UPDATED: Premier presents US$2 billion fiscal package

Premier Alden McLaughlin announced on Friday a US$2 billion budget plan for the Cayman Islands featuring pay bumps for civil servants and increases in veterans and seamen payments.

The Cayman Islands government has proposed a US$2 billion spending plan for the upcoming two-year budget cycle which includes sweeteners for civil servants, seniors and veterans.

Premier Alden McLaughlin said in the Legislative Assembly on Friday that this two-year plan was the “biggest” fiscal package in Cayman’s history.

“This is a budget that gives a much-needed boost to older persons and the vulnerable in our community,” McLaughlin said. “It is a budget for families. It is a budget that will bring relief to commuters. It is a budget for opportunities as we bring to fruition the development of WORC [Workforce Opportunities and Residency Cayman] and continue to drive forwards the improvements [to] our education system.”

In his final budget statement before the 2021 general election and his last as premier, McLaughlin focussed on four key issues traffic, housing, healthcare and economic diversification.

He said CI$26 million will be allocated per year to cover healthcare costs for seafarers, veterans and medical indigents.

Increases and concessions

Contained in McLaughlin’s initiatives for the two-year budget cycle – 1 Jan. 2020 to 31 Dec. 2021 – was a 5% increase in cost-of-living allowances for civil servants starting in January. It also includes a $100 bump in veterans’ and seamen’s monthly payments, from $750 to $850, which will also take effect in January.

McLaughlin told legislators that increase will be followed by a further $100 rise in January 2021 to take total payments to $950 for those benefitting from the ex gratia payments.

As he focussed on the issue of the rising cost of living, McLaughlin zeroed in on the hardships he said senior citizens have been facing, especially those dependent on a fixed income.

As a means to ease that burden, he said, 14 fees or duties will be significantly reduced or waived for people over the age of 65.

“The package includes reductions in vehicle licensing fees, duty reductions for mobility scooters and wheelchairs, and reduced post office box rental fees. My own ministry will reduce work permit fees for caregivers of older persons and we will reduce import duties for older persons coming through the airport,” he said.

The expected revenue that will be lost through the concessions will total approximately $830,000, he said.

McLaughlin said government will also be extending its stamp duty concession for first-time Caymanian homeowners.

“The first $400,000 will be duty free regardless of the value of the home. This extends the duty reduction across the full range of likely first-time buyer properties in Cayman. It brings the benefit to more Caymanian first-time buyers as the $30,000 saving will now apply to all properties,” he said.

McLaughlin added legislation will be needed to effect that change.

He also said that the budget will complete government’s commitment to increase teachers’ salaries to a monthly minimum of $5,000.

Infrastructure and capital projects

McLaughlin said there will be increased efforts to deliver on improvements to the local road network to address traffic congestion.

“The planned extension of the East-West Arterial road, first to Northward and then through to Lookout in Bodden Town, has been brought forward into this budget period rather than being left until the next as had originally been planned,” he said.

He said capital projects, including the Integrated Solid Waste Management Facility, John Gray High School and the long-term mental health facility will be delivered in the upcoming budget cycle.

“The ambitious capital projects we have set out [are] being paid for from revenue without any need to borrow,” he said.

Touching on the cruise berthing and enhanced cargo facility, the premier said there are no budget allocations planned for 2020/2021.

He pointed out that the budget will include allocations to fund the next stage of the courthouse redevelopment project which includes facilities for the Court of Appeal in the old Scotiabank building, a new six-storey court building and a renovation of the existing courthouse to provide additional courtrooms.

“The budget also takes forward the much-needed work on a new prison facility to replace the existing male and female prisons at Northward and Fairbanks to provide modern facilities for all types of offenders in a single location,” he added.

Other initiatives announced:

  • Support for the National Housing Trust Government Guaranteed Housing Assisted Mortgage programme
  • Minimum wage review
  • Fuel market prices review
  • Doubling of Public Works Department apprenticeship programme
  • Focus on implementing new governance structure for local schools
  • New Sunrise Centre
  • New special needs residential facility for children in care
  • New fire trucks and equipment
  • New vessels for Customs and Border Control