Premier says Cayman deficit shrinking

Cayman Islands Premier McKeeva Bush told a group of more than 200 people Tuesday night in Bodden Town that the government has significantly reduced its operating deficit in both the current fiscal year and for last year.

According to Mr. Bush, government’s operating deficit for the 2009/10 financial year – which ended 30 June – was some $15 million.

That’s far less than the $45 million deficit government was once expected to end the year with.

Mr. Bush said it was a major achievement, given that the previous administration had ended its 2008/09 fiscal year with an operating deficit of some $81 million.

The premier also said that, through the first quarter of the current budget year – July, August and September – government’s projected operating deficit for the end of the budget year, as of 30 June, 2011, was about $6 million.

“That is much better than expected,” Mr. Bush said.

He said government had managed to trim $18.5 million in spending since the beginning of the current fiscal year on 1 July, which led to the deficit reduction and that government was actually managing a budget surplus of some $15 million through the first quarter of the current year.

“This did not happen by chance,” Mr. Bush told the crowd at the Bodden Town Civic Centre. “And this, ladies and gentlemen, is no small step.”

Operating deficits are basically the difference between what government earns for the year and what it spends.

There was some scepticism regarding Mr. Bush’s claims from members of the Bodden Town audience Tuesday night.

Local radio talk show host Austin Harris questioned whether any figures the premier quoted regarding the 2009/10 deficit were accurate, since the auditor general has recently said more than half of Cayman’s government agencies had not filed timely financial statements for that budget year.

“Can you prove these numbers are real?” Mr. Harris asked the premier.

Mr. Bush said the auditor’s office could verify the figures.

“Yes, we have the accounts and the auditor general can verify them,” Mr. Bush said. “Why else would I come here tonight and tell you we have saved $66 million?”

The premier also said he felt his administration had been treated unfairly on Mr. Harris’ morning radio programme and that he personally would not be making any further appearances on the show.

Civil service cuts

Mr. Bush also made general references to a civil service cost cutting plan, the first phase of which had been approved by Governor Duncan Taylor and Cabinet ministers.

According to Premier Bush, the first phase of the civil service review dealt with agencies like Public Works, HM Prisons, the Cayman Islands National Insurance Company and the Department of Tourism.

The civil service study had identified some $17 million in annual savings that could be achieved within those agencies. Mr. Bush said Cabinet had accepted about $15.5 million worth of those savings.

“That’s how much we’ll be saving each year,” he said.

The premier did not identify what specific areas the cuts would come from, when the cuts would take effect, or whether the government would use outsourcing to the private sector in some areas such as prisons and the tourism department – as has previously been suggested by government consultants.

The next stage of the civil service review will take a look at eight more government agencies responsible for $200 million in yearly spending, Mr. Bush said.