PPM accuses PACT of choosing ‘massive borrowing’

| 29/11/2021 | 49 Comments
Cayman News Service
Opposition Leader Roy McTaggart addresses Parliament

(CNS): The leader of the opposition took aim at the new finance minister on Monday when he delivered his response to the PACT Government’s first budget. Roy McTaggart accused the new administration of choosing “massive borrowing” over fiscal prudence and implied they were not competent enough to make the decisions needed to balance the books.

Chris Saunders had said in the Budget Address that he would be using the line of credit that McTaggart had negotiated as finance minister in the previous administration. The opposition leader took aim at this, however, claiming that he had only sought that credit as a contingency to be used if absolutely necessary and not “for a spending spree”.

With the pandemic still impacting government and the economy and a great deal of uncertainty ahead, McTaggart accused the PACT Government of increasing borrowing to spend on political projects rather than to deal with the health crisis.

“This borrowing has not been necessitated by this crisis, rather it reflects a choice to fund large amounts of capital spending from borrowing rather than paying for it from operational revenue,” McTaggart said.

He criticised Saunders for copying politicians all over the world by increasing debt, since this placed a burden on future generations. He said that increasing borrowing was “unsustainable”, as he slammed PACT’s main claim that sustainability was at the heart of their policy platform. He also accused them of borrowing to avoid making difficult political choices.

“New and inexperienced ministers are naturally keen to see the priorities of their ministry funded,” the opposition leader said. “By borrowing for capital purposes, it means that all the available revenues can be dished out for ministers to use… without any need to choose between relative priorities. Rather than enforce fiscal discipline, the premier and minister of finance have presided over a free-for-all.”

McTaggart accused the new government of negating the hard work done by the previous two PPM-led administrations by “borrowing with abandon”, with plans to increase borrowing by more than $350 million.

The former finance minister raised concerns about the operating deficit expected at the end of next year and the small surplus at the end of 2023, saying it wouldn’t take much to turn such a small surplus into a deficit given the challenges ahead. He warned that borrowing costs could also easily increase in the coming years.

Despite the criticism regarding the debt, McTaggart said he welcome several of the initiatives and supported the broad objectives set out in the PACT budget. He said they were rolling out policies that the PPM had campaigned on and actions they would have taken had they formed the government.

Claiming that there was a great deal of continuity and that government was not really breaking any new ground, merely using different language, he challenged PACT to detail what in the policy platform was actually new and not already started or promised by the PPM.

He said the government had adopted many of the Progressives’ policies and he was glad they had listened to the opposition. But in conflicting criticisms, he accused the new government of not setting out a clear vision but also of outlining an ambitious agenda that it would not be able to deliver.

McTaggart professed a very clear difference in policy and style between the promises of PACT and the actions of the PPM as he criticised their position on investment and the move away from trickle-down economics, but undermined his own point by claiming that an economy needed investment to grow, not just public spending.

The opposition leader also took aim at PACT for poorly managing the pandemic, maintaining that this current budget did not take into consideration the consequences of COVID-19. “It is not at all clear that this budget properly reflects the financial risks facing the government,” he said. “In the current circumstances the government should be managing its spending carefully… We all know COVID is not going away anytime soon.”

McTaggart said COVID was just one of several potential challenges ahead, including inflation, and warned that revenues could also fall. He said the opposition had many concerns about the budget and would be raising them in Finance Committee. He said the budget as a whole was not in the long term interests of the Cayman Islands and he regretted that fiscal prudence was no longer at the heart of the public finances.

Read McTaggart’s full address in the CNS Library.

Watch McTaggart deliver the opposition’s response to the Budget on CIGTV below:


Share your vote!


How do you feel after reading this?
  • Fascinated
  • Happy
  • Sad
  • Angry
  • Bored
  • Afraid
Print Friendly, PDF & Email

Tags: , , , ,

Category: Government Finance, Politics

Comments (49)

Trackback URL | Comments RSS Feed

  1. Anonymous says:

    Roy seems to know more than politicians all over the world.

  2. Anonymous says:

    Yeah, we complain about politicians all the time. But George Carlin had the right idea on who to blame. Please permit me to paraphrase and slightly modify part of his monologue on the subject:
    “Everybody complains about politicians. Everybody says they s_ck. Well, where do people think these politicians come from? They don’t fall out of the sky. They don’t pass through a membrane from some other reality.
    They come from Caymanian parents, Caymanian families, Caymanian homes, Caymanian schools, Caymanian churches, Caymanian businesses…and they’re elected by Caymanian citizens.
    This is the best we can do, folks. This is what we have to offer. It’s what our system produces. Garbage in…garbage out.
    If you have selfish, ignorant citizens…you’re gunna get selfish, ignorant leaders.”

  3. Anonymous says:

    roy is correct but what was is his plan?
    he did nothing to curb spending when in power and left govuernment broke when he left office….same as ppm did 2008.
    i have been here 20 years and have not seen government bring in any real fiscal measures and no one ever has attempted to control cig spending….
    recipe for disaster.

    • Anonymous says:

      Beware the jargon. For years the government crowed about a supposed surplus. What most don’t appreciate is that the “surplus” excludes three huge expenses.

      Capital expenditure (roads and buildings).
      Interest on debt
      Changes in unfunded liabilities (CS health and pension).

      Include those three things and what looks like a healthy surplus looks a lot like a fiscal crisis waiting to happen.

    • Anonymous says:

      Debt especially at these rates can be a useful econmic tool to smooth unusual economic dips.

  4. Anonymous says:

    If PACT had scrapped all the good initiatives that were in the pipeline, the PPM would have accused them of being intransigent and not acting in the people’s best interest. You know what, McTaggart: I DO NOT CARE who carries out a good initiative; if it will benefit us, just get on with it. It is the people who will pay for it — not yourself or the PPM Party. Your politricks might get some riled up, but I can see you coming a mile off.

  5. Anonymous says:

    Of course, borrowing is an easy choice compared to cutting the fat out of the CS and selling off or closing down quangos and decrepit boondoggles like CTC & CAL run by their BFFs.
    Austerity requires sacrifice not rewards, and for all politicians to gain any respect at all during these times they need to lead by example and sacrifice 20% of their gravy. But instead in true pirate fashion they come back for extra helpings by raiding and squandering public funds.
    Speaking of raises, I suspect duty rates will be getting a raise next year too.

  6. Anonymous says:

    Borrowed from whom?

    Just digits on a U.K. government ledger

  7. Anonymous says:

    Can you idiots give the current government a chance to prove themselves?

    Apparently, we magically had such a surplus during the last fiscal year that $60 million of stipends for work permit holders and $2k monthly vouchers for voter bribery were not even adequately budgeted for. Give me a break……

    PACT has barely been in for 8 months and have already done more for ALL Caymanians than what PPM/Unity/Alliance could barely scrape together in 8 long, unfettered years for some.

    Sadly even worse, PPM supporters continue to act like brainwashed cult members foaming at the mouth that still haven’t woken up yet. Even Jim Jones and Jeffrey Epstein eventually gave it up. Come on, critical thinking is actually required here.

    • Anonymous says:

      lmao

    • Anonymous says:

      Let me guess – you buy the Koolaid by the container load rather than quarts.

    • Anonymous says:

      I have given them a chance to prove themselves. In 8 short months they have demonstrated that a fitting synonym for PACT is “Clown Car”

    • Anonymous says:

      Your joking right? We just don’t have till Jan 2025 for them to actually start thinking, let alone critically. So let’s just say it’s critical that they start thinking now. And once these clowns are out it’ll be most likely another bunch in and they’ll probably want to reinvent the wheel again. They’re on the clock and we’re paying for their fiddling get it?

  8. Anonymous says:

    Do you know what Roy, I’m happy taking on honest debt for infrastructure etc. and working through it as opposed to the PPM skool of thought, being indebted to Dart and leveraged by it for favours, – but hey, you might be right, let’s ask those who are still holding empty flasks waiting for the trickle down economics from the multiple concession granted projects to empower them. 🤷🏻‍♀️

  9. Anonymous says:

    How about some austerity measures like reversing wage increase of MLA’s and ending Loser Bonuses for x-MLA’s?

  10. Anonymous says:

    Roy’s the same guy who said our government pension is in a surplus if you just ignore liabilities for future benefits. Almost every statement of his is like a comedy skit.

  11. Anonymous says:

    Hey, Moses seems very focused after experiencing, up close, “Hon.” Kenneth become the face of Cayman Islands Tourism!

    Relax Mose…I’m not sure he can represent either but at least you and him have one thing in common – apart from the tourism thing!

  12. Anonymous says:

    PPM to the rescue! Please honorable Roy & honorable Alden, seize control before it is to late, get your big backers to swing things for your takeover.

    • Anonymous says:

      Are you suggesting a coup?

      • Anonymous says:

        Remember when KeeKee persuaded a couple of government side members to turn on Kurt and take control of government back in 2001, I think that is the realignment that is being suggested.

        • Anonymous says:

          Careful of any “coup”, it could backfire. In any event, Wayne better be careful of an internal “realignment”, facilitated by the same KeeKee.

          General Flynn

  13. Elvis says:

    Just sot down man and start getting behind each other for gods sake

  14. Anonymous says:

    Ppm will spend it in favor of the rich…go pact go…lol…i honestly dont care anymore

    • Beaumont Zodecloun says:

      Since government can combine in any manner — even contrary to the platform of the MP before election — the privilege of voting does seem to have lost its shine.

      I hope we all come into our own with the power of Referendum. The value and strength of it is not even yet scratched. We could have SO much influence with just a little organisation.

    • Anonymous says:

      7.42 Remember that even the Good Samaritan would have been useless, had he not been rich.

  15. Anonymous says:

    You know you may not like Roy as a politician but he makes a point here. We should not be borrowing to find capital projects

    • Anonymous says:

      Still, he complimented PACT on a variety of issues. Unusual in these times. Thank you.

    • Anonymous says:

      Personally, I disagree with this sentiment. Borrowing is cheap right now and capital infrastructure projects can drive local growth. This isn’t to say to spend wantonly, as projects should be carefully selected to generate the most public benefits, but there is a lot of opportunity here that Roy dismisses out of broad principle. That being said, I’m not convinced there is a strong plan from PACT to utilize this emergency credit line prudently…

      • Anonymous says:

        Sure, borrowing is cheap if you have equity collateral, and prudent if there’s a bankable amortisation revenue stream, with ample buffer for interest coverage. We are already maxed out thanks to PPM, and facing a constricting financial sector zeitgeist. Our UK backstop, which allows us a huge break on interest expense, is predicated by there being a much bigger buffer.

    • Anonymous says:

      Yet Roy had a front row seat for the damage as it was set in motion, and was openly talking last year about borrowing substantially more. Now, we’re dealing with the predictable legacy flood damage from PPM policy. We can moan about PACT’s limited inability to notice and turn off those taps right away, but we should all be glad it didn’t take 4 years. Roy is the LA’s PAC Chair, did he blow the whistle on himself? No.

  16. Anonymous says:

    What would Roy cut from the budget?

    • Anonymous says:

      Why doesn’t he and his other PPM buddies all just give up their paycheck for all of 2022???
      Alden is sitting pretty anyway plus can always go out and do some QC work.

    • Anonymous says:

      Why doesn’t he start by cutting himself and give us all a break from his constant whinging! Take old Alden with you and don’t let the door hit you both on your way out.

  17. Anonymous says:

    The takeaway:
    Chief Clown Car driver Panton in his budget address is proud to announce that he wants us to board the Clown Car and wants to take us with him on a nice long “progressive” journey, with prolonged side stops into government social programmes that further his political agenda. In his budget speech Panton somehow did not fully explain how he intended to pay for the gas for the Clown Car trip. Now we know: He intends to do what fellow political dunderheads in the USA do to finance their political pork: he intends to borrow to pay our way to Shangri-La. In round figures, how much is PACT’s journey of vanity going to cost us? Annually? In the long-term? Has the borrowing been analysed in terms of the risk imposed by continuing and possibly worsening waves of Covid? Or is Panton and his PACT minions do what they have been doing all along in regard to local Covid policy? They seem good at tapping along with a white cane and hoping not to go over the cliff. Probably crappy policy, but that’s the best we gonna get folks. We got the government we deserve, so smile and be happy. And take comfort: It’s not the fall that hurts (but hitting the bottom kinda smarts a bit).

    • watcher says:

      You don’t sound like any fun at all. I truly hope your life isn’t as dismal as your words.

      • Anonymous says:

        My life is lovely, thank you. Am I supposed to have any cares about fitting your definition of “fun”. Guess what? I don’t. If reading my critiques of the PACT Clown Car is not your idea of fun, tough…cope. It is still a lovely dey in mi yahd, Bobo.

    • Anonymous says:

      I recently asked 5 persons to name 3 things or achievements that the PACT government had accomplished this far… seriously, not a single person could and all jokingly said ‘let COVID-19 in’ … while shrugging their shoulders.
      This is a slippery slope we are on.

      • Anonymous says:

        Me! Me! Pick me.
        One. They ran on a platform to enact new legislation/policies that would bring health insurance rates down to a manageable level so that Caymanians would not retire without being able to afford health insurance and then become a burden on the government. Health insurance companies would no longer make millions in profit every year by cherry-picking coverage for the healthy only and leaving CINICO to pay for the rest.
        Two. They, especially Chris Sauders, were going to overhaul the private pension funds that limits withdrawals to around $1,200 per month, which is considerably less than the premium for any private health insurance plan in existence for anyone over the age of 60. It takes some very creative accounting to pay for utilities, groceries, medical libations, and a $4,000 private health insurance plan with a $1,200 income.
        Three. Although this was just a bonus for me since we all know they are honourable persons and honest to a fault, enacting the Parliamentary Code of Conduct.
        Not only have they done these things, they were completed with such alacrity you would think that they were voting themselves a pay raise instead.

  18. Anonymous says:

    Well PPM, you are not wrong, but you thought the thousands of poor from around the world that you imported were not going to cost millions we didn’t have, or wha? Especially given you facilitated the displacement of Caymanians in a permit and PR granting frenzy.

    • Gray Matter says:

      You better check your History Book… it was Mackiva Bush that did the handing out of Status.

  19. Big BOBO's east end brother. says:

    no $hit!

  20. Anonymous says:

    Finally the PPM are acting like a proper opposition and are starting to make sense!

    • Memories are short in Cayman - but not all of us forget says:

      If you think the PPM have been doing anything but playing games for the past 8 months then you are dumber than a bag of rocks

      The PPM are the ones who secured a line of credit on standby because they themselves anticipated that borrowing might well be necessary

      People in Cayman literally forget things as they happen

      Roy was LITERALLY the finance minister saying last year that borrowing might be necessary – and now the Roy and the PPM who were planning on borrowing are criticising the PACT gov for borrowing – https://www.caymancompass.com/2020/09/18/cayman-secures-330-4-million-in-emergency-line-of-credit/

      • Anonymous says:

        Spot on.

        Unfortunately, there are too many people that can add but can’t count.

        I’m honestly worried the ignorance may rub off. Guess social distancing has many applications.

      • Anonymous says:

        A fair comment, but look at the headlines for the line of credit and then ask yourself “where is the emergency”? If PACT thinks this is an emergency worthy of doling out huge sums to friends, family, and supporters, then God help us when another Ivan heads our way.

      • Anonymous says:

        Firstly I used the word “Finally” which would suggest to someone with a basic understanding of the English language that this is the first time the PPM are doing this.

        The article does state that the PPM secured this line of credit for emergency purposes. The point Roy is making (which I agree with) is that we do not need to dip into this line of credit.

        Maybe read the article and think for yourself for once.

  21. Anonymous says:

    The Finance Minister is playing smoke and mirrors with the public finances, don’t watch the profit and loss statement, watch the balance sheet of the central government and how much money is being shown as owed. That is the beauty of double entry accounting, it is harder to hide things from those who know where to look. Put on your accountant’s hat Roy, let’s see whose kung fu is better, yours or the finance minister. This should be good 😊

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.