Update, 1:50pm: The state opening of the Legislative Assembly will be held at 4.15pm today, Monday 20 August, according to a brief statement from the premier’s press secretary. Originally, the annual Throne Speech and Budget Address were to be held on Friday, but were postponed to 2.30pm Monday. That meeting was then rescheduled for 4.15pm Monday, according to a one-line statement from the office of the premier’s press secretary, Charles Glidden, released an hour before the 2.30pm meeting was to begin.
Earlier story: Government leaders will try again this afternoon to present a spending plan for the 2012/13 budget year, which started nearly two months ago.
Plans to hold the annual Throne Speech and Budget Address on Friday afternoon in the Cayman Islands Legislative Assembly fell through when local government and the United Kingdom Foreign and Commonwealth Office directors couldn’t come to an agreement on spending levels, according to several sources who spoke with the Caymanian Compass.
The LA proceedings were postponed until Monday afternoon, but by press time Sunday there was no clear indication as to whether the meeting would, in fact, go ahead.
Several government sources contacted by the Caymanian Compass on Thursday and Friday confirmed that the UK’s Foreign and Commonwealth Office had not yet approved the spending plan put forward by Cayman Islands Premier McKeeva Bush’s government.
According to those close to the negotiations, UK officials and Caymanian lawmakers were in intense negotiations and were getting closer to an agreement on the proposed $580 million spending plan. However, the UK remained concerned about the level of Cayman’s government spending and whether it was sustainable.
Premier Bush released a statement Friday afternoon regarding government budget negotiations with the UK foreign office.
“The government, working with the civil service, has produced a budget which we consider to be credible and sustainable both from the revenue and expenditure perspectives and which meets the targets established by the [UK] Foreign and Commonwealth Office for the next four years to return our finances to a sound footing.
“The FCO still has issues with a few technical areas and we have agreed to postpone the budget presentation until Monday while discussions continue to resolve these issues.
“We continue to do what is in the best interest of our beloved Cayman Islands.”
Cayman requires UK budget approval because its government spending plan for the past few years has been outside acceptable levels for debt and cash reserves set out in the territory’s Public Management and Finance Law. Judging from government estimates, it will be 2016 before Cayman’s debt and cash position allow it to return to full internal self governance with regard to the annual budget.
On Thursday evening, the office of Premier Bush’s press secretary issued a statement on a number of new revenue measures that had been proposed within the 2012/13 budget. The revenue measures would raise more than $90 million in the 2012/13 budget year, the statement read.
It was unclear on Friday if the UK had signed off on those changes. The UK has previously demanded that Cayman improve its budget position at least partly through spending reductions as well as new revenue measures.
According to the statement released Thursday evening: “In addition to the revenue measures announced as alternatives to the Community Enhancement Fee, government is proposing increases to other existing fees to further improve government’s revenue for the 2012/13 financial year and beyond. Along with the increases, a proposed new licensing system for fund and corporate directors will create a new revenue stream.
“The government is proposing to increase the annual fees for exempt companies by $100. Issuing of certificates for a company, filing of a company document, company certification and express service for certificates, certification, filing and registration and re-registration are slated for a $25 increase.
“Annual fees for directorships under the Companies Law are earmarked for the following increases: securities and investment businesses increased by $500; regulated entities increased by $300; and all other directorships by $100. Company managers and trust services are both listed for increases of $100. A variety of Cayman Islands Monetary Authority fees are also among the proposed fee increases, ranging from $100 to $800.
“Proposed amendments to the Companies Management Law will create and implement a new licensing system for fund and corporate directors. At present, these directors are not licensed or regulated.
“Once the 2012/13 budget and the amendments to the Companies Management Law are passed by the Legislative Assembly, they will have to pay the fees detailed in this revenue measure. The proposed fees range from a low of $500 for one directorship per director to a high of $25,000 for 100 or more directorships.
“These measures are in addition to the revenue measures that replaced the Community Enhancement Fee, namely: increased bank and trusts license fees, work permit fees, tourist accommodation tax, departure tax, master fund registration fees, traffic regulatory fees; exempted limited partnerships; imposition of a stamp duty on certain property insurance policies; reverting to the 7.5 per cent stamp duty on land transfers; and implementing fees for non-commercial boats.
“In all, these revenue measures and those measures that replaced the Community Enhancement Fee are expected to earn the government some $90.46 million during the 2012/13 fiscal year.”