CIG passes $1B budget in face of new risks

| 27/06/2016 | 34 Comments
Cayman News Service

Finance Minister Marco Archer in the LA

(CNS): Legislators passed the Cayman Islands’ first ever 18-month budget Friday, after more than seven days deliberating over the spending plan. Government will spend more than $862 million, 3.4% more than last year (pro rata), and collect over $908 million, but with additional revenue from authorities and companies the public purse is expected to collect around $1.2 billion. But the predictions and forecasts, for its first ever longer term budget were made before the global economic turmoil and volatility triggered by the unexpected referendum result in the United Kingdom, which will see Britain leave the European Union.

The CIG budget includes around $4 million extra spending for education, with the finance minister promising to find more, and pay rises for civil servants, but there are no new taxes or fees levied in the spending plan.

Six million dollars has been set aside for buying land for conservation and CIMA has been given another $3.2 million to deal with regulatory developments, while the duty breaks on CUC, building materials and discounts on trade fees for small businesses all remain.

The Needs Assessment Unit and family services have been given an extra $1.1m to address the needs of the most vulnerable. There is also $1m for legal aid and another half a million dollars will go towards funding prisoner rehabilitation services to meet the requirements of the new Conditional Release Law.

As well as spending on pay increases for civil servants, government will also spend over a million dollars on civil service reform, including the controversial creation of a supra-ombudsman’s office, merging the Office of the Complaints Commissioner and the Information Commissioner’s Office.

But there are now no guarantees that the relatively sunny economic outlook on which government had based its 18-month spending plan will materialise, given the impact the UK poll has had on world markets and the international economy.

On Monday financial markets remained volatile, as the pound sterling plunged to new lows against the dollar and yields on 10-year government bonds sank below 1% for the first time. Following UK Chancellor George Osborne’s speech to try to calm the markets, in which he said the UK was ready to face the future “from a position of strength”, banks, property and airline prices were hard hit, with sharp falls causing a momentary halt for some shares as automatic circuit breakers kicked in. Osborne also indicated there would be no immediate emergency budget in Britain – yet.

“It is inevitable that Britain’s economy is going to have to adjust to the new situation we find ourselves in … It will not be plain sailing in the days ahead,” he stated.

With much of the Cayman government’s revenue based on duties and fees, which are exceptionally vulnerable to the global markets, the certainty of the government’s ability to meet its own budget targets is now in question.

In his introduction to the spending plan as the budget session opened the last month, Finance Minister Marco Archer warned that the forecasts were based on “economic projections, specific market conditions, government policies, and historical trends”.

See the detailed budget documents on the finance ministry website

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Category: Government Finance, Local News

Comments (34)

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  1. Haranguer says:

    Move the stinking dump! ………………………..please

  2. Sharkey says:

    Who in their life time would imagine the budget for the Cayman Islands would be a billion dollars . A billion dollars is alot of money to share around .
    The Government better be careful with that billion dollars , knowing the decision that Great Britain just made .

    • Anonymous says:

      Wouldn’t fill the UK gap for an hour!

    • Anonymous says:

      Does anyone remember Vassel Johnson sounding a cautionary note back in the 70s when the annual budget exceeded 12 million dollars?

    • Anonymous says:

      A billion dollars is neither here or there now. Remember, government recently ” lost” a billion dollars which has still not been found!
      Did you ever think you would see that in your lifetime?

  3. Anonymous says:

    $250m of sound fiscal policies and initiatives, $750m fraud corruption and mismanagement.

    • Anonymous says:

      4:22…. how do you live with yourself … if I allowed myself to make stupid and irresponsible comments like that. I would flog myself!!!

      get a life!

  4. Anonymous says:

    People seem to be missing that this a “budget and a half”.

    So the numbers are probably not too far off recent yearly norms.

    So some smoke and mirrors and Alden just wanted to be the first to say he had blown a billion!

  5. Legasea Projects says:

    BUILD THE DOCK!

    • Anonymous says:

      For who? So that more ill mannered illiterates (many of whom are not from here) can stand around haggling for customers as a disorganized rabble destroying perceptions that Cayman has the potential to be different from the sociology and economic disasters that surround us?

    • Anonymous says:

      Yes, large capital projects backed by UK sovereign debt are what is going to work right now.

  6. Anonymous says:

    CNS, I don’t think your spin on the passing of the budget is fair. No one knows what Brexit will cause, not even the people who brought it about. On the basis of what exactly was the government supposed to reconsider any part of the budget? Professional firms could get a lot of new work because of this. We might see an increase in people wanting to work here. The stress of the turmoil in the world might make people book holidays. Or it could be the exact opposite. We don’t know. All we can do is stick to our best laid plans… The government will have to determine what areas are at risk of impacts and prepare contingency plans for the possibility of receipts not materialising as projected.

  7. Anonymous says:

    Remember it was “KT and the Gang” in 2008 who declared the Lehman Bros collapse was nothing to worry about.

    The hits will always keep coming.

  8. Bean Counter says:

    Revenue projections of $1.2 billion is Wishful thinking by Marco Archer and his Progressives comrades. Numbers on a page based on pure fantasy. Elsewhere the message is be cautious and conservative with public finances but again Progressives seem hell bent on ignoring all the global signs as they did in 2008.

    Revenue projections are too aggressive. The Financial Services Industry will see a decline in revenue and fees paid to government due to global conditions and the increasing regulatory environment driven by the G20 countries who will demand that tax dollars based offshore are repatriated and the potential black listing of Cayman in the future. Cayman Islands is seen as one of the primary culprits therefore international pressures will only intensify. This sector contributes over 45% of coercive revenues.

    Additionally, the Government’s aggressive and expensive infrastructure projects plan, driven by the 2017 elections campaign will adversely impact financial projections and the cash position in the public purse. Disappointing that no lessons have been learnt by the Progressives since their last term in office 2005-09. We expect better from the Finance Minister Marco Archer as the public are being sold a bill of goods.

  9. Anonymous says:

    The Pope says Christians should apologize to gay people.

    (CNN) Pope Francis said Sunday that Christians owe apologies to gays and others who have been offended or exploited by the church, remarks that some Catholics hailed as a breakthrough in the church’s tone toward homosexuality.

    “I repeat what the Catechism of the Catholic Church says: that they must not be discriminated against, that they must be respected and accompanied pastorally”.

    “I believe that the church not only should apologize to the person who is gay whom it has offended,” he added, “but has to apologize to the poor, to exploited women, to children exploited for labor; it has to ask forgiveness for having blessed many weapons”.

    LGBT people have a LEGAL and SPIRITUAL right to this apology. If Eden, McKeeva, Ezzard, JuJu and others in our LA persist on conflating their legal obligations of office with their personal fundamentalist spiritual beliefs, then they should be removed from public service for the health of Cayman. It’s a public disgrace that we even have to have this conversation in 2016.

    • Unison says:

      Yes, but the question has to do with discrimination and hate. The Pope was not giving any excuses for living a homosexual lifestyle. The Catechism defines the practice of it as a sin. All he is saying is that gay shouldn’t be subjected to hate and discrimination, and because they are sinners like the rest, they too need pastoral attention. Christian leaders should be loving and kind to them.

      • Unison says:

        Again, just because Eden, McKeeva, Ezzard, JuJu and others in our LA oppose a lifestyle sinful and not good for our familial society, does not mean or = them hating and discriminating people. They have a conviction that traditional family and the raising of children contributed well to the pillars of our country.

        • Anonymous says:

          At least two of these have homosexuals in their families; it’s sad that they can’t come clean about it for fear of losing the Bible vote.

        • Anonymous says:

          During the budget, these elected officials proposed that the Attorney General form a special legal fund of public cash to fight the lawful recognition of LGBT people. Those are not just discriminatory opinions, those are DISCRIMINATORY ACTIONS. Their illegal actions and hateful posturing held up the budget debate with seeming consent of the Speaker, Deputy Governor and Attorney General – none of whom spoke out about this.

    • Anonymous says:

      Really relevant in a budget discussion??

      • Anonymous says:

        You wouldn’t think so, but just last week, in headline news, our MLAs held up the budget debate to talk about creating a legal pool to fight any IAT appeal in favour of LGBT people and in opposition of their legal right to recognition and non-discrimination.

    • Anonymous says:

      I think the Pope is talking about the hatred for gay people,…………. you know, the kind of hate that you have for the opinions of Eden, McKeeva, Ezzard,JuJu and others that do not share your opinion.
      Just saying that what the Pope is asking people to apologize for is hatred of other people that are different ……….. Perhaps that process can start with you.

      Gay Caymanian.

      • Anonymous says:

        Only a very strange pro-intolerance “Gay Caymanian” masochist would be “in favour” of Christian Fundamentalist panderers petitioning the Attorney General to set up a legal fund (of public cash) to fight the lawful entitlement of LGBT people to their right to live without discrimination. Nice try.

  10. Anonymous says:

    Yeah, CUC needs duty breaks. Oh please.

  11. Anonymous says:

    Someone should note that it was passed on time, with a surplus, in full compliance with the FFR law, and without a $15million slush fund for the premier. Maybe someone else will tell us what the vote was.

    • Reality Check says:

      PPM PR machine hard at work.

      1. Surplus is not real

      2. Passing a budget on time is what is expected. You failed to note the increase in spending by PPM.

      3. Compliance with FFR required by law

      4. Taking 6m from EPF to buy parcels of land from a PPM supporter is exactly like the UDP and hypocritical.

      • Anonymous says:

        I’m from the US not the PPM, and it appears to me that compliance with the law is a fairly new thing in Cayman.

  12. Unison says:

    O o … the last when Alden and Kurt was in power and they up expenditures in the last year before elections … remember the expensive school project? At that same time we had a global recession, and PPM was defeated by McKeeva Bush.

    Hopefully with Marco on their side, they are exercising good judgement ???

  13. Anonymous says:

    yet another administration woh had not got the backbone to try and curb government spending…

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