The government will propose a “range of measures” during this spring’s budget process aimed at cutting operating fees for local small businesses.
Premier Alden McLaughlin didn’t specify what fees might be reduced, but he mentioned legislative changes regarding new frameworks for directorships, trade and business licenses, liquor licenses, local companies control licenses and exempted limited partnerships.
“We recognize that small businesses are the lifeblood of the economy and we intend to support them,” Mr. McLaughlin said Thursday. “We know these things must be done to help our economy not only survive, but grow.”
Plans for greater protection of trademarks and copyrights held in the Cayman Islands, as well as the establishment of e-government initiatives for the Immigration Department, Lands and Survey, the Planning Department and the Judiciary will be proposed in the coming budget year. Government intends to appoint a director of e-government initiatives in the near future, the premier said.
Government may be feeling confident in its ability to reduce certain fees to the private sector after seeing budget figures for the first seven months of the 2013/14 fiscal year.
According to Mr. McLaughlin, as of Jan. 31, the government’s account was “in surplus” by $80.5 million. That figure is based on revenues of $385.9 million and spending of $305.4 million in central government between July and January.
The revenue figures were $11.2 million higher than expected, while spending was $9.3 million below what was anticipated, Mr. McLaughlin said.
“We appear to be on track to meet or better the projected $100 million operating surplus for this fiscal year,” the premier said.
Central government’s outstanding debt on Jan. 31 was $559 million. Recently, Finance Minister Marco Archer has noted plans are under way to reduce that to less than $470 million by the 2016/17 financial year.
The Cayman Islands recently received an Aa3 bond rating with a “stable” future outlook.
“In our part of the world, this is indeed a truly enviable rating,” Mr. McLaughlin said.
Despite heartening short-term budget numbers, Mr. McLaughlin acknowledged Thursday that major and permanent changes were on the way, starting in the next budget year, for the Cayman Islands civil service.
The premier said previous government policies of hiring freezes, attrition and doing “less with more” has led to a negative impact on the services government provides.
“Eventually, vacant posts will need to be filled,” he said. “The current situation with the fire service is an obvious example of this.”
A recent review of fire department staff found an agency reduced in numbers that was being required to cover a more densely populated area, leading to big payments for overtime and accrued vacation that must be paid by the government. The Cayman Islands Fire Service has lost more than three dozen employees through attrition, including retirement, over the past three years, according to Acting Chief Fire Officer Rosworth McLaughlin. That has left fewer personnel to cover stations in George Town, West Bay and Frank Sound, in addition to firefighting duties at the airport.
What has occurred over the years, according to fire officials, is that personnel were stretched too thin, accruing overtime pay and additional compensatory vacation time to cover staffing at the various stations. That has left the government with a bill of between $500,000 and $1 million in overtime or compensatory pay in the current financial year.
Premier McLaughlin said government needs to stop making “temporary” budget reductions and reconsider the overall size of the civil service.
“The reality is that, if government is to significantly and permanently reduce its head count … government is going to have to hive off some of the services it currently provides to the private sector,” he said. “We are examining what agencies and services could possibly be privatized. There are no sacred cows.
“The only criteria is that what is done is in the best interest of the Cayman Islands and its people, and that the sale of the agency doesn’t wind up costing us more in the long run.”
The premier noted, as he has previously, that Cayman will depend heavily on private sector development for jobs in the coming years.
A number of economic development projects were noted by the premier in his address to the Cayman Economic Outlook:
Health City Cayman Islands, which opens Tuesday in East End and which is expected to contribute a 2 percent to 3 percent increase in economic growth.
Cayman Enterprise City/the Special Economic Zone has now registered more than 100 companies, resulting in an estimated $15 million direct impact on the local economy in the lpast two years.
Construction of the new Kimpton Hotel on West Bay Road is scheduled for completion by 2016. A new hotel on the old Hyatt grounds and the planned expansion of the Beach Suites hotel on Seven Mile Beach are all forecast in the medium term.
A $360 million planned development in Frank Sound known as the Ironwood Community will include a golf course, residential communities and commercial properties. An important part of that development would be the extension of the East-West Arterial road from Newlands to Frank Sound. Mr. McLaughlin said government would not spend any money on that development, and that the private sector company involved would pay for it in exchange for certain import duty concessions.