Budget deadline changed

The Legislative Assembly passed a
bill on late on Wednesday night that will enable the government’s annual budget
to be presented to the House on any date before the new financial year.

Under the Public Management and
Finance Law (2005), the government has had to present its budget to the House
by 1 May. It is unable to do that this year due to the general election in the
United Kingdom.

The presentation of the budget can
be delayed in exceptional circumstances under the current law, but following a
motion brought by Premier McKeeva Bush, who is also Minister for Finance, law
makers voted to change the legislation so that from now on, the 1 May deadline is
abolished and the budget presented on any date prior to 1 July each year.

Mr. Bush explained that Cayman
needs the UK’s Foreign and Commonwealth Office’s permission to borrow money, as
it expects to do in the next budget, but the British minister in charge of overseas
territories cannot agree to this before the 6 May election.

“I would not expect approval for
such borrowing to be possible before the week beginning 24 May 2010 at the
earliest,” said Mr. Bush. 

He added that this year’s 1 May
deadline would have also been hard to meet because of difficulties getting
civil servants to agree to cut personnel costs for the 2010-11 financial year.

He said the 1 May deadline had been
“consistently challenging to meet in the best of times. Now that the economic
challenges are greater, there is justification for allowing the analysis and
measurement of Government’s policies to go deeper into the fiscal year.”

He said pushing back the deadline
meant additional flexibility to make more informed decisions and would not
compromise the fundamental principles of the Public Management and Finance Law.

Referring to a 20 April letter from
the FCO, which stated that postponing the budget would give the government “valuable
time to consider the full range of options more thoroughly and to provide the
detail needed to ensure that proposals are deliverable,” Mr. Bush said. “If
this is true for 2010, then it is also true for all subsequent years.”

But Opposition members were not
convinced and repeatedly queried why it was necessary to change the deadline
for every year from now on.

People’s Progressive Movement
member Alden McLaughlin argued that the government had had nearly a year since
it was elected to address public finance issues and described the delay in presenting
the budget as “inexcusable”.

He accused the United Democratic
Party government of an “absence of leadership… [and] an unwillingness to make
hard decisions” and said moving deadlines and changing laws with which the government
could not comply was a “mistake”.

Mr. McLaughlin said removing a
defined deadline to present the budget meant a reduction in the time during
which members of the Legislative Assembly and the public could scrutinise
budget proposals, which could amount to “two feet of paper”, prior to them
being introduced.

A proposed amendment by Mr.
McLaughlin to change the deadline only for the coming fiscal year was voted
down.

One reason given by the government
on why it wanted the budget presentation deadline to be changed permanently was
that elections are held in May. Last year, following the change in government,
the budget was presented in October, five months later than stipulated in the
law.

“Given the fact that we are in a
May election cycle, we now have to rethink what the fiscal year end is,”
Minister of Education Rolston Anglin said, who suggested that it would make
sense to move the financial year end to December.

In 2003, the government changed its
fiscal year from a calendar year to one that began 1 July and ended 30 June
because, at the time, elections were held in November, which was deemed to be
too close to the end of the financial year. An election had been scheduled for
November 2004, but following Hurricane Ivan which hit in September that year,
the election was postponed to the following May. Last year’s election was also
held in May.

Mr. Anglin denied that any government
would rush through a budget without allowing time for it to be examined; saying
a government that attempted to do so would be answerable to the public at the
next election.

Defending the decision to remove
the 1 May deadline, Premier Bush harked back to the days when the financial
year end was December and there was no set deadline for the presentation of the
budget. “We all knew that the budget was expected in November… so we could
finish by the end of December,” he said.

The legislation was also amended to
give the Office of Information Commissioner control over the management of its
own finances, similar to the Complaints Commissioner, and to make the Information
Commissioner a chief officer.

An effort by independent legislator
Ezzard Miller to have the position of Speaker of the House included in the same
category was abandoned at the committee stage of the meeting when Attorney
General Sam Bulgin pointed out that there was a possibility this may have
constitutional implications. Members had supported the addition of the amendment
and it is likely to be brought again once the issue has been clarified.

With the amendment to the timing of
the budget presentation, if the government presents the budget so close to the
beginning of the new fiscal year that there is not enough time to debate it and
convene a Finance Committee before 1 July, the government will operate on an
interim budget until the budget is passed.

0
0

NO COMMENTS