We refer to the press reports and the Legislative Assembly proceedings on the recent 2007/2008 budget.
This is a spending budget (like UDP’s previous budgets) that is not prudent. Anyone can spend money but only smart people can make money.
Past governments paid for large parts of capital expenditure from surpluses rather than by loans. Government has not brought any new innovative ways for government to make money.
The 2007/2008 budget figures below are taken from part C. pages 309 to 335 of the Forecast Financial Statements for Government for the financial year ending 30 June 2008.
The budget speeches and debates talk about Government seeking to borrow $130 million in one year. This is not the full transparent picture, which this Government so often talks about.
Forty years of accumulated debt to the year 2000 when our Government (a team of independent legislators who always put the country first) went out of office, the debt was only $107.8 million. The Peoples Progressive Movement supported in part by the Leader of the Opposition propose to borrow more in one year ($130 million) than the total 40 year accumulated debt up to the year 2000 ($107.8 million).
Statutory authorities and subsidiaries debt will escalate to $158 million. We hope the public sees the new way to borrow is through statutory authorities, which started heavy borrowing in the year 2002 by the UDP Government and which is off the balance sheet of the core Government.
To be added to this is the unfunded pension liability of $180 million and total estimated public sector debt is $633million.
The statutory authority and subsidiary borrowings of $158 million are off balance sheet of the core Government yet we must remember that all of these authorities are Government’s responsibility. If they should fail to repay, it is Government that has a legal or moral responsibility to pick up the bill and pay.
The net surplus for 2007/2008 is only $17million and no surplus is forecast for the statutory authorities and subsidiaries. (We guess consolidated losses exceed surpluses).
How can Government service the large debt in a few years when the full borrowing is repayable?
Since PPM and UDP promote transparency and freedom of information they should be happy to answer to the public several questions.
1. How much is the forecasted debt over the next five years as this year is only the beginning of the large projects. Is it another $400 million in total?
2. Does Government have a five-year financial plan and can we please see it?
3. Will the repayments and securing of the entire public sector forecast borrowings of $486 million for 2007/8 exceed the prudent 10 per cent of recurrent revenue and by how much?
4. Where is the money coming from to repay the enormous debt of $453 million? Are there going to be further taxes on the people?
5. When is Government going to start repaying the unfunded pension liability of $180 million and by how much? Where is this money coming from, or is this going to be taken from loan money?
6. Are PPM and UDP going to make available to the public (in a transparent way and on a regular basis) the names of persons and companies who contribute to their parties’ or associated organizations year round and how much?
7. Some of the new projects are good but Cayman cannot afford to do all at one time. PPM must spend within Cayman’s means as this country is already saddled with too many loans.
We hope the United Kingdom considers the ramifications of these massive borrowings and large debt and instructs Government accordingly.
In summary, the political parties have increased the taxes last year by $23 million on the people and propose to increase the total Government Public Sector debt from $109 million in the year 2000 when the teams were running Government to $452 million of PPM and UDP Government debt.
Cayman has paid a $343 million price for the PPM and UDP parties in six short years.
Political parties have wrecked the other Caribbean Islands because of their near absolute power and Cayman may be the same if the parties advance the constitution to grab more power. There are few independent views in the Legislature – mainly the parties’ views, which may be heavily influenced by party members who are not elected legislators and whom the electorate has never voted in as representatives.
Our children’s future has been and is being mortgaged by the PPM and UDP governments. We must protect our children’s future now.
This country needs good, strong independent leadership, if there is to be any hope for our children’s future.