It appears Mother hasn’t even gotten
started when it comes to finances in the Cayman Islands.
Governor Duncan Taylor informed the country
last week that the Framework for Fiscal Responsibility – the agreement the
Cayman Islands government signed with the UK to get our budgeting back on track
– will be with us for quite some time.
There is no ‘sunset’ on the agreement.
The announcement came as Premier McKeeva
Bush, the signer of the agreement, was away in London to attend the annual
Joint Ministerial Council meeting in which overseas territories meet with
Britain’s representatives. Had he been here, we are sure Mr. Bush would have
had a thing or two to say on the matter. Not too long ago he railed about
Britain’s ‘good governance’ interference getting in the way of public projects.
The framework agreement, while not set in
stone, will continue to help ensure the Cayman Islands get back within its debt
What the agreement does is prohibit the
Cayman Islands from long-term borrowing for public projects until 30 June,
2016. The only thing that would get us out of the agreement is an act of God
such as a major hurricane. But even if the agreement does expire in 2016, there
are likely to be some rules and regulations in the plan that are carried over
into law beyond that point. The meeting about the framework agreement came on
the heels of an article in Thursday’s Caymanian Compass about government’s cash
flow problems. Government is already near the limit of a $66 million ‘overdraft
facility’ OK’d by the UK government for this year’s budget. The facility
operates as a transitional loan that allows government to cover expenses during
lean months. In the past, the Cayman Islands government has used borrowing to
cover those monetarily sparse times. Mr. Bush’s answer is that the government
is going to have to live within its means. But we hear some government
departments have already spent more than half their allotted budget for the
2012/13 fiscal year, less than five months into it. At the end of the day, the
unnecessary spending by the government has to come to a stop. It seems the UK
will do all it can to make us toe the line.