More than a year after the unveiling of the landmark 2014 Ernst & Young consultant report on reducing the size and cost of the Cayman Islands civil service, Premier Alden McLaughlin, Deputy Governor Franz Manderson and other leaders have settled on an unambitious to-do list that neither reduces the size of the civil service nor reduces its cost.
Privatizing government services was the heartbeat that was to drive down the cost of the government payroll. None of that apparently is now even being seriously contemplated.
At this newspaper, we had nothing but high praise for this government which, after all, commissioned the EY Report. We especially singled out Premier McLaughlin for his courage in putting into motion a politically risky plan that would, finally, address the oversized and underperforming civil service.
So much for that.
To keep things simple, our government has grown so large, so bureaucratically burdensome, and so expensive that Cayman cannot support its own creation. As our annual budget edges up toward the region of a billion dollars — an outlandish amount for a country of 55,000 residents — there is little money, after payroll and subsidies for government-run businesses, for the provision of “essential public services.”
Capital projects are a whole separate matter. With annual revenues in the hundreds of millions of dollars, the country can’t find $20 million to build jetways at Owen Roberts International Airport. There is no money to address the landfill miasma and certainly no “public” money to finance the downtown cruise ship docks. As we pointed out recently, charitable donations are funding ambulances for the hospital and even supplies for our schools. A country as wealthy as Cayman should never be this poor.
John Harris, a commenter on our website (caymancompass.com), wrote this:
“The authors of this [EY] report, like many others, have fallen into the classic error of mistaking the true role of the civil service. It does not exist to get anything done (obviously); rather, it exists to provide employment for voters. In the circumstances, hell will freeze over before any government makes any meaningful cuts.”
We fear Mr. Harris has it exactly correct.
Even so, if the Cayman Islands government will not privatize anything or substantially reduce its own payroll and overly generous “benefits,” there is another path forward (albeit an unpalatable one for many), and it’s growth and development.
In fact, intense development and increased immigration will be necessary to grow the tax base to a level that can meet the revenue demands of a ravenous (and retiring) population of government workers. Just last week this newspaper published the eye-opening headline that, as of today, the country is carrying a $1.4 billion health and pension liability for civil servants and their families.
The government’s reluctance to engage in real civil service reform appears in conflict with its own protectionist policies on immigration, employment and permanent residence. The choices are straightforward: Either cut the size and cost of government or welcome and encourage economic growth.
Avoiding the former (which the government has just done by neutering the EY recommendations) necessitates the latter.
While we welcome tourists who come ashore via cruise ships and airplanes, those visitors are just that — visitors. In order to support the government that Cayman has already created, our country must take in more and more people — work permit holders and future residents — who will arrive on “one-way” tickets.