For the third time in four years, it appears the Cayman Islands government will come up short at the end its fiscal year.
The Cayman Islands government is facing a small operating deficit as its current budget year draws to a close in June, according to projected figures presented as part of the country’s Strategic Policy Statement.
The $4.5 million anticipated shortfall is largely due to a $21 million increase in government spending and projections that a modest increase in public sector revenues over the same period just won’t be able to match the expenditures.
According to revised government figures, Cayman’s central government revenues for the current 2011/12 fiscal year will rise to $548 million, while expenses will increase to $511 million. When an additional $41.8 million to pay off public sector debt and cover the losses of statutory authorities and government-owned companies is factored in, the operating deficit of $4.5 million is reached.
The Cayman Islands government ended the previous fiscal year with a $25 million operating surplus, which means revenues were higher than expenses. This year, the government had hoped to end with a modest $3.8 million surplus, but revised figures from the policy statement send that figure more than $8 million in the other direction.
The policy statement sets out expectations that Cayman will meet all legally required principles of responsible financial management by the 2014/15 budget year, one year before the deadline recently set by the United Kingdom in its Framework for Fiscal Responsibility.
Premier McKeeva Bush said Thursday during his policy address to the Legislative Assembly that government does not intend to borrow until June 2016, even beyond the terms of the policy statement.
He said all public sector agencies will have to curtail spending increases to a “bare minimum” over the next three years
“We can no longer afford to do business as usual,” Mr. Bush told lawmakers.
Please see full details of this story in Monday’s Caymanian Compass…