Gov’t says public authorities bill is on the way
The Cayman Islands Maritime Authority was made an atypical example of government authorities losing money at the public’s expense, during Wednesday’s opening session of the Legislative Assembly in Cayman Brac.
North Side MLA Ezzard Miller said his review of government financial records over the past five years indicates the Maritime Authority has sustained an operating loss of about $1.3 million, which, when combined with what he termed government subsidies to the authority, led to a net loss of more than $7 million between 2009 and 2013.
“We’re just simply going to accept the fact … and nobody in parliament reads it or is concerned about it,” Mr. Miller said during a parliamentary debate over the Maritime Authority’s 2012/13 financial statements. “No questions have been asked … they all [referring to legislators on the government side of the aisle] seemed to have shocked looks on their faces that we have lost over $7 million by this authority in five years.
“The board … and this ministry [of financial services] has to take control of this situation.”
Mr. Miller compared the Maritime Authority to Cayman’s general registry, which has fewer employees and far more registrations, and asked why that arrangement should not be changed.
The North Side member asked lawmakers to reject the financial report from the authority until it reported what it intended to do to turn around the loss-making situation.
Financial Services Minister Wayne Panton said he thought the North Side MLA’s comparisons between the Maritime Authority’s “small loss” of about $377,000 in 2012/13 and the general registry’s significant profit for that year were misleading.
Mr. Panton also denied that government paid the Maritime Authority any “subsidy” and said rather the government was paying for services rendered.
Finally, Mr. Panton noted that the local shipping registry provides many “indirect benefits” to the Cayman Islands economy that cannot necessarily be shown on a balance sheet.
“It is not appropriate to suggest that you can simply look at the value of the Maritime Authority as a loss of $377,000 … because the indirect values can be considerably greater.”
The motion to reject the financial statements report from the Maritime Authority failed and the document was accepted by the assembly.
East End MLA Arden McLean said the financial losses of the Maritime Authority were just a small part of a much larger problem, which involved government authorities, such as the Cayman Turtle Farm and Cayman Airways, losing millions of dollars each year.
“These authorities, in many instances … and I don’t mean to be disrespectful … they are a runaway money train,” Mr. McLean said. “And we, the legislators, continue to endorse it and take the blame.
“There may be a good, legitimate reason [for the Maritime Authority losses], but we need to know why.”
Premier Alden McLaughlin, while supporting the authority’s work, believes it can be made profitable again. He noted that Cayman has had a shipping registry for more than 100 years, and said the larger issue has to do with government stepping in to apply greater control and regulation of statutory authorities and government-owned companies.
That issue would be addressed by the tabling of a Public Authorities Bill in the Legislative Assembly possibly later this year, Mr. McLaughlin said.
“No government in the past has actually had the courage to [bring forward this bill] because of the push-back it has received from those in the public authorities,” the premier said. “We are going to press ahead with it. At present, all members [of the Legislative Assembly] indicate that they do support the bill.”
Going hand-in-hand with public authorities reform, Mr. McLaughlin said, is a plan to privatize “a number of government entities and services.”
“That is something that this government is working keenly on,” he said. “I hope that will not change when some of the sacred cows are put up for auction.”
The premier also added a clarification, based on Mr. McLean’s debate, that Cayman Airways would not be one of those government companies considered for privatization “at this stage.”