Budget preparations “painful” and “stressful”
Governor Duncan Taylor warned Monday that Cayman has to continue cutting its costs to bring government finances back on track.
Delivering his annual Throne Speech at the official state opening of the Legislative Assembly, Governor Taylor described the preparations of the 2011/2012 budget as “painful” and “stressful”.
The budget had been scheduled to be delivered after the Throne Speech, but Premier McKeeva Bush announced Friday that it had to be delayed because the United Kingdom government wanted to see more Civil Service personnel cuts before it would agree to sign off on the budget.
Governor Taylor said Cayman, like other countries, was having to take “difficult decisions to cut costs, in order to bring government finances back onto a sustainable track”.
“It is a painful process,” he said.
He said that while he was impressed by the cost cutting he has seen since his arrival in Cayman early last year, “more still remains to be done”.
The governor said it was hoped a small surplus in recurrent revenue and recurrent expenditure could be achieved in this fiscal year.
However, he said Cayman was spending more than it was earning, partly due to the government paying back capital on old loans and capital investment projects like the Government Administration Building and the new high schools.
“We continue to live beyond our means,” he said.
In order to get Foreign and Commonwealth Office Minister Henry Bellingham to agree to allow Cayman to borrow additional money this year, Cayman needs to reduce its spending, Mr. Taylor told the Legislative Assembly.
“Government had to commit to a three-year plan demonstrating incrementally reducing expenditure year on year. We need to meet the commitments we have made. We are on the right trajectory, but it is vital that we keep to the task. I am afraid that means more tough decisions,” the governor said.
The three-year plan, agreed in 2010 between the Cayman Islands Government and the UK Foreign and Commonwealth Office, required Cayman to enact measures to reduce its public debt and help balance its yearly budget so that the government does not continue to incur operating deficits. That three-year plan covers Cayman’s 2010/11, 2011/12 and 2012/13 budget years.
Mr. Taylor described the preparations for the coming financial year’s budget, which begins 1 July, as “stressful and prolonged”, before thanking those who had put in “hard work and long hours” to prepare it.
Premier Bush said he was “praying” he would be able to bring the budget before the Legislative Assembly next week. “I am praying because the UK has to say when we can present that budget,” he said before moving a motion to adjourn the House to a date to be fixed.
Mr. Bush said Friday that the government would not cut back on civil servants’ salaries or benefits.
What to expect
In his Throne Speech, Mr. Taylor addressed some of the work to be done during the coming year by the various ministries and portfolios of government.
Addressing crime, he said providing security remains a priority and that although Cayman has seen a reduction in crime figures, the recent increase in robberies is a “particular concern”.
Mr. Taylor, who chairs the National Security Council, said the council had agreed on a Crime Prevention Strategy to address some of the long-term causes of crime, which would be made public shortly. He said the Cabinet Office would help coordinate and implement the crime prevention policy included in that strategy.
Police will continue to develop partnerships with US, Canadian and Jamaican law enforcement agencies to help build intelligence to secure Cayman’s borders and prevent organised crime from gaining a foothold here, he said.
The governor acknowledged that public confidence in the Royal Cayman Island Police Service remains “an elusive goal”.
“The RCIPS recognise the key benefits of having officers at the neighbourhood level, known and trusted by those they serve and key to the securing of public confidence,” the governor said, adding that this year, resources permitting, police would increase the number of officers working in the community.
Turning to good governance and transparency, Mr. Taylor said in the coming financial year, the Office of the Auditor General will provide the Legislative Assembly with up to six financial and performance audit reports of government departments.
On housing issues, he said Fairbanks, the last of Grand Cayman’s trailer parks, which was set up to house residents who had lost their homes in Hurricane Ivan in 2004, will be closed by the end of 2011 and the remaining residents moved to affordable housing.
Addressing issues relating to the courts and prisons, Mr. Taylor said the Prison Service will offer programmes to “reduce prisoners’ criminal thinking and drug and alcohol use”.
Courts will also begin allowing prisoners on remand to give evidence via live video links from prison to reduce the expense of transporting prisoners to court.
A proposed new courthouse will not be built in the coming financial year due to financial restrictions, he said.