Cayman wants overdraft extension, police funding

The Cayman Islands has asked the United Kingdom government for permission to extend its overdraft borrowing facility from $15 million to $30 million starting in February, according to Premier Juliana O’Connor-Connolly who spoke about the issue at a press briefing Thursday.

In addition, Mrs. O’Connor-Connolly said local officials had asked UK Overseas Territories Minister Mark Simmonds for permission to spend additional monies – outside the agreed 2012/13 budget – for various law enforcement purposes. She did not specify how much funding or the specific policing purposes for which government needed money.

With regard to the overdraft, which functions as a temporary borrowing facility to provide sources of revenue in anticipation of government earnings coming in later in the year, Premier O’Connor-Connolly said government revenues had been quite robust since the start of January. However, she said a few new revenue measures proposed by former Premier McKeeva Bush had not yet been put into place and so earnings from those had not yet been realised.

Mrs. O’Connor-Connolly said the remainder of those measures, including new legislation regulating Cayman Islands fund directors, should be put in place shortly.

According to government Budget and Management Unit officials, Cayman has the ability to go into an overdraft position of up to $66 million between 1 July, 2012, and 31 January, 2013. That means government can borrow up to that amount to cover short-term expenses until the higher-earning revenue months of the year.

“The proposed overdraft facility in the budget is simply a Treasury [Department] cash management tool,” Budget Management Director Ronnie Dunn stated in an e-mail explaining the situation last year. “It is necessary due to the seasonal nature of our revenues.”

Cayman gets most of its revenues from the financial services industry and the tourism industry during the first four months of the calendar year, January through April. However, the territory’s public sector budget year begins on 1 July and ends on 30 June.

The Cayman Islands government had placed an additional overdraft facility – or short term borrowing measure – of $15 million in its budget with availability between 1 February, 2013, and 30 June, 2013. Mrs. O’Connor-Connolly’s request would push that maximum amount to $30 million.

The UK had not agreed to that request by Thursday afternoon.

There is no long-term borrowing contained in the 2012/13 government budget, indeed the UK has forbidden that for Cayman until after the 2015/16 budget – four years from now.

That means government intends to pay back the amount of the initial $66 million overdraft borrowed when cash receipts from the high-earning revenue months of January through April start coming in.

Juliana O Connor-Connolly

Mrs O’Connor-Connolly
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9 COMMENTS

  1. Let me predict:

    The UK will grant the extension on the Overdraft, and the 5 will have ‘great success’ at their visit to London and the 5 will run as a Team.

    The games some of these Politicians play with the People is amazing.

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  2. Is planning something that our politicians ever think about. A budget is about the future and were now talking 15 Million. What has happened to cause this Tsunami. Theres only 7 dwarfs. i wonder which one is Dopey. Never mind, I already know the answer.

    These politicians should be tarred and feathered and spare no cost doing it.

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  3. Police funding again? Why? Does the new UDP have to finish hiring their unemployed Jacan officers that the former UDP planned to hire? We know that there is no accountability of officers, unless born Caymanians, so why should we keep hiring when there is no major improvement in decreasing crime?

    I haven’t heard any candidates state a willingness to decrease spending and size of CIG, what a mess.

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  4. When is the Cayman Islands Government both elected and administrative going to learn that the budget is the maximum money you can spend in a year and everyone should be trying to spend less than predicted.

    Sorry the new fab 5 is still the same as the UDP we have had for nearly 4 years. if they had found their courage even two years ago we would not be in the mess we are today. You are not kidding me that you are any thing else than that.

    As for senior civil servants it is time you ran your departments like a business. Forget borrowing and work within your means and the law.

    Only provide the core services everything else the public can pay for themselves and you know what they can probably live without it when they have pay for it.

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  5. Cayman goes crying to mother again.
    Too bad that mother has run out of milk.

    When will the child learn to take responsibility for its own actions, or will it always remain an irresponsible child?

    Police funding? Why do we not start by dumping the very expensive and un-needed police air operation?
    Or how about dumping their large, air conditioned cars for much smaller economical ones?

    Why not take a strong look at each Government ministry to see if each one is still necessary, what it has accomplished, and how much it has spent to accomplish it?

    It could be than no one in Government is interested in cutbacks, or increasing efficiency.

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