A common sense budget providing for $367 million in operating expenditure and a further $80 million of investing or capital expenditure was introduced to the House by Financial Secretary Kenneth Jefferson yesterday.
Mr. Jefferson said $36.5 million had been allocated to supporting the hurricane recovery effort and that related to about 8.5 per cent of total government revenue forecast for 2005/06.
Another priority area was funding the fight against crime, with an additional $4.75 million provided for police outputs, together with $3.9 million for new police equipment.
Planned expenditure on strengthening families and the community, and on education totalled $190.6 million, Mr. Jefferson told the House.
Nearly $15 million was to begin the construction of three new high schools, a new primary school and other school facilities on Grand Cayman and Cayman Brac, he said.
The budget allocated $9.6 million for road related projects and made provision for a $12 million equity injection into the Health Services Authority, he added.
The forecast operating result of the government for the year was a surplus before extraordinary items of $3.3 million, said Mr. Jefferson.
The revenue forecasts included an additional $1.5 million in respect of mutual fund fee increases, which reflected a fee increase of $500 in respect of certain categories of fees, he said.
The extra revenue was being used to fund additional output payments to the Monetary Authority.
”This budgeting approach is consistent with the government’s pledge to use only new revenue measures to fund new or increased services,’ he said.
‘This is the last year Hurricane Ivan related extraordinary expenses are anticipated, which is why the surplus before extraordinary items is the best measure of the underlying operating activity of the government,’ Mr. Jefferson told the Legislative Assembly.
At 30 June 2006, the balance owed in respect of existing borrowings was expected to be $211.4 million, which included $63 million of proposed new borrowing, he said.
‘The use of $27.1 million of existing cash to help finance planned capital expenditures, reduces the government’s borrowing requirement and therefore reduces its interest expense and future debt repayment obligations,’ said Mr. Jefferson.
The use of the cash did not however jeopardise the cash reserves position, he said.
The forecasts showed that the level of cash holdings at the end of 2005/06 would be at a level equal to 76 days of expenditure, he added.
‘No new external finance sources have been included in the 2005/6 budget but work to explore such options is under way and will be incorporated in future years’ budgets,’ said Mr. Jefferson.
The House was adjourned until tomorrow although debate on the Throne Speech and Budget Address was adjourned until 17 October.
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