PACT took ‘heat’ for social spending, Panton says
(CNS): Premier Wayne Panton has admitted that the PACT Government “took heat” from both sides of the political landscape for using public cash to help people navigate the cost of living crisis. While overspending will put the economy and the country’s fiscal independence at risk, tough decisions have had to be made to help people through this period of global inflation, he said.
During his latest public address to the country, which was delivered at the annual Chamber of Commerce Legislative Luncheon last week, Panton said the government had helped address the cost of living crisis by introducing a number of initiatives, such as free school meals and subsidising light bills. But he warned that public spending will need to be managed in future because public expenses are outpacing the growth in revenue.
“To help see our families through these tough times, we’ve taken a lot of political heat,” he said. “Those to our political right worry that we’re going too far and that irresponsible social spending will only further the sense of entitlement, and that this fiscal irresponsibility will put our fragile economy at risk. And those to our political left say that we are not going far enough with our social spending, that we should provide more assistance to more people and for a longer period of time.”
He said it was important to find balance neither too far to the left nor to the right. “Governments should not be prone to extremes. Our leadership needs to be pragmatic, future-focused and capable of balancing the competing interests while maintaining fiscal prudence.” He said that PACT was achieving this.
The premier said it was remarkable that the government had maintained a balanced budget with a significant surplus over the last couple of years, given that this was in the wake of the pandemic and during global turmoil.
While public spending is increasing, operating revenues have grown steadily from $862 million in 2019 to $1.02 billion. For the first five months of 2023, operating revenues amounted to $589 million, which is already more than half of the projected total of 2023 revenues, which is $1.03 billion. During the same five months, the government has spent around $415 million, so is still on track for another surplus.
However, as expenses are increasing at a faster pace than revenues, this unsustainable position will need to be addressed in future.
As well as an increase in social welfare spending, the government is facing a growing bill for the civil service, where the headcount has increased from 3,918 in 2018 to 4,511 by the end of May 2023, an increase of 15% in five years. With that in mind, the government is currently working on the 2024/25 budget, which will be presented in late October, he said.
“But the process to get there will involve hard decisions as it is expected that expenditure requests will not be met by existing revenue projections,” he warned.
While the rest of the Caribbean is largely characterised by volatility in growth, high unemployment and disappointing human development indicators, Cayman has consistently shown strong and stable positive growth. “International business is thriving,” Panton said. “Hotels are full again; shops and restaurants are bustling; and jobs are available up and down the economic ladder.”
Based on the first five months of this year, the government is optimistic about its overall performance for 2023. However, given the trend, costs will have to be diligently monitored over the rest of the year and the SPS period of 2024-2026, Panton said.
The unaudited results for January to May 2023 show a $174 million surplus, with $557 million of coercive revenue already collected. This is around $7 million more than during the same period last year and included $10 million more than expected through tourism revenues.
Nevertheless, tourism remains a very small contributor to the government’s overall revenue, in light of the investment and support given to this sector. And while the government had little choice but to support workers in the tourism sector whose income stopped during the pandemic, this stipend generated much of the criticism relating to welfare costs.
Tourism-related revenue is low on the list of the main sources of government income (See graphic below). Most public revenue comes from financial services, imports and stamp duty. Work permits and other immigration-related fees are also now outpacing tourism sector revenues.
Well over 40% of the government’s annual direct revenue comes from financial services which the premier said is “critical to our prosperity”. So far this year, the government has also taken in $6 million more than expected in work permit fees, as the number of expatriates working here steadily increases.
- Fascinated
- Happy
- Sad
- Angry
- Bored
- Afraid
Category: Government Finance, Politics
Tropicana orange juice at Walmart 3.99 us.
Here 6.99 ci.
That explains the high cost of living .
Absolutely insane governmental management of our tax money and out collective future.
The political and bureaucratic class sacrificing the island for short term gains.
The Civil Service should be shrinking in size to reduce governmental expenditure. Concurrently they should be reducing duties on imports specifically groceries products.
People always cursing civil servants but they have mortgages too and experiencing the same hike in bank interest rates and they are not allowed to touch their pension so who is helping them?
People always talking about civil servants get fee healthcare and pension, I don’t know how some of them survive. They are making less than $2,500 and have mortgages and CUC to pay so thank God they didn’t have to pay healthcare and pension too.
Do you want to know what the difference is?
I will tell you, it is the whole countries tax dollars they are using. Additionally your government pension is funded by all of us is still flush.
We us our own money. You are welcome free rider
go read miller shaw and e&y reports!
how many recommendations have been implemented???
Perhaps cut education funding by 33% over the next three years. Just give all Caymanian parents vouchers and voila. Better education and more accountability. But wait, less government is a threat to our corrupt bloated beauracracy so it won’t happen.
PACT will go down in history as the worst government ever. Every word out of their mouths is campaigning.
Cutting down on those who are self responsible and contribute to society while the numbers of irresponsible welfare intitled Caymanians grow substantialy is going to be the biggest issue soon. How to cut back on the intitled ones? If it can not be done with intelligent thought then it will take care of itself by putting Cayman into so much debt (which is already huge) that it goes bankrupt and is taken over by those who own the debt. In other words Cayman Islands future will not belong to Caymanians anymore and everyone will get what they all deserve.
Entitled.
The only heat in Wayne’s kitchen is that cooked up by his loyal cabinet ministers, Kenny and Jay, who do whatever they like irrespective of government policy, whilst Wayne tries to pretend it’s not happening.
We all need to tighten our belts starting with the Prem, Chris, John John, Ju Ju, Jay, Sebrina, in fact all the trough feeders.
No wonder groceries are so expensive!
Less lunching and more doing please.
Hon Premier what about a new hospital. Why are patients in corridors awaiting beds?
How many hospitals do we need?
I pray one is not in any serious accident as we only have one A&E facility (at HSA). For a population of around 90K we do not have sufficient beds in surgical and medical ward. The HSA hospital was built for a population of less than 30K.
If you have no insurance …HSA will not deny emergency services. Not sure we can say same for private entities who will find an excuse to refer you to HSA’s A&E.
So issuing more work permits without looking at healthcare infrastructure is madness.
The average number of beds per 1,000 people in OECD EU nations is 5. For a population of 100,000 in Cayman that would be 500 beds.
19.
Could it be because the hospitals are still waiting for payment from too many intitled Camacians? Honest question.
Too many people needing care?
“As well as an increase in social welfare spending, the government is facing a growing bill for the civil service, where the headcount has increased from 3,918 in 2018 to 4,511 by the end of May 2023, an increase of 15% in five years. With that in mind, the government is currently working on the 2024/25 budget, which will be presented in late October, he said.”
The CIG affirmative action job program is working as planned!
Does the budget include $100,000,000 for a new prison..?
Ridiculous if that is really going to happen..
When criminals were sent to Jamaica, prison was so unpleasant, they were all afraid of being jailed.
Northward functions well as a place of punishment, and good enough.
brought to you by the same clowns who built the high schools? Hard pass.
Remove import duty to supermarkets. Make them pass it on to consumers. Small hit overall, but will mean people can feed their families.
20 – 22% is not a “small hit” it’s quite substantial.
Oh wait, can’t do that or they’ll have no money to pay for Regen. That said the import revenue money might still be squandered on vote buying anyway.
It’s a lot more than 22% when you factor in waste and spoilage. Tax in advance with no write offs is a huge hit to supermarkets.
Small hit to them, meaning, they will only lose the 22% on food. Personal imports and things like cars make up the majority of the duty.
You need more supply and less demand to lower prices. Any price fixing typically leads to shortages. Without competition (more supply) the stores wont lower prices, because demand (population) has been increasing since the 1950s.
You had one job and still have yet to prove effective at it, that is to put Cayman back on the rails towards sustainable development. Stop the political slagging and whining about having to fork out for an emergency. The opposition party would I hope have done the same. This is not a time for blaming or crying, do your damn job man!
And just maybe, If you put a stop to the thuggery in your Cabinet average Caymanians and expats alike might just stand a chance at having a future here. Quit telling us that you’re actually doing something other than bolstering the gravy train of your corrupt cohorts and implementing more handout initiatives without basis.
You clearly don’t want to tackle the root of the problem, unrestrained development, Planning run amuck, regulatory board disfunction and lastly no serious local accredited education for school leavers to take on trades and service jobs. I don’t see you building any trade, service or technical schools yet you complain about the need for work permits to fill these jobs.
Just actually where does all the revenue from permits go exactly? Certainly not to fund the rehab of government work permit addiction. And more policing is not the long term solution to crime, provide young people something to do other than steal to make a living.
All those users on permits who refused to go back home during covid and we supported them should not be renewed but send them off on rollover!!
Seem to recall the stipend was restricted to Caymanians. Not sure what support you are referring to, or how you expected expats to “go home” when travel was restricted.
tax and spend.its what you do when you have no plan.
“Social spending”. AKA – Vote Buying.
The fulfillment of a welfare state continues.
Just look how much is collected in duty on imports. The government is taking this money from our pockets, causing everything to be so expensive, and wasting it on overspending in unneccessary places. Wasting it on civil servants who and seriously underperforming, wasting it on giving free money to people who should be in work, wasting it on medical bills for people who should have insurance but don’t bother paying knowing the government will pocket the bill. Wasting it on ‘grants’ and handouts – two of my neighbors recently had new roofs paid for by the government – but why? They are in working households, why should the government pay for a new roof? To buy their vote?
Wasting it on stupid tourist initiatives such as those silly handbags and third rate British rugby teams. Waste, waste, waste and all the while the money to pay for it comes out of our pockets. Tax-free island? I don’t think so. Just stealth taxes that hit the poor people harder than the rich.
You want to be taxed to death as in the U.S. and UK?
Agree with you that Civil Service will always fare better than the rest of us. I have been around the world quite a bit. Nowhere else can I recall where the government employees were greater than the civilians. It all seems a tad top heavy sometimes. I’m okay with it mostly, but find it hard to tolerate when CIG/Civil Service employees complain about their financial difficulties; you should have to walk in my shoes, live within my health insurance for a while. It would be enlightening to you.
Some of us who aren’t yet a part of NAU are struggling hard just to make basic ends meet. EVERY month. It is relentless. I am one car breakdown away from ruin.
Blessed to live here. If my health holds out, I stand a chance of holding my own to feed, clothe and educate my children.
You of the CIG, you don’t know our problems. You are privileged, and we put you there, God help us. It has been so long since you were children, you can’t remember what it was like to struggle, so you endorse the trickle-down economy and put your energies behind big foreign developments and your boutique hotels. Well, that doesn’t do anything for us. Not a thing. That will only cause more expat hospitality work permits.
You are ALL failing us. You should all be forced to live the way we do. THEN you would make positive changes.
The civil servants don’t decide on these crazy trickle-down economy ideas: the politicians do. The civil servants are just there to do their bidding.
Civil Service voting block pulls the strings. They decide what gets pushed through and what doesn’t. But you know that already.
bullshit.
At least if there was income tax then people would be taxed accordingly to their income which is more fair than the current situation. For example a person earning $100k per month verses the person earning $3k per month. They both pay the same price for staple foods but when it comes to their carbon foot print, the guy with the salary of$100k per month has the big house, the big boat, 4 cars, 2 motorcycles, 2 wives and multiple side chicks which all places a strain on our natural resources, something has to give because poor people should not have to pay for the rich.