The Cayman Islands government’s full year spending plan is expected to go to the Legislative Assembly for approval in early August, according to the deputy governor’s office.
According to meeting minutes released by Deputy Governor Franz Manderson’s office, various cost saving measures have been discussed within the upper ranks of the civil service.
Those measures include reducing official travel “to a minimum”. Mr. Manderson has asked the Portfolio of the Civil Service to draft a policy on official travel.
The government would also review the use of government’s vehicles, including take-home vehicles, to determine if any costs could be shaved.
Cayman Islands Premier McKeeva Bush has previously announced that no civil service jobs that are vacant would be filled in the upcoming 2012/13 budget plan. The government is already late in approving the spending document for the start of the budget year – 1 July – and had to introduce a two-month interim operating budget to get Cayman through July and possibly August before a full 12-month plan could be approved.
Mr. Bush, who is also the Cayman Islands’ Finance Minister, has given few details about what the upcoming budget plan will entail. However, he said during a public meeting Monday that no civil servants’ jobs would be cut, although some government services might have to be reduced or eliminated.
“I want to see what [opposition party members] say ‘must cut’,” Mr. Bush told a crowd outside the Bodden Town post office Monday. “What must we cut? We’re not cutting the civil servants – the jobs there. So what must we cut, the services?”
It’s a difficult position for the Cayman Islands, which has been out with the principles of responsible financial management since the end of government’s 2008/09 fiscal year. Essentially, Cayman’s debt is too great compared to its yearly revenues and the territory doesn’t have enough money in the bank to support 90 days of continuing activity.
Mr. Bush revealed in late June that officials with the United Kingdom’s 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 said.
On Monday, Mr. Bush again blamed the opposition People’s Progressive Movement party for the government’s budget problems, which Cayman has not been able to extricate itself from since the final year of the former PPM government’s administration.
“They put us in the hands of London when we have never been controlled by the London office,” Mr. Bush said.
A two-month temporary budget was approved in late June by the Legislative Assembly on a party-line vote. Eight members of the government and its back bench supporters voted to approve the two-month spending plan. Five opposition party members and North Side independent Member of the Legislative Assembly Ezzard Miller abstained from the vote. One LA member was absent when the vote was taken.
The Cayman Islands government sought $127 million in total appropriations for the next two months. The measure 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 Bush cautioned that the government’s operating expenses – about $85 million – “should not be taken for granted as being 2/12ths of the amount that government will spend over the full 2012/13 financial year”.