The government motion for approval of the Strategic Policy Statement (SPS) for 2005/06 was passed in the House Monday.
The SPS contains economic forecasts, policy priorities and aggregate financial targets as the country prepares for budget day in early October.
Financial Secretary Kenneth Jefferson said the Hurricane Ivan driven growth in inflation was reflected in the statistics for this year.
‘Consumer inflation for the month of March 2005 was 11.1 per cent higher than March last year.
‘This inflationary pressure is expected to work its way through the system during the remainder of the year as the demand pressures created by the restoration process cease,’ he told the House.
But overall, statistics also showed that the Cayman Islands economy had shown remarkable resilience following the devastating impact of the hurricane, said Mr. Jefferson.
The economy was forecast to grow by 5.4 per cent in 2005/06, 3.7 per cent in 2006/07 and 3 per cent in 2007/08, he said.
Significant effort had been put in to ensure that the aggregate financial targets were ‘robust, comprehensive, achievable and sustainable,’ he told the House.
‘In relation to the operating allocations, the aggregate financial targets establish the total operating expenses for the year. For 2005/06 this equals $368.196 million plus an additional $13.943 million making a total of $382.139 million,’ said Mr. Jefferson.
‘This target is for what is called ‘the core government.’ Core government operating expenses are made up of two broad categories,’ he explained.
‘The first is expenses incurred by ministries and which are funded by revenue earned by those entities from sources other than Cabinet. The target for these externally funded entity expenses is $22.695 million in 2005/06,’ he said.
‘The second are what are called executive expenses. Executive expenses are the portion of core government expenses that are controlled directly by Cabinet and which are funded by coercive revenue.
‘They are the expenses incurred by the Cabinet in purchasing outputs from ministries, portfolios, statutory authorities, government companies and non-governmental output suppliers, and funding transfer payments and various other miscellaneous items.
‘The target for executive expenses is $380.338 million in 2005/06. This is the amount allocated to individual Ministers and Official Members,’ he said.
Opposition Leader McKeeva Bush said the statement contained things that his side had been on the way to doing and had campaigned to do.
The country recognised the things had to be done and it was laudable to want to do them but he wondered where the money would come from.
Further contributions in the debate came from MLAs Rolston Anglin and Cline Glidden before the motion was approved with eight votes in favour and what was recorded as four abstentions on the Opposition side.
The House was adjourned until 29 August.