Editorial for 06 December: Budget austerity?

We fully agree with Premier McKeeva Bush’s statements regarding a time
for budget austerity and a move away from “business as usual” within the Cayman
Islands government service.

Mr. Bush’s comments were made last week during the delivery of what was
a rather grim Strategic Policy Statement that served to show just how serious
the funding situation now facing the Cayman Islands truly is.

We cannot borrow for a further three and a half years; this will have a
severe impact on the public projects government wishes to pursue and private
sector companies’ earnings from those projects.

The government will likely be forced to cut services and positions in
the coming years; we seriously doubt civil servants will be getting anything
like a pay raise in the current situation.

Yet for all the doom and gloom and statements about “austerity”, we
can’t help but notice government’s spending projections have increased by $21
million since the start of this budget year in July. We also note spending will
increase – if only modestly – in each of the next three years forecast.

Meanwhile, revenue projections have gone from $535 million (at the
beginning of this budget year) to $587 million by the 2014/15 spending plan.
That nearly 10 per cent increase over four years may not seem like much in
normal circumstances, but in dire economic times such as these we must wonder
if the government’s projections will seem a bit rosy by the time a few more
years pass.

We remind the current government that what got the previous
administration into such a mess was a combination of over-spending and overly
optimistic revenue projections. This country cannot afford to go down that road
any longer.

Premier Bush struck the right tone with his address on Thursday. We
just hope his government and civil service can turn words into action and truly
address this massive problem facing the Cayman Islands.