Opposition: salary cuts and taxation needed
The Civil Service Association has
called an emergency meeting for tonight (Monday) to discuss plans to cut government employees’
wages and pensions, as well as to enforce a 50-per-cent contribution for health
insurance premiums this month.
An interoffice memo circulated by Financial
Secretary Kenneth Jefferson Friday stated that the wage cuts, contributions to health
insurance costs and the pension payment suspension for Cayman Islands
government workers are all being planned to take effect this month.
Meanwhile, the Opposition leader
sent a letter to Premier McKeeva Bush Friday stating that “cuts in pay and
benefits for civil servants (and) additional taxation” would be needed to get
Cayman out of its current budget mess.
Mr. Jefferson wrote in the
interoffice memo that the combined cost cutting measures, if they materialise,
would reduce government’s operating deficit by $17.3 million to $44.4 million
by the end of the current financial year (30 June).
The operating deficit by year’s end
was recently projected at $56.1 million, but the memo now puts that estimate at
In addition to the wage-related
reductions, government has asked all heads of departments to reduce
non-personnel costs by 15 per cent in the current year’s budget. Proposals for
those budget cuts are expected to be submitted by Wednesday.
To decrease the budget deficit, the
following measures were to take effect for the March pay period:
*Salary cuts for all civil servants
making $3,000 or more per month. The cut would five per cent for those making
$3,000-$4,499; 10 per cent for those making $4,500-$9,999; and 15 per cent for
workers making $10,000 or more per month. Elected members of the Legislative
Assembly would also have to take a 20 per cent pay reduction and the premier
will receive a 30 per cent pay cut.
*A “100 per cent” pension payment
suspension for civil servants and employees of statutory authorities and
government companies. Some legislative changes would be needed, as Cayman
Islands law currently requires that government pay12-per-cent of its workers’
salaries toward pensions each month.
*All public servants making $3,000
or more per month would have to pay 50 per cent of their health insurance
costs. Those costs range from about $350 per month for single workers to more
than $1,000 per month for employees with families.
“The government has decided that
the entire public sector (central government and SACGs – statutory authorities
and government companies) is required to implement, effective for the March
2010 pay date, the remuneration – reduction strategy,” Mr. Jefferson’s memo
Government officials also requested
that the Cayman Islands Civil Service Management Council consult with
ministries, portfolios and statutory authorities to provide “a collective view
on this decision”. Those views were to be presented to government by Wednesday.
The Compass contacted civil service
association leaders about the proposals. They declined to comment immediately.
Meanwhile, Opposition Leader Kurt
Tibbetts took up Independent MLA Ezzard Miller’s earlier call for government to
hold an emergency meeting of finance committee prior to a scheduled meeting
with the United Kingdom’s
Foreign and Commonwealth Office later this week.
At this meeting, government leaders
are expected to discuss the results of a recently completed study that made
recommendations regarding Cayman’s best strategy for solving its current budget
crisis. That report – dubbed the ‘Miller Report’ referring to James Miller III,
the ex-US bureaucrat who led the three-person review – has not been made public
“I believe this to be a fundamental
error,” Mr. Tibbetts said, regarding Mr. Bush’s decision not to release the
report to the public until he returns from London. “The report needs to inform
the development of a plan and proposal to be presented to the FCO as the government’s
suggested way forward.”
Mr. Tibbetts also noted in his
three-page letter that more would be needed to get the country’s finances back
“(It) will inevitably involve real
sacrifices by everyone in the country – cuts in pay and benefits for civil
servants, additional taxation, and so forth,” Mr. Tibbetts said. He declined to
elaborate on what was meant by “additional taxation”.
The government’s stated deficit
figure of $61.7 million in its internal memo last week consisted of the
*A $26.5 million operation gap
between central government revenues and expenditures.
*A $24.8 million shortfall in
non-operating expenses, including financing expenses.
*Extraordinary expenses of $4.1
million as well as a $6.3 million operating loss for statutory authorities and
Figures previously provided to the
Caymanian Compass regarding government’s project budget deficit included an unexplained
$6 million “other items” that did not appear in the analysis in the 4 March
Service Association’s meeting is set for 5.30pm Monday at Mary Miller Hall in
George Town. All civil servants are invited.
officials say a vote of the membership will be taken on those government proposals
at Monday’s meeting.