Opposition government members said Thursday that several statements made last week by Leader of Government Business McKeeva Bush were confusing or even misleading the public as to the true financial picture of the Cayman Islands.
‘It’s bad, no one’s saying that it isn’t,’ Opposition MLA Alden McLaughlin said. ‘But some of these figures don’t add up.’
Mr. McLaughlin said the People’s Progressive Movement party intended to release a more complete statement next week after thoroughly researching the matter.
For instance, Mr. McLaughlin pointed out that last week’s statement from the Leader of Government Business indicated government had ‘minimal cash balances’ of some CI$17 million to continue the daily operations of government.
However, that $17 million figure apparently refers to only the unrestricted cash balances available to government. There is a restricted cash balance of CI$74 million currently, according to Financial Secretary Ken Jefferson, but the government would need legislative approval before spending any of that money.
Putting the cash balance together with the restricted balances leaves government with a projected $91 million cash reserve projected by the end of the budget year on 30 June. Admittedly, Mr. McLaughlin said it is a far cry from the $126 million reserve projected earlier in the year.
Mr. Bush stated last week that the total cash reserve was still not within the accepted principles of responsible financial management that are required to be maintain in Cayman.
Mr. McLaughlin said the PPM opposition party would also question other areas of Mr. Bush’s statement where projected losses seemed to be inflated. The Health Services Authority operating loss for the 2008/09 budget year was projected at $12 million in the statement, but Mr. McLaughlin said that number is actually around $8 million.
‘We’ve got that straight from the top,’ he said, adding that further details would be released in the PPM statement, likely on Monday.
The George Town member of the Legislative Assembly and former Education Minister said he was surprised by the projected $74 million operating deficit reported by Mr. Bush last week. Mr. Jefferson confirmed the deficit figure in a telephone interview with the Caymanian Compass last weekend.
The increase in the operating deficit, that rose from a projected CI$29 million at the end of March, was largely due to a drop in revenues of some $17 million and an increase in expenses of another $17 million in the last quarter of the fiscal year, Mr. Jefferson said.
Operating losses among government-owned companies and statutory authorities like the Health Services Authority and Cayman Turtle Farm were also projected to increase by some $9 million by the end of the budget year on 30 June.
However, Mr. McLaughlin said, as of 31 March, 2009 the actual operating deficit government was carrying was said to be CI $18.8 million. Another CI $10 million was added to that figure to come up with the projected deficit figure of $29 million in March.
‘If we were at an $18 million actual operating deficit on 31 March, how did we get to a $74 million projected deficit a few months later?’ Mr. McLaughlin said. ‘Where does this additional $17 million in expenditure come from? I don’t know.’
Mr. McLaughlin questioned whether government needed any of the CI$140 million in proposed borrowing to cover expenses through 30 June.
‘That should not be,’ he said. ‘We left government with the ability to draw down CI $154 million for the 2008/09 budget year.’
Mr. Bush said the borrowing would have to be approved by the United Kingdom, since the previous government’s budget planning had left the country outside the principles of responsible financial management, and said some of the cash would be needed to keep paying civil servants.
‘The country is faced with enormous challenges,’ Mr. Bush said. ‘But the new government intends to operate with high standards of fiscal management.’