Today’s Editorial for May 15: Deficit spending

Something that newly-appointed Cayman Islands Chief Secretary Donovan Ebanks said this week struck a chord with us.

‘We all know what the economic situation is,’ said Mr. Ebanks, who will take up his new position on 1 July. ‘It’s a different economic environment than we’ve been accustomed to. Certainly it’s a question of what we’ve been doing and what we’re going to be able to do.’

We’ve heard a lot in the past year or so about difficult financial times ahead and the need for individuals, families and businesses here in the Cayman Islands to act accordingly. We’ve heard a lot from lawmakers on both sides of the political aisle lecturing people on the need to get their financial houses in order.

These are the same people who ran up a $29 million dollar operating deficit in the current budget.

Now, lest one political party or another think we’re laying blame, let’s be clear. There were certainly many, many unanticipated expenditures in the last 12 months and for most of them, neither the ruling government nor the opposition had any control.

Hurricane damage must be repaired; UK-ordered criminal probes must be financed, Caymanian children must be educated.

But the time has come for hard decisions.

A crucial job of the next government, whoever is fortunate enough to receive the public’s vote of confidence next Wednesday, is to get this country’s financial house in order.

It cannot, or rather should not, be done by borrowing more money. The ruling government will have to decide between cutting spending and raising revenue.

There are major issues to be addressed: The financial health of Cayman’s public pension system; the environmental health of the Islands – including the ever growing problem of the George Town Landfill; the completion of Cayman’s three new high schools; rebuilding a depleted and demoralised police force; and the precipitous drop in revenues from the tourism and financial industries.

The government cannot assist in any of these matters unless it has the financial capacity and human resources to do so.

We realise, despite certain claims to the contrary, that the government is not out of money. However, if we continue down the path of deficit spending until things get better, we may soon arrive at just that situation.

It would be irresponsible of any government not to make balancing this operational deficit and proposing a realistic, workable spending plan for the upcoming year a top priority.

Although he is not an elected official, Mr. Ebanks is likely to have at least some say in the matter come 1 July, and we are encouraged by his comments this week.

We can only hope that the government’s elected leaders are of the same mindset.