
Porcupine 4 years ago
Agreed.
FrustratedBusinessman 4 years ago
Solar energy is incredibly inefficient. Many of California's recent energy problems (I guess BPL services them as well) are a direct result of an overemphasis on renewable technology while getting rid of their nuclear plants. I think that we should explore the technology for sure, but only if it is going to be more cost efficient compared to non-renewable sources. Another thing to consider is how hurricane proof are these alternative sources of energy? We are always going to have to take that into consideration as well.
The agricultural potential for the Bahamas is rather limited. Some crops can be grown here, but for the most part, the soil is rather shallow and large-scale commercial farming will require a lot of funding put into fertilizers to compensate. This is another thing old as the hills with us : Abaco once saw success with citrus farming, but a weird fungus killed the industry. On top of that, I doubt that many new employment opportunities will be created for Bahamians by farming. We all know that another political fire will be lit when the farms request work permits to import Haitian labourers (which will be like pouring gasoline on a fire when it comes to the shantytown issue).
If we really want to reduce the cost of electricity (what seems to be an emphasis of your post), we are going to have to stop the favouritism and make everyone (hotels, politicians, etc.) pay their bills alike. We cannot tolerate any more Leslie Millers when it comes to BPL if we are going to expect payments to decrease. The fuel cost is one thing, but when the money collected from those of us who consistently pay our bills is only used to play catch up and compensate for those who don't pay, we are always going to have an issue.
When it comes to the economy, FDI is the best thing we have in the short term. The potential for new industries is rather low. I think our best shot at developing a new industry lies in investing into the tech sector. In order for it to work, we need to 1.) fix our garbage infrastructure (ie. power grid, for starters) 2.) Maintain a low to no tax regime and tell the EU/OECD to piss off and 3.) Invest more into the educational sector to bring students up to par. Many companies are fleeing jurisdictions such as Ireland following the closure of the tax window, and we could market ourselves as an alternative destination. I think it is possible for us to develop a domestic industry as well, given our close proximity and cultural affinity with the US. Other than that, we will always be reliant on our sun, sand, and sea to make us money. The history books prove this over and over.
themessenger 4 years ago
Same ole weeping and wailing and gnashing of teeth from our ignorant people. The white man is to blame, the foreigners who invest in and live in second homes here are to blame. And yes, Bahamians do tief, how many Filipinos you see in Fox Hill prison? You say they use 90% of the power, thats debatable, but they pay their bills. In a way I wish all of them would just up stakes and leave this cesspit to all of us good Bahamians so we can finally achieve the utopia we deserve and they’ve been denying us for the last fifty years.
observer2 4 years ago
TheMessenger. Why would they leave the Bahamas? they have already left Europe, Canada and the US with their billions which is shielded from Canadian capital gains tax (50%), US Cap gain tax (20%) and European Cap gains tax (30%). Bahamian capital gains tax (0%).
You can't build a country off of regressive VAT and customs duties....you need to tax billionaires. In any country 80% of the taxes are collected from 20% of the richest ppl. In the Bahamas poor ppl pay more taxes than the rich because there is no income tax.
That is why the bahamas is broke, will remain broke and the foreigners love it just the way it is. We have dumbed down our children for 50 years they don't even know they are dumb.
Look at the composition of the ERC? Where do these guys get their incomes from? They all have a vested interest in the status quo. Therefore none of their recommendations which were zeroxed from the PLP National Economic Plan are revolutionary.
By the time they tray to impliment any of it the PLP will be back in power...the first they will do is have another economic commission to figure out what to do.
By that time the bahamian dollar will be worth 50 cents.
Porcupine 4 years ago
You said it right. "they all have a vested interest in the status quo."
Dawes 4 years ago
Can you show the information on who pays the most taxes. You have said the poor pay more and i am interested to see what % that is. Thanks
sheeprunner12 4 years ago
Observer2 has it right ........... too many sychophantic, brainwashed Bahamians who are slaves to their political masters ...... and only a handful are getting the PEP cookies.
C2B 4 years ago
Decouple the currency from the USD and let the chips fall where they may. Eliminate all import duties and institute an income and asset tax. A good 50%-80% devaluation in the Bahamian dollar will follow. The local legacy rich will get a severe haircut and rich foreigners will stay away because of the taxes. Then the only foreigners to complain about will be short term visitors. We can tolerate them as they are leaving soon. Most Bahamians aren't travelling anywhere anytime soon so no need for a strong Bahamian dollar. If you are serious about getting rid of foreigners and local rich whites, go ahead and take the necessary steps.
FrustratedBusinessman 4 years ago
I like this sort of thinking. We are going to be the next Little Haiti in another 2-3 generations anyways, lets get a head start on the process!
observer2 4 years ago
C2B. You got it half right. Yes a 50% devaluation would occur but the rich Bahamians will get even wealthier because the bulk of their funds are in hard currencies safely in Europe.
Income tax on the wealthy will dramatically improve the governments finances, which seems to be the only thing Turnquest is worried about. The rich foriegners will simply give up their Bahamian permanent residencies and live here less than 3 months a year. We will get off the European black list for sheltering tax exiles.
The OECD was to see Bahamian IBCs pay tax not ppl. Anyone with any money has it in corporations. The tas residence certificate is a nonsense ... who Dey tryin to fool? Da oecd, lol.
If wealthy Bahamian ppl paid large amounts of taxes they would suddenly become more interested in governance Rather than leaving it up to the poor and uneducated and untraveled to govern.
Most poor ppl run for parliament to make a living or a massive amount of money through connections with foreign investors.
They forget about over the hill once Dey reach.
FrustratedBusinessman 4 years ago
With all due respect, I can only pray that you never get anywhere near a position of power in the Bahamas. The wealthy Bahamians are not going to stay here to pay any income tax when 1.) most are born in the US 2.) they can easily buy their green card and get out of town. In addition, what you are describing would involve a complete and total collapse of the real estate market that would put thousands out of work and bottom out the market in no time.
The EU/OECD only care about their own taxpayers that they have ran off through high taxation in their jurisdiction to fund decades of quasi-socialist money pit, poorly administrated national programs. They could not give two hoots about what a Bahamian company/individual does as long as it does not effect them in particular. The flaw in their thinking lies in the fact that they believe they can run their money back home; there will always be another jurisdiction willing to shelter their expats, whether they like that or not. If not the Bahamas, then Panama, so on and so forth. Instead of adjusting their tax rates/lowering their spending, they would much rather destroy the Bahamian offshore industry in a rather futile attempt to chase their money home.
Ironically, the same UBP government that is vilified and demonized by the vast majority of Bahamians did more/was going to do more for the over-the-hill area than any post-independence government. It is a common fact that prior to losing the 1967 general election, the UBP government had plans drawn to install water connections throughout the area. 50+ years later and so many parts of Nassau still relying on community pumps speaks volumes to how inefficient and corrupt post-majority rule governments have been. An utter crying shame to think that Bahamians still have to draw water from the community pump in 2020.
ohdrap4 4 years ago
@ observer
Funny how people worry about little things. Ban the plastic shopping bags do nothing about the energy intensive production of reusable shopping bags and disposable plastic beverage bottles.
The synthetic no iron fabrics or blended fabrics are energy intensive to produce and later go on to release microplastics and chemicals into the water table.
Also most school uniforms no longer require ironing these days.
observer2 4 years ago
I stand corrected and hold my head in shame
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