A borrowing plan that is forecast to put the Cayman Islands Central Government Public Debt at just under $300 million by June 2008 drew both criticism and praise at the Legislative Assembly Friday.
‘With the amount of money they are borrowing, if we get in trouble, God help us,’ Leader of the Opposition McKeeva Bush said.
Education Minister Alden McLaughlin said a substantial portion of the money being borrowed in the upcoming budget year will be used to help pay for the construction of three new high schools and a new George Town elementary school.
‘When we proposed to borrow significant money for schools, I don’t believe that anyone other than the Leader of the Opposition…would complain about it,’ Mr. McLaughlin said.
Mr. McLaughlin pointed out that the high schools were part of Mr. Bush’s capital budget when he was the Leader of Government Business.
‘Signs that proclaimed new high schools in West Bay and Frank Sound are rotting,’ he said.
Mr. Bush said he was concerned that the $129.8 million in new borrowing for the 2007-08 budget would be unsustainable.
The Leader of the Opposition also said the borrowing of what he called unprecedented amounts of money would burden the Caymanian people for a long time to come.
‘Running huge debt burdens while shrinking our economy should be a clear demonstration to all that the PPM has very little, if any, understanding that progressive planning and sensible economic measures are essential to the future of our country and our people,’ Mr. Bush said.
‘Young people on this island are going to get world class facilities,’ Mr. McLaughlin said. ‘And I say to the detractors and the Leader of the Opposition who don’t believe this will happen…watch this space.’
Under the government’s capital expenditure plan, $35.5 million has been set aside for new school construction in the fiscal year which begins 1 July. Eighteen million will go toward the new Government Office Accommodation Project; $9 million will go to various road work; $3.8 million will be used on public sports venues; and $3 million will go to a new civic centre in Bodden Town.
The government is also planning to spend heavily on public safety. Two million is slated for a combined emergency response facility in Bodden Town; $1.8 million will go for a police helicopter; $1.6 million will help build a new marine base; the Cayman Islands Fire Service will get $1.5 million in new vehicles.
The Health Services Authority is also receiving $11.2 million to cover operating losses.
Financial Secretary Kenneth Jefferson has said that the borrowing plan is sustainable. He pointed out that Cayman’s bond ratings were recently raised by Moody’s Investors Service, and that conditions were conductive to future success of the economy. Mr. Jefferson also said the maximum borrowings for the current budget year and next year total $156.8 million, which he said is actually $12.7 million less than was forecast in government’s strategic policy statement.