The Cayman Islands’ financial
position will become clearer within the next week as government prepares to
release its strategic policy statement for this year and the upcoming year’s
budgets.
The Legislative Assembly will
resume meeting today (Wednesday, 24 November). The strategic policy statement
address has been scheduled for Friday.
Premier McKeeva Bush has hinted
that things might not be so bad on the government’s money front.
At a public meeting this month, Mr.
Bush 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 a deficit
reduction. He said government was actually managing a budget surplus of some
$15 million through the first quarter of the current fiscal year, from July
through September.
The initial budget plan called for
a $30 million operating deficit to remain by the end of the government’s
current fiscal year on 30 June, 2011. That budget also expected Cayman would
exceed legal limits on its debt service payments and net-debt ratios by 30
June. All three issues have caused the United Kingdom some concern and have led
to the UK foreign office keeping a much tighter rein over Cayman’s borrowing.
A deal for US$185 million in
borrowing to support government operations was recently approved by Cabinet members.
However, Premier Bush has said the country and the financier were still in
talks over an interest rate on the loan.
In addition to the financial
issues, Caymanian lawmakers have a number of key pieces of legislation to
decide over the next week or so.
Tax concessions
Cayman Islands Cabinet members
already have the ability to provide tax concessions to various companies that
are exempted under the law from paying taxes on things like profit, gains,
appreciations or income. The exemption can be made if the investment in the
Islands’ business is likely to bring a “direct benefit” to the Islands in the
tourism industry, beneficial exploitation of natural resources, develop the
export trade, increase government revenues and other benefits.
The investment in the business
would also have to assist in the employment of both skilled and unskilled
Caymanian workers.
However, changes proposed in the
Tax Concessions (Amendment) Bill, 2010 would expand the scope of the law to
apply to “other companies whose operations the…Cabinet deems to be in the
national interest”.
Witness protection
A proposal that aims to protect
vulnerable and intimidated court witnesses is also expected to be brought
before the Legislative Assembly in the current sitting.
The Evidence (Amendment) Bill,
2010, would also allow for testimony via a live television link in certain
court proceedings.
According to the bill, a witness in
criminal court proceedings can receive assistance “if the court is satisfied
that the quality of evidence given by the witness is likely to be diminished by
reason of fear or distress on the part of the witness”.
The proposal leaves it up to the
court to determine what special measures should be taken to protect the witness
from intimidation based on the circumstances of each individual’s situation.
One measure would be the live television testimony; another method would include
the use of a screen or other arrangement to prevent a witness from being seen
by the accused; a third way would be for an interview with the witness to be
pre-recorded and then shown to the court.
Dormant accounts
A number of changes are being
proposed to the newly approved Dormant Accounts Law, which allows the
government to take assets from privately held accounts that have been unused
for a certain period of time.
The new Dormant Accounts
(Amendment) Bill, 2010, extends the dormancy period created by the original law
from six years to seven years.
The changes would also eliminate
all references from the current law to financial institutions and instead refer
to the entities that hold dormant accounts as account providers. Under the
amendment, account providers include: class A insurers, banks, some licensed
trust companies, credit unions, building societies, or any other type of
financial institution that Cayman Islands Cabinet members determine to be an account
provider. Cabinet members can make that designation in any case where it is
deemed to be in the national interest to do so.
The notification period for the
dormant account holders – other than the extension of the dormancy period to
seven years – has remained the same under the Dormant Accounts (Amendment)
Bill. Account providers must take certain steps to contact holders of dormant
accounts by 31 July of the year that account has reached the seven-year
threshold.
If no account activity is noted, or
if no attempt to contact the account provider is made by 31 December of that
year, the funds can be transferred to government by 31 March of the following
year. The law absolves the account provider of any liability for the funds once
they are transferred to government. However, there is a process whereby account
holders can get their money back from government.
District councils
Although many of Cayman’s electoral
districts already have ad-hoc advisory councils, legislators are looking to
create a more formal set of operating rules for the councils. The district
councils are mentioned in the Cayman Islands 2009 Constitution, but the
document largely leaves it up to the government of the day to design and create
those bodies and their operating rules. The idea is to form a citizens advisory
panel in each voting district.
Council members would provide
advice and information to the elected member or members of their respective
districts on a number of topics, including finance, tourism, development,
immigration, public works, education, sports, culture – basically any matters
that affect the district.
According to the Advisory District
Councils Bill, 2010, each district council would be “subject to the district of
the relevant (Legislative Assembly) member”.
Exactly how many district councils
exist would be determined based on how many electoral districts are formed in
the Cayman Islands.
Now, the country has six electoral
districts: George Town, Bodden Town, West Bay, North Side, East End and the
Sister Islands (comprising Cayman Brac and Little Cayman).
A recent study of the electoral
boundaries on Grand Cayman recommended the creation of a seventh, three-member
district in the Prospect area. There have also been proposals for the creation
of single-member voting districts.
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