The Cayman Islands government is banking on much higher revenues and a slew of new fees that opposition party members called ‘unrealistic’ during Monday’s budget debate.
‘Against (the current financial) background, there must be worrying questions about how realistic current budget projections are,’ Opposition Leader Kurt Tibbetts told the Legislative Assembly.
Mr. Tibbetts, whose previous administration has been blamed for overspending the country into a CI $81 million operating deficit, said the government is now betting new revenue measures will generate some $94 million in this budget year – a prospect Mr. Tibbetts called ‘a wholly unrealistic expectation.’
The opposition leader pointed out projections in the last fiscal year planned on some $528 million in central government operating revenues. Those revenues ended up reaching about $487 million, according to Mr. Tibbetts…about a $41 million difference.
In addition, government expenses came in about $40 million higher than planned last year.
Despite those results, Mr. Tibbetts said government has presented a budget for the current year with a projected $562 million in earnings based on new revenue measures; many of which are first time charges that have never been measured in previous budgets.
To achieve this, Mr. Tibbetts said government would need ‘a positive movement of government revenues of nearly $100 million’ in one budget year.
‘On what possible basis can we believe that the current forecasts of revenue bear any relation to what will actually occur?’ he asked Legislative Assembly members.
Financial Secretary Ken Jefferson said Friday that the ‘bare bones’ budget proposal had to make the difficult decisions of imposing new fees during an economic downturn. However, he said that decision was taken to avoid wholesale cuts in the civil service and the imposition of direct taxation in the Cayman Islands.
Mr. Jefferson also noted that Cayman was still in the grips of a world-wide economic recession, the likes of which hadn’t seen in a century.
Mr. Tibbetts called that position a total reversal of what government had previously stated while publicly blasting the previous People’s Progressive Movement administration for the budget deficit in June.
‘I really couldn’t but marvel at this creature called politics,’ Mr. Tibbetts said. ‘There is something not quite right with the picture that government has been painting.’
The ruling United Democratic Party said the previous government, led by Mr. Tibbetts, refused to heed warnings about massive spending on government construction projects and failed to curtail growth in civil service salaries.
Mr. Tibbetts said Monday that he still believes those projects, including two new high schools and a new government office building are necessary to the Cayman Islands’ development as a country. He also said that, as the current government is finding out, cutting expenses in the civil service isn’t so easy.
The opposition leader said that ‘a culture change’ in the civil service was needed where expectations of new jobs and pay increases didn’t necessarily coincide with government revenues increasing.
‘It is a culture that is, in my experience, the most difficult thing to change, but it needs to change for all of our sake,’ Mr. Tibbetts said. ‘Those who are in the hierarchy know what I’m saying.’
Although government’s budget does reduce some expenditures, the roughly $5 million in cuts made do not significantly impact the $557 million of spending proposed in the new budget, according to Mr. Tibbetts.