Cayman Islands Opposition Leader McKeeva Bush has accused the Progressives-led government of “misleading” the public with the release of its 18-month budget for the upcoming fiscal year.
Mr. Bush told the Legislative Assembly on Friday that it was difficult to compare the projected results of the current financial year, which ends on June 30, with government plans for the upcoming 18-month period, which ends on Dec. 31, 2017.
“It’s not a good process,” Mr. Bush said.
The opposition leader noted that there had been $100 million-plus operating surpluses recorded in each of the last three government budgets, but in the 2016/17 spending plan the surplus had dropped to $48 million over the 18 months covered.
Finance Minister Marco Archer has explained that the decline was due to the budget encompassing two lower revenue-earning periods during the tourism “slow season” – typically between August and December – and only one “high earning” period – between January and April, when government collects most of its annual fees.
Mr. Bush asked why government did not put out a 12-month surplus figure for the first year of the upcoming budget.
“Isn’t it that the surplus would be greatly reduced and is therefore not being shown?” he said.
Mr. Bush said, by his review of the budget, government has spent about $36 million more between its first budget in 2013/14 and the 2015/16 budget.
“The reality is that as revenues have grown, they have allowed expenditure – as much as they say they have cut back – they allowed it to grow once again,” he said.
Mr. Bush said new fees and taxes implemented by the former United Democratic Party government between 2010 and 2012 were needed to stave off the last round of overspending by the previous Progressives administration in 2005-2009. That government’s 2008/09 budget ended with an operating deficit of $81 million.
“These revenue measures were very unpopular at the time,” Mr. Bush said of increases to work permit fees and added fees to the financial services industry. “Did we want to implement them? No.
“They have not rolled back any [of] these fees,” Mr. Bush said. “They have not rolled back any work permit fees, which we acknowledged should only last until the economy and finance turned around.”
The administration has noted a number of tax breaks for consumers and businesses in the past three years, including a 2 percent reduction in duty for licensed importers, reduction or elimination of trade and business licensing fees for small and micro-businesses, and a 50 cent per gallon reduction in stamp duty charged to Caribbean Utilities Company on the import of diesel fuel.
Minister Archer estimated the tax breaks had cost the government close to $30 million annually in revenues.
Mr. Bush said the “targeted” tax cuts did not appear to be making an impact for the average Caymanian.