Cort Says Airport Tax Hike a Necessary Evil

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Economy

Saturday, 23 June 2012 02:30

By caribarena news

Antigua St John's - Leader of government business in the Senate Dr. Errol Cort has led the passage of the new airport administration tax that will see passengers using the VC Bird International Airport paying a total of US$75 to enter and depart the country.

“Is twenty-two US dollars too much to ask for?”

This is how Dr. Cort opened the debate for the tabled taxes. "Is that too much? I think to be fair in answering that question is another question of what is being done elsewhere.”

The national security minister encouraged the Upper House to consider the norms at other facilities in the region and noted that the level of service currently being offered at the local airport terminal stands on par with the facilities available, while the new fees come in line with the new amenities.

"The facility is being upgraded in a significant way… What we are doing is no different from what all the other countries have done to upgrade their facilities. What we are doing is a necessary evil. We have to carry our own weight..." he said, citing the unavailability of financial aid at the level to which the region has grown accustomed.

Furthermore, Dr. Cort cited countries like Barbados, St. Maarten and St. Kitts & Nevis with notably higher airport taxes than what is being proposed locally.

"I do not believe that US$22 is unreasonable for us to propose against the background of the current expansion of the VC Bird International Airport. I believe it is an onus proposal to make," Cort said, urging unanimous support for the Bill.

But it was not as easy as he had hoped, as opposition Senator Lennox Weston labeled the bill nothing short of “madness”  as he questioned the absence of more than half a dozen senators from Friday’s sitting. Weston pointed that the bill was “dangerous”  and has the potential to cause damaging repercussions down the road.

"This tax will wipe out our tourism sector for the next season," he predicted.

Also, the Senator laid great emphasis on the action of the Antigua Hotels and Tourist Association (AHTA) and the aviation industry in both coming out publicly against the increased tax, saying that their plight must be given an ear.

And despite what he termed government’s ramblings about airport development and sustainability, Weston is convinced that the tax is nothing shy of a plug requested by the International Monetary Fund (IMF) to fill one of the many holes in the country's economy.

To give teeth to his reasoning, the Senator questioned why the government opted not to introduce an additional tax for cruise ships for the upgraded facilities there and why it did not set a similar trend with developments in other parts of the tourism industry.

"It damages directly your tourism product. By putting charges on the tickets we will be wiping out the industry," Weston reiterated.

He went on to cite the controversial APD tax imposed by the British government against opposition lead by among others former CTO Chairman and Minister of Tourism Harold Lovell who, ironically, is now the man behind the new airport tax - strikingly similar to the APD that he opposed.

Despite the opposition, however, government senators maintained that the purpose of the bill is to make proper provisions to ensure that the airport functions effectively and efficiently. Support was given by Senator Malaka Parker, who noted that the arguments of the opposition came from inept reading, reasoning and rationale. She voiced some concerns about the Bill and suggested that a portion of the revenue income be applied directly to the tourism industry, considering that the bulk of the intake is expected to come from tourists both regional and international.

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"I believe that at least a percentage of this administration charge can be redirected to one of those (tourism) industries," Parker said.
She went on to cite Senator Weston’s rebuttal to the Bill as "ignorantly over-simplistic" and "seriously flawed and unrealistic." Her controversial statement did not go unchallenged, as Senator Westin proceeded in the middle of her presentation to challenge her intellect and ability to understand economics as he presented it.

This led to some verbal jousting between the two senators that required the intervention of Senate President. In the meantime however, Senator Chet Greene, who was on the record on Thursday as saying that the Bill was likely to be shelved by the government following what he perceived as a realization by the administration of its many errors, made a brief but forceful presentation.

Greene said that the bill seems to show no concern for Antigua & Barbuda’s need to maintain or carve out an advantage in the regional tourism industry. He suggested that the approach to such a thing as increased taxes at the airport ought to be done carefully and with consideration given to the objections by major stakeholders like the hotel association and the airline industry.

"They have spoken, and I think that courtesy dictates that their voices be listened to. I am baffled that the government would still want to push through this simply because it has numerical advantage in the Senate," Greene said.

He opined further that the piece of legislation is fraught with danger for an already fragile economy, and questioned why no clear exemptions from the tax were made for athletes, servicemen and women of Antigua & Barbuda.

Further contributions were made by Senator David Massiah, who said that from the labour perspective he was “very much for this particular bill and for the move taken by the government.” Massiah, who heads the Antigua & Barbuda Workers Union, said the bill was undoubtedly necessary in the face of ongoing payment challenges plaguing airport employees on almost a monthly basis.

"From a union standpoint we think this is an appropriate situation," Massiah said. “We are asking for the services and improvement and it must come from some place. We must take charge of our destiny.”

He too said he had some reservations to the Bill, like monetary collection from the outside agencies, but none of these concerns were significant enough to warrant the law’s immediate review. He voiced support for further “tweaking” along the way.

"It is very timely that we are passing this particular bill. My concern would be the method of collection and that we are getting our dues on time," Massiah said.



Responding to the cries for an ear of consideration for the AHTA and the airline industry’s concerns, Massiah said that based on information reaching him, the Minister of Tourism had met with representatives of the two bodies following their expression of concern on Tuesday. He said he was not sure what came out of the talks, but confirmed that consultations had taken place.

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