Over 10,000 cars imported in last 5 years at $127M How Much More Can Our Roads Take?

by Earl Bousquet

I have listened, watched and read the positions, arguments and responses of the various interested, concerned and affected parties in the period since the Prime Minister presented his budget. The biggest used car dealer on the island has been loud and forceful on the issue, but neither his colleagues nor the public have lined up behind him. After all, everyone knows Mr Roserie has been in the business for over ten years, during which he moved from being a small businessman in SLISBA to becoming President of the Chamber of Commerce.

Many may have fallen for Mr Roserie’s line that he has “broken the class system” and that he has “empowered people” by making vehicles available to them cheaply. That may sound like all the truth, but it’s not. In the first place, he clearly does not understand what “the class system” is if he thinks he’s broken it – or that it can be broken by any one man. Secondly, he also does not understand the first thing about empowerment if he considers it has anything to do with being mobile.

The fact is, Mr Roserie and those who came after him in the used car business did make owning a car cheaper. But it is also a fact that the used car business, as practiced here, is very much like buying a jab-en-sa.

Most people would like to buy a car cheaply – and for the cheapest price possible – especially with the public transportation situation is what it is. But it is also true that in making that choice available, the Customs Department has found that some car dealers have been engaging in the illegal, corrupt and criminal practice of under-invoicing, thereby refusing to do their civic duty of paying their fair share of the tax burden.

            Quite apart from understanding and accepting that most people don’t like to pay taxes -- and that there are those who make it a duty to evade paying their share of taxes -- it is also necessary to consider the actual problem of the number of vehicles on our roads, and the need to begin to pay attention to the traffic problem. We only have that much space and that many roads on the island and it is the government’s duty to look ahead and plan ahead, to identify potential problems early and do what it takes to nip them in the bud or minimize their effect.

            It is a fact that the rate of growth of the vehicle population is faster than that of actual population growth. My research indicates that some 10,000 cars were imported into St. Lucia in the five years from 1997 to 2001 at a cost of $127 million. Of those, only 856 are taxis and the rest (8,667) are private. (And remember we are only talking here about cars – not minibuses, trucks or other types of vehicles.) The official statistics also indicate that there at the end of December 2001, there were almost 36,500 vehicles registered. Of that, 10, 400 (almost one third, or 30% or more than one quarter) of the cars on the roads of St. Lucia were imported in the last five years.         It therefore means that we will have a serious problem if we continue like this, because the answer is not in building more roads, because the money to do it -- which should come from payment of taxes – is being held back by the very ones who are causing the congestion on our roads.

            Disposal of the wrecks of such vehicles is also a matter of concern that many people overlook. Vehicles that no longer work are simply left by the roadside wherever they died. Owners hardly ever consider paying for or arranging its disposal to the dumpsite. That job is often left to “the rubbish truck” or the relevant government authorities like the Castries City Council or the St. Lucia Solid Waste Management Authority. Same with tires, vehicle carcasses, old seats and other dismembered vehicle parts. This is but one of the many uses to which money generated by the Environmental Levy goes.

            Under-invoicing is just one of the many problems involved in this whole equation, but it is not only the car dealers who are involved. The Customs Department has been carrying out its own sting operations and several merchants and car dealers have been caught red-handed with two sets of documents: one for Customs and an original one in their offices. Some have confessed in writing and have agreed to pay up to escape having to go to court.    

            And then there’s the interesting fact of how this matter of the $12,000 levy on vehicles five years and older. Mr Roserie struck a chord with the common man when he claimed that anyone wanting to buy a car needed to get $12,000 more. The other fact he chose to hide, however, was that this amount relates to cars that, up to Budget day, were banned and it was therefore impossible to import them.

He also chose to ignore that in some countries right here in our region, the practices of used car dealers and the results of their business have led to their activities either being banned or becoming virtually extinct, not because of any government action, but because people have decided to cut out the middle man and order directly on the internet. In fact, internet sales in St. Lucia are extremely high, with over 300 such purchases registered in 2000 – and many, many more in 2001.

This debate is, however, very healthy. It enables the consumers out there, the people, to get more information and be in a better position to judge. My two-cents contribution to the debate is therefore being offered with that in mind. Take it and do what you want with it, but at the end of the day, just consider what it would be like on our roads if everybody owes a car.

In the meantime, the government’s announcement Monday that the increase in the environmental levy will become applicable as of June 1 has done several things. First, it addresses a major legitimate concern: the fact that so many people would have ordered vehicles before the budget and the new measures on the basis of the old tax regime. Having budgeted for particular ceilings of expenditure, such persons were placed in an unfair position. Similarly, it would have been an administrative and logistical nightmare for the Customs to have operated on the basis of trying to prove who ordered before April 30. Now, such persons can have their cars processed on the basis of the old regime, once they provide adequate proof to Customs. It also means that the car dealers with vehicles in stock will have almost three weeks to sell them off, which also means that those who feel they will not be able to buy a car when the new measures are implemented will be able to do so in the time left.

But perhaps the clearest indication that comes out of the Prime Minister’s announcement Monday is that this is a government that is not afraid to take strong and unpopular action in the national interest. It will stand by its decisions once it is convinced such decisions are correct and will not succumb to threats from any quarter. But it will also listen to the voice of the people and respond accordingly, always in their best interest and not as a result of maliciously inspired public pressure.

 May 14, 2002

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