EDITORIAL – Government’s growth explosion

Our country faces a number of problems with “out-of-control populations”: in the sea – lionfish; in the trees – green iguanas; on the streets – roaming dogs; and within the halls of the Cayman Islands government – public servants.

As we reported in Friday’s Cayman Compass, from 2014 to 2015, the number of full-time public sector employees grew from 5,910 to 6,342 (an increase of about 7 percent).

Nearly all of that expansion, however, was not in “central government” – the various ministries, portfolios and departments under the direct control of Cabinet – but in statutory authorities or government-owned companies, which operate according to their own sets of rules.

From 2014 to 2015, there was practically no growth in central government. Meanwhile, in the statutory authorities and companies, employment grew from 2,331 workers to 2,751 (a mind-boggling increase of 18 percent).

When queried about the figures, Deputy Governor Franz Manderson said his responsibility is limited to central government. In brief, it’s not a problem he can solve.

That, at root, is what’s fundamentally wrong with Cayman’s statutory authorities and “government companies.” These entities blur the line between the public and private sectors, combining the worst of both.

The product is entities that have access to the bottomless public purse, but no accountability to either the electorate or market forces.

Politically, elected lawmakers have every reason to allow the authorities and companies to increase their payrolls (employed voters are happy voters; the more people dependent on the government, the better) and no reason not to – after all, they can always reference the “independent” nature of the entities.

But our eyes are too quick for that sleight of hand. Be it ministries, portfolios, departments, units, authorities or companies – the public sector is the public sector. The source of funding is the same: taxpayers. (You can take a dog, and call it a cat. But don’t be shocked or surprised when it barks and wags its tail.)

The basic paradigm of public sector employment – with authorities and companies growing far faster than central government – has been in place since 2001, when central government spun off its first quasi-public-private entity, the Health Services Authority. Over the past 15 years, central government employment has grown by 16 percent, while employment in the various authorities and companies has grown by 194 percent. Overall public sector employment has increased by 57 percent.

For purposes of establishing a benchmark, Cayman’s population from 2001 to 2015 has increased by 44 percent – meaning, growth in the public sector has outpaced growth in the population it’s supposed to serve.

Far more so than the number of individual public sector employees, our concern is what those employees represent – costs. It’s elementary arithmetic: Additional personnel equals additional costs.

As a party, the Progressives have a history of increasing both sides of that equation. During the first PPM administration from 2005 to 2009, central government employment increased by 16 percent, in addition to the exploding size of the authorities and companies. At the same time, the PPM maxed out the government credit cards on monuments such as Clifton Hunter High School and the Government Administration Building, as well as the IOUs they left on road projects.

And now, as the numbers show, for all their talk of budget restraint and good governance, the Progressives are at it again.

A characteristic of public sector employment is that, once you hire the number of civil servants needed to deliver the necessary services, then each extra hire constitutes a net negative to the country’s bottom line. With 6,342 employees now running the public sector for an island of 60,000 people, Cayman doesn’t need one single additional public servant.

Quite the opposite. Cayman needs to dissolve the public sector blockages holding back business, economic growth and private sector employment in this country.

The clogged arteries of our overpopulated government sector would benefit enormously from the bureaucratic equivalent of Liquid-Plumr. Preferably Industrial Strength.

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  1. There’s a very simple term for a situation in which well over 10% of the total population is employed in the public sector – unsustainable.

    If Mr Manderson has difficulty getting his head around that concept maybe this might help – when the money eventually runs out he can kiss his civil service pension (and any other state-funded retirement perks he’s looking forward to) goodbye.

    I just cannot believe that pressure to sort this mess out isn’t coming from within the public sector because at the end of the day they will be ones who suffer most when it all goes belly up. Maybe that’s simply a sad reflection on the calibre of our senior public servants?