The Cayman Islands government has not met – or even come close to – spending targets established in its three-year budget plan agreed upon with the United Kingdom in 2010.
According to a review done by the Caymanian Compass, central government expenses for the 2010/11 fiscal year were $520.7 million compared with a forecast of 508.4 million in the three-year budget plan.
In the current year, 2011/12, projected expenditure figures were around $550 million – including an additional spending amount of $49 million approved by lawmakers earlier this year – while planned operating expenses according to the UK plan were $479.2 million.
For the upcoming year, which starts on Sunday, 1 July, Cayman’s budgeted expenses won’t exactly be known until a full budget is proposed. That’s not likely to occur before September, with Premier McKeeva Bush expected to bring an interim spending plan before the Cayman Islands Legislative Assembly later Wednesday.
However, even Mr. Bush’s stated expenditure target of $498 million would have been well above $462.3 million set out in the final year of the UK’s three-year budget plan with the Cayman Islands.
Premier Bush said in a broadcast address to the territory Friday that government would propose a two or three-month interim budget to the Legislative Assembly this week. He clarified Monday during a meeting with liquor licence holders that the interim budget would be for two months only.
The interim budget, Mr. Bush said, would provide lawmakers additional time to make further cuts in government spending which – at one point – was a combined $151 million over what government ministers initially proposed.
“Since the world financial difficulties started and reduced our economy, the government has had to render much more social assistance to individuals and families in such areas as rent, financial assistance and scholarships,” Mr. Bush said Friday. “The cost to fight crime also escalated. The cumulative effect was much more financial pressure on the government. We cannot allow our expenditures to rise as they have in the past. We must cut the expenditure, because the last government put us in this intolerant situation. We must reduce expenditure if we are ever going to control our finances again.”
Mr. Bush said he initially set budget targets in January of $498 million for government operating expenditure and $59 million in capital [construction] projects.
The initially proposed operational expenses, which were overshot by $130 million, were cut to $549 million total – still about $50 million above what was first proposed. The capital expenditure budget was also overshot by some $21 million, he said.
The government’s proposed 2012/13 budget, which was sent to the UK government earlier this month, included $59 million in borrowings and an increased “overdraft facility” – which would allow the government to borrow to cover expenses if it came up short at the end of the year again. The UK’s Foreign and Commonwealth Office rejected that spending plan, stating the proposed expenditure was “unsustainable”.
Opposition Leader Alden McLaughlin said Tuesday that it would be quite a feat for government to reduce expenses even from $549 million to Mr. Bush’s initially proposed $498 million for the year.
“Quite how he expects to get that down to $500 million is difficult to understand,” Mr. McLaughlin said.
The State Opening of the Legislative Assembly is scheduled to get under way at 10am.