Gov’t proposes $85 million two-month operating budget

McKeeva Bush lg

The Cayman Islands government is seeking $127 million in total appropriations for the next two months. The measure, proposed during a Legislative Assembly meeting Wednesday, seeks only spending authority for up to that amount and doesn’t necessarily mean government will spend precisely that much money within July and August; the two months covered by the interim plan.  

Premier McKeeva Bush also cautioned that the government’s operating expenses – about $85 million in total – “should not be taken for granted as being 2/12ths of the amount that government will spend over the full 2012/13 financial year”.  

Cayman Islands Governor Duncan Taylor made a brief statement to assembly members starting off proceedings on Wednesday, though the typical pomp and circumstance of the traditional Legislative Assembly state 
opening was foregone. 

“In the absence of a final budget, it would not be possible to use [Wednesday] morning’s occasion to outline government’s goals and intentions for the new parliamentary session,” Governor Taylor told the assembly. “It has been agreed, therefore, that an interim budget will be presented to the House with a view to using the intervening period to finalise the substantive 
full year budget.”  

According to the interim spending plan presented by Mr. Bush, the government sought approval for $84.9 million in operating expenses – those are the day-to-day expenses of government to cover salaries and other costs of central government as well as those of statutory authorities and government owned companies.  

The expenses include $54.3 million in ministry/portfolio output groups, $18.2 million purchases of outputs from statutory authorities and government-owned companies, $6.1 million in transfer payments, $3 million in purchases from non-government output suppliers and $3.3 million in “other” executive expenses.  

“I call on all government agencies to continue to exercise fiscal constraint and prudence during the coming financial year,” Mr. Bush said. “The government is still faced with increased costs as a result of implementation of the bill of rights, provision of national security measures, healthcare and demands on government for social assistance.”  

In addition to the operating budget, government will need $5.5 million to cover financing expenses from interest accruing on public debt. It will also require a further $9.7 million, a large portion of which is to fund the construction of the new John Gray High School. In addition, that $9.7 million will cover spending by the Cayman Turtle Farm ($2 million), Cayman Airways ($800,000), the Cayman Islands Development Bank ($400,000), the Health Services Authority ($900,000), the new MRCU plane aircraft hangar ($300,000), and improvements to the vehicle licensing department in Cayman Brac ($200,000).  

Another $1.9 million is earmarked for executive assets such as improvements to local road surfaces and $400,000 to fund the Cayman Brac emergency shelter.  

The final proposed appropriation of $25 million was sought to cover an overdraft of government funds which, by August, is expected to be around $24.8 million.  

“The requested overdraft balance of $25 million is exactly equal to the existing amount for the overdraft balance that is contained [in the current government budget],” Mr. Bush said. “The government is not being extravagant in the two-month period.”  

Mr. Bush said the full budget will be proposed within the two-month interim spending period, though he did not set a specific date for that to occur. 


Rejected twice  

Mr. Bush revealed for the first time Wednesday that officials with the United Kingdom Foreign and Commonwealth Office had rejected proposed budget plans from the Cayman Islands government twice.  

The first plan, presented in writing on 13 June, which proposed an operating surplus of $22 million for the 2012/13 year, was sent back by the UK because long-term borrowings totalled $59 million and overall capital expenditures and investments totalled $83 million.  

The premier then proposed – on 22 June – to temporarily eliminate previous long-term borrowings of $59 million, proceeding on a “zero appropriation” request for capital expenditure on public projects and investments. The borrowing would be put off until further negotiations with the foreign office could take place, he said. 

“This too was rejected by the FCO,” Mr. Bush said. “The FCO is absolutely insisting on further reductions to operating expenditures.”  

The shortened timeline for approval would not have allowed government to consider further cost reductions in a “careful and measured way”, Mr. Bush.  


Good news?   

Although the Cayman Islands will end the current 2011/12 budget year on 30 June – Saturday – with an operating deficit, it will be less than first thought.  

Mr. Bush said central government was forecast to a have a small operating surplus – meaning revenues outpaced expenses. However, losses by statutory authorities and government-owned companies would eat that up, he said.  

“The entire public sector is therefore forecast to have a deficit of $1 million for the 2011/12 year,” the premier said.  

Earlier forecasts had that overall operating deficit at around $7 million. 

McKeeva Bush

Premier Bush backed by UDP party members at a meeting earlier this year. Mr. Bush’s government now faces a time crunch with the upcoming budget. – Photo: File


  1. I am glad that the UK rejected the budget proposals of the government sent to them in June and I am disappointed that our government has been allowed to get away with an interim budget that still contains almost 5 Million for just 2 months of subsidies to money losing entities like the Turtle Farm and CAL. I am also offended that they have permitted almost 1 Million to be wasted on what may be kindly viewed as slush funds, patronage allocations and the anti-OMOV campaign with no reduction in the budget for luxury travel. This budget seeks to unnecessarily increase the burden on our children and grandchildren for decades to come. Radical reform of the way government is permitted to operate is required.

  2. Is there some part of NO that McKeeva doesn’t understand? He signed an agreement saying there would be no more borrowing for three years and then he submits a budget with 59M in borrowing. To top it all off, he refers to 59 million as a modest sum.

    How can anyone side with McKeeva on this issue when he has made it clear that he wants to use 15 million of everybody’s money to put solar panels on the roof of houses of poor people who can’t afford to pay their electricity bill? And now we are seeing paid advertisements saying there is 10,000 or more for people who need to fix-up their house.

    You have to be in line for solar panels or free money to side with McKeeva in this argument.

  3. When you have political party patronage taking priority and precedence over national issues…this is what you end up with.

    Both PPM and UDP governments depend on their civil service/statutory bodies employees for their political support base…this is why the government is the largest employer of huge losses.

    And every time proposals are brought to sell-off and privatise some of these losing public assest, there is a huge outcry of protest from…these same political party employees, because…

    They see their cushy civil service jobs disappearing…and where, if they do keep their jobs under private ownership, they might actually have to perform and do a competitive job, for their wages and salaries.

    I’m not implying that ALL govt owned entities fall into this category but many of the losing ones do…and there you will find the most arrogant, less qualified and downright rude and aggressive employees working, why ?

    Simply because of political patronage.

    Privatise some of these govt. owned entities…the government has never been and will never be the best of business people.