Big budget surplus to be revealed
Marco Archer, Minister of Finance & Economic Development (Photo by Dennie Warren Jr)
(CNS): The government will be presenting what is expected to be a whopping surplus budget on Friday at the State Opening of the Legislative Assembly. The Throne Speech presented by the governor and the premier’s Policy Statement will all be delivered in the Legislative Assembly tomorrow before the finance minister spells out where government will be getting its revenue from and how it will be spending those taxes in the new financial year which starts on 1 July.
With no new taxes, it is not clear if government will be continuing to make more cuts in government spending as it will be looking to cover the costs of re-introducing a 4% cost of living allowance for civil servants and meeting the fiscal targets set out in the Public Management and Finance Law.
The meeting, which starts at 10am, will be broadcast live on Radio Cayman and CIGTV.
The governor, Helen Kilpatrick will receive and inspect a guard of honour outside before presenting the Throne Speech in the LA Chamber. Once she leaves the floor of the House, Alden McLaughlin will present a government statement regarding its policies and vision for the second half of the Progressives administration.
Marco Archer will then detail the numbers as he delivers the actual budget with the annual plan and estimates bill. The response from the opposition and the broader debate will then start on Wednesday, 20 May, following the Discovery Day holiday weekend and a Cabinet’s weekly meeting on Tuesday.
Category: Government Finance, Politics
Wonder if we will ever find out where all the money was going during the previous administration?
Maybe we took a page out of the “mother country’s” economic textbook and carried out some ‘quantitative easing’ of our own … and voila – economic bounce-back?!
Whatever the reality, Caymanians should be more at ease with our claims of economic renewal when compared to certain other countries – some of which are the biggest critics of all things Cayman.
My bet is Dart has been fuelling the govt. coffers in exchange for more massive concessions. You can’t get this surplus out of thin air and Cayman’s money trees quit bearing a long time ago.
It is NOT a surplus since we are still in debt. Watch this space for the real figures.
Post hoc ergo propter hoc is a form of logical fallacy whereby it is assumed that one thing (the election of a PPM government) caused another (a budget surplus) simply because one thing happened after the other.
To ask whether the PPM deserves credit for the current budget surplus is not partisan hair splitting or nay-saying; it is a perfectly valid question that bears serious consideration and debate. Please post your thoughts as a reply and let’s consider the facts please rather than sliding into partisan mud-slinging.
So let’s begin with the hypothesis that PPM policies led to the surplus and attempt to prove it.
There are only two ways a budget surplus can come about – an increase in revenue or a decrease in spending. So let’s look at the impact of actual PPM policies to see which side of the ledger, if any, they affected.
Revenue increase
A revenue increase can come about either through 1) new revenue raising measures or 2) an increase in the economic activity on which an existing revenue measure is based (such as real estate transfers or company incorporations)
1) There have been no new revenue raising measures that I am aware of. If you can point to any, please add them in your reply. In fact, the only changes I am aware of are revenue reductions such as the fuel duty reduction and general import duty reduction. Can anyone provide any other examples of revenue raising or reduction?
2) Has the PPM introduced any measure to stimulate or grow any sector of the economy? Again, if you have an example of something they’ve done to grow (or indeed shrink) the economy, please name it in your reply. This is an open question.
Spending reduction.
Has any specific policy been introduced to reduce spending? Not that I can think of. In fact, again, there have been some measures which have increased spending such as the recent road improvements and civil service pay rises. (This is not to imply that either was “bad” policy but the question at hand is the fiscal impact).
Again, let’s consider the facts here. Either the PPM deserve credit for the budget surplus or they were just in the right place at the right time. This matters. So which is it?
This is an open question so let’s hear what my fellow Caymanians and residents think!
Or is it just a manufactured accounting procedure to cover the failure for a decade to balance the books?
CNS, I think this is an important discussion, please consider reposting as a viewpoint as it will otherwise be overshadowed by the budget coverage.
In your revenue increase you gave two examples in (1) to answer number (2). a drop in fuel duty and import duty can lead to an increase in spending in the local economy which stimulates growth.
Ok, join the dots for us. How does a couple of million aggregate reduction in gas tax lead to anything significant in new government revenue?
stimulated growth leads to more jobs in the economy, if they need further WP holders, these lead to increased revenue. If increased local jobs more money is generated which will then be spent in the local economy increasing duty income revenue.
It is similar to when a excessively taxed country drops their income tax rate and then in turn receives more taxes as the boost in economy is far better.
Think of a shop if it puts really high prices at 300% over cost they will only sell a few items, but at a large profit, if a shop seels the same poducts at 50% over cost they will sell a lot more at less profit, but the increased volume will lead to an overall profit higher then the first shop.
well one spending reduction is not riding rough shod over tendering proceedures leading to massive multi million dollar settlements, eg the cruise ship port, the Cohen borrowing fiasco, etc. The increase in scrutiny on government credit cards and travel expenses for a minister and his buddies and their families has also led to a huge reduction in costs.
Your commentary and analysis is spot on. The worst part is that he is actually starting to drink his own cool aid and seems to believe that he really did something.
It is all smoke and mirrors and mis-direction. I have done a thorough analysis of the budget and can see what the Government has been doing to pull the wool over the eyes of both the public and the FCO.
there has been no real cuts to public sector spending and I can prove it, there is no point to putting it on here though, I will put it on Ezzard’s windscreen so he can confront the Minister about it at Finance Committee. Then you will have a real story and a real discussion.
Kudos to Mr. Archer. He is the only outstanding one out of the whole PPM/C4C (same thing) lot! You have mine and my whole family’s vote sir.
And therein lies the problem in Cayman. “you have mind and my whole family’s vote sir”. This implies no free thinking within families. Politicians in Cayman are governed by that statement rather than by belief, moral code or desire to do what is right for the country.
what are we going to do with it, spend it on Cayman Brac? tell us, the fools that believe you.
Well seems like Mac’s plan worked.
Until a full set of audited consolidated financial statements is produced for the Cayman Islands Government what is presented and debated is numerical wizardry and propaganda by the ministry of fantasy. These numbers are not real. Just ask any accountant worth their salt.
It has been almost 12 years since the last full set of audited accounts was prepared. I wonder will the minister confirm can that they found the missing 1 billion that was unaccounted for?
Would you like some cheese with your whine?
There are lies, damned lies and statistics. Get your head out of the sand! Our country is still in very deep debt and you are looking through rose coloured glasses.
Finally we may just be I out of the red from which mainly the PPM left us in their first administration! Hope they don’t forget it was them who put this country in such dire straights to begin with!
The PPm spent money on schools road and other buildings like the Government Administration Buildimg. and yes, the costs were high but at least we can see what we got and definitely no slot machine receipts, no so called deals that went sideways like Stan Thomas and no Cohen.
Say what you will but the country suffered many years as a result of overspending by the PPM. Many people would say that it was preferable to not have an overly expensive school that sat there for years unused or roads that came at the expense of many unpaid land owners whose land was taken for roads or an underused govt admin building, all this at the expense of being under the UK’s thumb for years! No sir, defend the PPM all you want, but we the Caymanians people have had to live the fall out and continue to suffer under the policies of the PPM! Help your Caymanian people instead of making it easier for us to be eased out of our jobs!
like paving everyones drive way and car park in the brac, didn’t think that was the PPM
The irony is PPM invited the same culprit who they campaigned against to become a party member then rewarded her with the Speakers position…a reward for her role in all the UDP skullduggery and waste of public funds like paving fiasco in CYB.
Well done PPM. You have officially lost the moral high ground and officially have no shame all that matters is securing power, political expediency and pretending to be different from UDP. Disgusting!
I think what you should really be asking is why the 1st PPM administration felt they had to spend the funds they did? Why were these things not done in the 25/30 years before when the costs were less? Why were the road corridors not purchased years before when land owners were looking to sell the swamp real cheap? This would have only left the road to be built not buying as well. Why was a high school not built in Frank Sound in the early 80’s when the authorities were told it was needed?
I agree that they undertook quite a bit of expenditure but it was necessary and indeed should have been done years before. Ignoring the necessary infrastructure development is just delaying the inevitable.
I trust that my grandchildren will still be enjoying the schools and roads.
Building CHHS was an unmitigated disaster. It is not a school fit for purpose thought it looks very swanky. The costs spiraled because of the constant changes made to the original design and the shortsightedness of allowing educational experts too much say in its design and not enough input from teachers who have to deliver lessons in the classrooms.
Well we will never agree. It seems to me that being Caymanian is a passport and if you have a degree then the world is your CIG government cushy job oyster. Please do not bleat on about the unemployed Caymanians as the majority are unemployable for various reasons. What is strangling this country is poor leadership at all levels and that is one thing that you the Caymanian people must take full responsibility for.
They are doing great. Hopefully some debt will be retired, then you can build a longer runway and the future will be bright.
And pigs will fly!
How about retiring all those workers who run their own businesses while working for CIG? that would be a start.
If you spent less time on here moaning and grudging, perhaps you too can start a honest means of bettering your generation. Crab in a bucket boy, hate to see another Caymanian achieving something and moving up
But how would you know that we may just be out of the red when there are so many gaps in the audited accounts of both administrations?