4 percent pay raise for Cayman Islands civil servants

Wage increase will start mid-2015



Cayman Islands civil servants will receive a 4 percent pay increase starting July 1, 2015, Premier Alden McLaughlin announced Wednesday during the government’s presentation of its annual strategic policy statement.  

The 4 percent pay hike comes at a time when government is facing some “early budget pressures,” according to the premier.  

However, Mr. McLaughlin said government decided it wanted, at the very least, to give back to public sector workers their 3.2 percent cost of living pay increase that has been granted twice and taken back twice since 2008.  

“We would like to have given more, but that’s all we can afford,” Mr. McLaughlin said.  

Government workers have not received a pay increase since 2006, and during that time have watched their purchasing power decline by some 11 percent, based on inflation during the period, Mr. McLaughlin said.  

“This situation has caused a fall in the living standards of many Caymanians who have chosen to serve their country through a career in the civil service,” the premier said.  

With a projected operating surplus for the current year standing at more than $120 million, it may sound hard to believe that Cayman’s government couldn’t afford a larger pay hike. However, Finance Minister Marco Archer said many of the financial management requirements set out for local government by the United Kingdom’s Foreign and Commonwealth Office still have not been met. 

The deadline for compliance with those principles set forth in the Framework for Fiscal Responsibility with the U.K. looms at the end of the next government budget year, June 30, 2016.  

Most problematic among the requirements, from Cayman’s perspective, is that the territory’s cash balances at Dec. 31 of each budget year meet a minimum 90 days’ worth of government’s operating expenses. December is typically Cayman’s lowest cash point, since fees from financial services companies and tourism-related revenues don’t start coming in until January.  

“Cash is king,” Mr. Archer said.  

Mr. Archer said a cash balance of 96 days would be achieved by Dec. 31, 2015, under the current budget plan. He expects government to fully comply with all the requirements of the fiscal framework by June 2016.  

“Budget pressures” referred to by Mr. McLaughlin included much higher-than-anticipated spending for care and housing of Cuban refugees who arrive illegally in Cayman. Also, the government has lost $5 million in concessions and waivers on import duties from incentive programs that were expected to continue in the next budget.  

On the plus-side, both Cayman Airways and the Port Authority were reporting “positive early results,” the premier said. Also, earning from government stamp duty on land transfers and from permanent residence fees have increased so far in the current budget year, he said.  

No borrowing  

The three-year plan set out in the government’s strategic policy statement envisioned that the Cayman Islands would not borrow any money through June 2018, Mr. Archer said.  

However, the Cayman Islands still needs to set aside some cash for public projects and debt repayment, the finance minister said.  

Capital project spending would be limited to $47 million during the government’s 2015/16 budget year and to $57 million in the 2016/17 year, he said.  

The largest capital investment project over that period is some $15 million to “fast track” the Owen Roberts International Airport redevelopment on Grand Cayman.  

In addition, payments to reduce overall public sector debts would put the total debt held by the government close to $500 million by June 2018, Mr. Archer said. That would represent a reduction of 35.7 percent in public sector debts since 2011, he said.  


  1. I am very sure the Civil servants need this raise. However I watched the oil price dropped a month or too ago but there was talk yesterday that it will rise again.
    So to those who will get their 4% raise in July next year, I only hope that in July 2017 they will not be hearing that it has to be taken away again.

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