Emergency meeting called for Thursday
Cayman Islands government leaders have called an emergency financial crisis meeting of private business leaders and public sector administrators to be held Thursday at The Ritz-Carlton, Grand Cayman.
Leader of Government Business McKeeva Bush said the meeting was expected to start around 8.30am Thursday and run until about 10am. He said members of the press are welcomed to attend.
‘We’re having a most difficult time, even to pay salaries,’ Mr. Bush said. ‘The UK is not wanting to allow us to borrow more.’
The government was expecting to hear as early as Monday afternoon about whether Britain’s Foreign and Commonwealth Office would green-light further borrowing by Cayman’s government. The overseas territory’s financial position requires it to obtain commonwealth office approval before borrowing more.
The country is being forced to borrow tens of millions a month to pay government workers’ salaries, pensions and benefits.
An operating budget deficit of some $132 million has been projected by the end of the financial year on 30 June, 2010, if no spending reductions are made and additional revenue sources cannot be found. Cayman ended the previous year on 30 June, 2009 with an operating deficit of nearly $76 million.
Mr. Bush said he could not understate the gravity of the situation and urged both government staffers and private sector leaders not to operate as though things were ‘business as usual.’
A government proposal for a ‘pension holiday’ for civil servants is being planned to save more than I$40 million in the current year’s budget. However, civil servants have taken a dim view to the proposal, which they said was not mentioned during a planning meeting held earlier this month at George Hicks High School.
‘There are some civil servants who are making some noise about it, but we thought that was the best option we had been given,’ Mr. Bush said.
The United Democratic Party government has previously reached out to both civil servants and private sector for assistance and ideas.
‘The UK is still saying that a solution has to be found for sustainable revenue,’ Mr. Bush said. ‘I have called on the private sector [and] the Chamber of Commerce to come up with some ideas for revenue…I wanted to meet with the finance industry. I don’t know how much more they can take. I don’t believe they can take any more.’
Aside from plans to suspend public sector pension contributions, several government departments have put in place strict controls on overtime, time off in lieu of pay, take-home vehicles and even advertising.
Financial Secretary Ken Jefferson has previously said government would not seek to actively eliminate people’s jobs. However, he said government workers here on contract would have renewals of those contracts reconsidered carefully by chief officers of government ministries.
Mr. Bush said government heads of departments and chief officers had been invited to the meeting, along with heads of public authorities and all newly appointed board chairmen and members.
‘I’m calling them and saying: look, we can’t mess around,’ Mr. Bush said. ‘Every time we open our mouth to try and do something, somebody wants to jump down in it.
‘If they can come up with a better idea, that’s fine. One thing I don’t want to do is cut anybody’s jobs, cut anybody’s salaries.’
‘We’re having a most difficult time, even to pay salaries. The UK is not wanting to allow us to borrow more.’ – LOGB McKeeva Bush