CIG targets $1/4 billion surplus over term
(CNS): Government is expecting to generate operating surpluses during this current administration that will exceed a quarter of a billion dollars. The new finance minister, Roy McTaggart, who moved from the backbenches to fill the shoes of his former colleague, Marco Archer, told the Legislative Assembly and the listening public that the national unity government will not be raising any new taxes. He also said that with the exception of refinancing half of the 2009 government bond which comes due in November next year, there will be no new borrowing. There will, however, be some new spending on police and security, education, welfare, health cover, infrastructure projects and revamping immigration, among other things.
Government will finance its near $640 million annual spending plans over the next three years with existing revenue through improved collection, McTaggart said, as he presented the policy document to the House. Before the premier took to the floor to deliver the presentation outlining the details of the new government’s policy aims and priorities, McTaggart outlined the broad fiscal situation the government is forecasting for the life of this term.
He said the government’s medium-term fiscal strategy was based on achieving substantial operating surpluses, no new fees or taxes on the public and no more new debt. Operating surpluses, the minister said, would be central to government policy as it will finance its capital investment programme and help build reserves.
McTaggart said government will focus efforts on maximising collection of fees with better and more e-payment systems as well as improved enforcement efforts, alleviating the need for more fees to pay for the increases in public spending. The forthcoming budget is predicted to see core government spending exceed $636 million, with a hike to more than $640 million in 2019 and a slight fallback to just under $640 million in 2020. Revenue is expected to reach $717.9 million next year, fall to $694.4 million in 2019 and then reach a whopping $730.2 million in 2020.
McTaggart outlined the priority areas where government will be spending more. He said government will be increasing spending on policing and public safety, the rehabilitation of prisoners, the implementation of an enhanced transparent work permit system, more support for the financial services industry and enhanced tourism marketing to high value markets. McTaggart also said money would be invested in public education services for students with special needs and teaching science, as well as increased funding for scholarships, and on welfare for all the elderly including seamen, veterans, the disabled, those receiving poor relief payments and retired civil servants. Cayman Islands National Insurance Company will also be sucking up more spending to tackle the mounting problem. Government will also be investing in the planned waste management system and putting more funds into mosquito control.
Meanwhile, over the next three years, government will be injecting over $300 million in capital projects including the completion of John Gray High School, the expansion of the airport, the landfill, a residential mental health facility and upgrades to the road network.
Category: Economy, Government Finance, Politics
ok. lets get this straight? we employing roughly 30,000 foregners. of the 21k caymanians, half on social services…
oh please dont tax the working class anymore? we caymanians are stressed enough just paying a consumption tax?
That is positive news Roy.
However, now is the time to save for the next raining day, and there will be one, by transferring a large portion of this anticipated surplus to a reserve fund. This idea of having cash on hand to cover expenses for 90/100 days is all well and good when there is lots of income but when that dries up during some world wide crisis we do not have any reserves to fall back upon.
Such a fund should be under the control of the financial section Government and only used in the event of a financial crisis and not to stroke egos or develop vote buying schemes.
Had previous governments indulged in such a practice over the past forty years we could have had a sizeable fund built up by this time.
A good example of this type of financial management is the the new Airport facility. Over the years they separated the tax that was designated for future development and now have the funds available for the expansion without excessive borrowing.
That did not happen in a day but if Government were to set a goal of building a reserve of about one billion dollars over he next twenty five to thirty years they would be credited with having good financial management sense.
Think about how much we could have now if Jim Bodden and his government had put funds aside in the days when the money was flowing in here like it would never stop.
Mac would have spent it on the good life private jets and 5 star hotels for him and his hangers on.
But… the Auditor General has a different opinion about these numbers.
It’s not how much ya got, it’s what you do wi it that counts.
Thats what she said
ppm decoded: we will continue to do nothing of note….
surplus built off taxing expats and business’s to the max….
what about cutting taxes and reducing the civil service…
Reducing civil servants means more stress on social services. Dummy.
They need to do more work with the same amount of people.
But if we stop importing poverty, including significant numbers of dependents of certain civil servants who are not able to fully support them and rely on free medical, education, and other support from the CIG (that we all pay for), train Caymanians and establish real prospects of upward mobility for them, the stress on social services will in fact decrease!
Only if you don’t train those people to do something else. Lets face it, the CS is a jobs program. I know nowhere else where such a high percentage of the local population is employed by the government in such a small island. We need to train people and wean them off this never ending vicious circle…it will backfire when the money stops.
read miller-shaw or e&y reports….
I did. They were junk.
I did. I dare you to come on here and try to explain the tourism graph in the MS Report.
In the relevant section on employment the SPS reads:
Employment2
: The robust growth of the domestic economy spurred an
increase in demand for labour as total employment improved by 3.2% from
a year ago and reached 40,411 in 2016. The wholesale and retail trade
industry remained the top employer among all industries, followed by
construction. With the growth in labor demand almost at pace with the
growth in labour supply, the overall unemployment rate was stable at 4.2%
in 2016.
The total labor force strengthened to 42,196 in 2016, an expansion of 3.2%
over the previous year. The increase in supply emanated from both local and
foreign markets. The former was made up of the Caymanian labour force
and Permanent Residents (with rights to work); these together comprised
24,508 persons or 58.1% of the total labour force. The Non-Caymanian
labour force, which includes persons married to Caymanians and awaiting
Permanent Residence and persons working by operation of law, was
estimated at 17,688 or 41.9% of the total labour force.
We know that there are 24,880 persons on work permits, seemingly not including Permanent residents or Spouses of Caymanians. The total number of non Caymanians working here is likely close to 28,000 (if you add them). How is government suddenly claiming there are only 17,688 foreign nationals working here, and counting all Permanent Residents as not being part of the non-Caymanian workforce even though Permanent Residents are not Caymanian?
If there are 42,196 in the Labor Force and 4.2% unemployment that means there are 1,772 unemployed. That leaves 40,424 actually working. If we take away the 24,880 on work permits we are left with 15,544 working Caymanians and Permanent Residents and spouses of Caymanians. Take off the non-Caymanians and it looks like there are about 12,500 Caymanians working here – or about 31% (less than a third) of all workers.
That appears very different from the apparent suggestion that the Caymanian Labor Force is more than 58%.
Put another way, it seems that for every Caymanian working in Cayman, more than two foreign nationals have jobs. That is not necessarily a bad thing, but seems to be very different from what is suggested.
CNS – what are we supposed to make of these numbers? Do they change based on who is asking and why? Anyone able to explain? Did 7,192 current work permit holders just disappear?
Wow are they expectimg a new local industry of some sorts to save the economy?
Finance is falling globally and Tourism will dwindle also, especially with street- professional level crime being rampant everywhere.
Well unless…we have a boom of 2.5million for the cruise terminal…
Any steps will be taken by the Gov before 2019?
We need “budget surpluses” of these dimensions to retire the sizeable corporate debt issue that comes due in just two years. Specifically: HSBC’s $312,000,000 Government of the Cayman Islands 10 year notes at 5.950% due 24NOV19. There is no “extra” or “new found” money to spend. The FCO won’t allow the Cayman Islands Government to service any more debt than already outstanding.
It looks like Roy McTaggart is following the footsteps of his former colleague, Marco Archer …
I just hope the monies generated, reflects positively on local small businesses and job creation ?
Smoke and Mirrors….You made me Promises, Promises..
A political pipe dream is how the SPS highlights can best be described.
The bread and butter of the economy FSI is under serious attack and the revenue from it will decrease as Cayman is forced to diversify its economy by the U.K.
Good ol record breaking work permit fees…why didn’t other administrations before Alden realize issuing work permits to whomever can pay would result in a surplus..they all must have been really stupid and Alden, Marco, and now Roy are like mensa smart or something.
I hope they will not be giving extra money to retired civil servants on low pensions who were formerly expatriate officers collecting contracted officers supplement until they were given status in 2003 and became eligible to collect a small pension on retirement. All the years they were given contracted officers supplement they were supposed to be putting some of it aside for their retirement but most spent it as they got it on extravagant lifestyle and some are now crying to Government about “not having a proper pension”. Be careful, Roy. There are indeed some deserving Caymanians who for one reason or another could not earn enough for a decent pension but these former expat people are not deserving of any extra funds. They got theirs already.
Well done. Keep up the good work PPM
This is crazy. What the hell do they think they are doing acting so responsible?
so 250 million… Why the hyperbole?
Great, more money for them to spend on paying their criminally-charged employees to stay at home.