Budget down to the wire

Cayman Islands budget book main
Cayman Islands lawmakers have approved a $567 million spending plan for the government’s current 2012/13 budget year, but the measure will not take official effect until the Appropriations Bill receives the approval of Acting Governor Franz Manderson.

After gubernatorial assent, the Appropriations Bill must be ‘gazetted’ as per Cayman Islands law. Ministry of Finance officials said Thursday that all this would happen no later than Friday.

Mr. Manderson said Thursday that he did not expect to receive the bill on his desk until at least late Thursday afternoon or early evening.

There is a process the legislation must go through with the Legislative Assembly staff and legal department drafting prior to it going to the governor for assent.

The Cayman Islands will officially run out of authority to expend public funds at midnight Friday, when the two-month temporary budget agreed in late June expires.

The spending plan depends on a 20 per cent, one-year growth in revenues to make ends meet, according to government budget documents.

The proposal also requires a total of $81 million in overdraft facilities, also known as transitional borrowing, to cover expenses during the lower-earning months of the fiscal year.

Central government expenses are forecast to be $567 million for the year, while revenues are forecast to come in at nearly $650 million.

“The [revenue] amount represents a growth of 20 per cent when compared to the $544.1 million in revenue forecast for the 2011/12 year,” budget documents state. “The forecast is based on enhancement to current revenue streams and new revenue measures totalling approximately $90 million.”

The new fees and charges, according to earlier statements by Cayman Islands Premier McKeeva Bush, include higher fees for work permits, increases in stamp duties on certain real estate purchases, and increases to certain fees in the financial services sector, among other revenue streams.

The central government expenses of $567 million are made up of $251 million in personnel costs, $95 million in supplies and consumables [including costs for government building leases], $25 million in depreciation expense, $33 million to finance borrowing costs, $108 million in outputs purchased from statutory authorities and government-owned companies, and nearly $19 million in outputs purchased from non-government suppliers.

In addition to those expenses, $32.8 million in “transfer payments” are budgeted in the 2012/13 spending plan. Those include $14.6 million in scholarships, educational support and nation-building programmes, $8.7 million in poor relief and children or family services assistance programmes, $5.6 million in ex-gratia payments to seamen, $1.3 million in benefit payments to ex-servicemen, $890,000 in housing assistance and $264,600 in support to local business associations, among other expenses.

“The government made significant efforts to restrict expenditures,” the budget statement noted. However, rising health care costs, the need to contribute to government worker past due pensions [nearly $17 million], and the ongoing implementation of the constitution, which was expected to cost more than $32 million before work was completed, all served to increase costs, government noted.

Cayman Island budget book

Cayman Islands 2012/13 Budget
Brent Fuller

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