Financial Secretary slammed

Opposition Leader Kurt Tibbetts has verbally hammered Cayman’s finance chief in a strongly worded statement that questioned whether projections of a CI$74 million operating deficit in the country’s budget were real.

Mr. Tibbetts

Mr. Tibbetts

‘No amount of incompetence could possibly have led to projections, which were so hopelessly off,’ Mr. Tibbetts said in a four-page statement released Tuesday. ‘There must be another explanation. It is inconceivable that the financial secretary has suddenly discovered that the advice and information, which he consistently provided to Cabinet over the course of the past year,…was completely wrong.

‘Either the (People’s Progressive Movement) Cabinet was completely misled by the financial secretary or the true position is now being misrepresented.’

Leader of Government Business McKeeva Bush announced on 12 June that the country’s operating deficit had ballooned to $74 million, almost tripling March estimates of a $29 million dollar gap.

In that statement Mr. Bush also said that the Cayman Islands had minimal cash balances of $17 million, and a record public debt of $590 million.

Speaking with the Caymanian Compass the next day, 13 June, Financial Secretary Ken Jefferson confirmed the figures that were in Mr. Bush’s statement.

Mr. Jefferson said there had been a major drop in government revenues and a big increase in expenses between March and June.

Revenue projections for the 2008/09 budget year, which ends on 30 June, fell from an estimated $507 million to $490 million, Mr. Jefferson said. Expense estimates increased during that same time from $496 million to $513 million.

The combined $34 million turnaround in revenues and expenses made up most of the $45 million increase in government’s operating deficit.

An additional $9 million projected losses in statutory authorities and government companies, such as the Turtle Farm and the Health Services Authority, accounted for a large chunk of the projected deficit as well, Mr. Jefferson said.

In an e-mail sent to the Compass Mr. Jefferson indicating he would make a further statement about the country’s finances when he returned to the Islands Friday.

‘This would have been done earlier, but (I’ve) been off Island since 13 June on official business of the government,’ Mr. Jefferson wrote.

Opposition party members who made up the Cabinet of the previous government said they had no clue where the $17 million increase in expenses during the last few months of the fiscal year had come from.

They indicated that, as late as 5 May, Mr. Jefferson confirmed previous projections of a $29 million operating deficit for the current budget year and estimates of a $126 million cash balance as of 30 June were on track.

Mr. Jefferson said he made those statements to Cabinet based on revenue and expense figures collected from February and March and that he received more updated information by the time the newly-elected government had assumed power.

Opposition party member Alden McLaughlin said last week that there may have been some confusion over the $17 million ‘cash balance’ figure reported in Mr. Bush’s statement.

Mr. Jefferson indicated to the Compass that $17 million was indeed the projected figure for available cash as of 12 June, but he also noted that the country had a restricted $74 million cash balance that could be accessed only by a vote of the Legislative Assembly. Combining those figures would leave the country with a $91 million overall cash balance.

Opposition members also questioned Mr. Jefferson on whether any of the $154 million approved in government borrowing had actually been ‘drawn down’ – used – in the current 2008/09 budget year.

‘What will be the impact on the government’s finances if the entire loan amount is not drawn down in the current (2008.09) fiscal year?’ Mr. Tibbetts asked in his statement.

‘I call on the financial secretary to publicly answer the questions I have posed in this statement and to convene a meeting of finance committee immediately so that these important issues…can be ventilated and the true state of the government’s finances can be made known,’ Mr. Tibbetts said.

The newly-elected Legislative Assembly is scheduled to convene its first business meeting Friday at 10am.

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