Over the next year, the Cayman Islands government is allocating about $20 million on monetary and healthcare benefits to more than 1,000 retired seamen, military veterans and their widows. That works out to more than $20,000 per beneficiary, per year.
We recognize that Cayman has made a conscious effort to honor and support our country’s seamen, whose remittances were Cayman’s economic life support for many decades before the explosion of tourism and financial services, and our veterans, who served to protect our way of life. However, in any context, $20 million per year is a considerable amount of money.
For example, $20 million per year is equivalent to how much the government gives to the Cayman Islands Monetary Authority. It’s more than the government spends on the Cayman Turtle Farm, or on local and overseas scholarships for Caymanian students, and it’s nearly as much as the government subsidy for Cayman Airways.
Given the significant expenditure on seamen’s and veterans’ benefits, it is concerning how unclear members of the Legislative Assembly’s Finance Committee appeared to be on the specifics of the healthcare program. That observation is not necessarily a criticism of those lawmakers. We, too, find ourselves squinting at the blurry figures.
As we reported on the front page of Thursday’s Compass, the seamen’s and veterans’ benefits program is actually composed of several different programs — with the buckets of money including funding for CINICO premiums (about $7.5 million per year), specialist healthcare coverage ($6.3 million per year) and monthly “ex-gratia” payments for seamen and veterans ($10.5 million per year).
While those projected dollar amounts have been presented down to the decimal point, the number of individuals receiving those benefits are not so precise, with budget documents presenting ranges of individuals who might take advantage of the benefit. For example, “1,300 to 1,355 seamen and veterans, widows and dependents” are expected to use the tertiary healthcare benefits over the next 18 months, and “between 950-1,060” seamen and veterans receive the monthly stipend of $550.
Again, we understand and share the reverence our country has for former seamen and military veterans. We’re also aware that for politicians the notion of tinkering with benefits for “widows and dependents” is almost an unthinkable thought.
Regardless, whenever our government deigns to redistribute $20 million in taxpayer funds, (or $50 million for social welfare benefits, or, indeed any amount for any purpose whatsoever), it is imperative that proper financial controls be in place.
From a broader perspective, we continue to urge caution in expanding government’s commitments to providing additional entitlement benefits, which, once in place, tend to grow rather than dwindle over the decades.
We’ll close with the opening paragraph of an article published in the April 2011 issue of The Economist:
“When Gertrude Janeway died in 2003, she was still getting a monthly check for US$70 from the Veterans Administration — for a military pension earned by her late husband, John, on the Union side of the American civil war that ended in 1865. The pair had married in 1927, when he was 81 and she was 18. The amount may have been modest but the entitlement spanned three centuries, illustrating just how long pension commitments can last.”