New overseas territories director visits
During his first visit to the Cayman Islands, British Overseas Territories Department Director Peter Hayes – who replaced former director Colin Roberts in October – fielded questions during a press conference about the fiscal framework document and other issues.
“[The Framework for Fiscal Responsibility] doesn’t sunset,” Mr. Hayes said. ‘But it’s not something that we would see as cast in stone forever.”
Right now, the framework agreement – signed by Premier McKeeva Bush in November 2011 and passed into law by legislators this month – sets guidelines on certain areas like government spending and borrowing, bidding for public projects and rules for financial reporting.
The document prevents the Cayman Islands from entering into any further long-term borrowing to support public projects through June 30, 2016. The only exception to that rule is in the case of natural disasters affecting the Islands.
“One would hope, as the financial management situation develops and as the guidelines come back within the debt limits…then obviously we want to make sure the Framework for Fiscal Responsibility is keeping pace with circumstances,” Mr. Hayes said.
Cayman Islands Governor Duncan Taylor elaborated.
“There’s a timetable to get the government finances back into a position where they meet all the borrowing guidelines,” Mr. Taylor said. “At that stage, assuming we get there, then some of the ability of the minister in the UK to have a say in the setting of the [Cayman Islands] budget falls away.
However, the principles of sound management will stay in the finance law, and that could include new rules for things like public project procurement.
“We may well have a new procurement law,” Mr. Taylor said. “What you may find is those basic principles that are in the Framework for Fiscal Responsibility might be incorporated into some other bit of the Public Management and Finance Law at some stage.”
The governor also sought to downplay fears that the enactment of the fiscal framework would somehow hold up the ForCayman Investment Alliance negotiations between government and the Dart group of companies. However, he noted that the UK’s financial adviser may wish to have a word with both parties involved in the agreement.
The negotiations include a proposal to relocate a section of West Bay Road along Seven Mile Beach and build a waste management facility in Bodden Town.
“It’s not a procurement process as such,” he said. “You’re not in a competitive tendering position because you’re looking at some swaps there between what government have and what Dart has.”