Change of financial year mulled

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The Ministry of Finance will submit
a position paper on the question of changing the government’s financial year to
correspond with the calendar year.

In 2003, the government changed its
financial year from the calendar year to a year that began 1 July and ended 30
June.

A statement issued by Press
Secretary Charles Glidden said Premier McKeeva Bush had raised the question of
switching the financial year back to what it was before the change.

“The Ministry of Finance is
considering a number of reasons why we should revert back to the calendar
year,” Mr. Bush said. “The end of our current fiscal year ends too close to a
general election and this was one of the reasons it was changed in the first
place.”

General elections occur every four
years in the Cayman Islands and up until 2005, were held in November. If a new
government was elected after a November election, it had no time to formulate a
budget before the beginning of the new financial year that began 1 January. The
change to a financial year that began 1 July alleviated that problem.

However, after the severe damage
sustained on Grand Cayman after Hurricane Ivan in September, 2004,
then-Governor Bruce Dinwiddy postponed the general elections scheduled for
November of that year for six months, to May 2005.

The subsequent election took place
four years later in May 2009, and the new government elected found itself in
the exact situation the change of the financial year had been implemented to
avoid.

In January 2007, former Governor
Stuart Jack said the UK Government would likely support a change of moving the
election back to November if the two political parties could reach a sensible
consensus.

However, the then People’s
Progressive Party government did not want to cut its traditional term of four
years to three and a half years and the then Opposition United Democratic Party
did not want to wait four and a half years for the next election.

Mr. Bush said with the elections
now in May, the original rationale for having the financial year run from July
through June was no longer relevant.

 “There are also a number of other reasons such
as the fact that all of our historical economic and other data are based on a calendar
year, as is the case with virtually most other countries everywhere,” Mr. Bush
said. “Therefore re-aligning to a calendar year would help us to match our
economic data with our fiscal data for better forecasting.”

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Mr. Bush
Photo: file
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