Budget changes not until October

McLaughlin says ‘no layoffs’

Public sector employees and private companies shouldn’t expect any sweeping financing changes out of the newly-elected government for the first four months of its new budget.  

Cayman Islands Premier Alden McLaughlin said Saturday that he received approval during his trip to the United Kingdom last week for temporary financing of a four-month interim budget, that will take effect on 1 July once it’s passed by the Legislative Assembly.  

That budget, backed up by short-term or transitional borrowing, will only give the government spending authority through 31 October at the latest, at which time the local government will have to have its full-year spending plan approved.  

“I fully expect to have to meet with the minister [referring to the UK’s overseas territories minister, Mark Simmonds] and the technical people in August or September again,” Mr. McLaughlin said. “Once we get this four-month budget in place, the real work starts. 

“We’re not making any policy changes for this four-month period.”  

Premier McLaughlin did state last week that one policy that his administration would not support is layoffs within the civil service.  

Minister Simmonds, who met with Cayman Islands officials on Thursday, said he would like to see an overall reduction in the Cayman Islands public sector debt, which now stands at more than $700 million – including both central government and statutory authorities’ debts.  

Mr. McLaughlin also noted that government would consider privatising government-owned companies to a certain extent, as long as that could be accomplished while safeguarding local interests. Mr. Simmonds agreed to provide technical experts who could advise Cayman on public/private funding packages that could provide necessary capital, without long-term revenue consequences. 

According to the most recent estimates, lawmakers will have some financial “cushion” to work with, but not quite as much as first forecast.  

The Cayman Islands government is expected to fall $31 million short of its projected operating surplus in the current 2012/13 budget year, according to a report issued late Wednesday.  

That drop from a budgeted surplus of $82.3 million to a now-projected surplus of $51.1 million is entirely due to a decrease in expected revenues for the year.  

The Cayman Islands central government service has managed to cut $600,000 from its operating costs, according to projections through to the end of the budget year on 30 June.  

According to estimates in the pre-budget financial report, government has slashed personnel costs from the original budget by nearly $7.5 million due to “attrition and recruitment reasons”.  

The personnel budget for the 2012/13 is still more than $10 million higher than it was the year before. Those projected cost cuts were balanced out by higher healthcare costs. “Increased utilisation” of the Health Services Authority will cost an extra $4.2 million, while cost of providing medical care at overseas institutions went up $8.1 million from the original budget. 

Mark-Simmonds--Alden-McLaughlin

Mark Simmonds, the UK’s overseas territories minister, and Cayman Islands Premier Alden McLaughlin, right, meet last week in London. – Photo: Submitted
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