Opposition Leader Roy McTaggart has called for a “shift in direction” of the United People’s Movement government’s expenditure plan saying that its “spend, rather than save” choices in the 2024-2025 budget will have serious economic implications for the Cayman Islands.
McTaggart, in Parliament Monday at the start of the budget debate, said the UPM’s $2 billion budget, which includes $150 million in new borrowing, will bring additional strain to an already burdened community battling with inflation and cost of living challenges.
“Our commercial banks will be salivating at this opportunity to bid on providing new financing to the government. Caymanians will be paying for the excesses of those on the government benches for decades,” he said.
‘Saddling future generations with the bill’
Calling for a “course change,” McTaggart suggested Premier Juliana O’Connor-Connolly end the “raise it, spend it” approach.
“We need to stop spending on vanity projects. We need to come back to living within our means. To do that, the country needs a much clearer focus on a smaller number of priorities, things that will have the biggest impact on our people today, and that will make the biggest difference in the long term,” he said.
Setting out that the UPM has continued the PACT administration’s policy of borrowing, which included drawing down on the $349 million line of credit, McTaggart said these actions will leave Cayman with half a billion dollars of debt by the end of this term in office.
“The willingness of the PACT and now the UPM to borrow to finance its capital spending plans is a mistake that is saddling future generations with the bill for their grand plans while also creating a free-for-all when it comes to operational expenditures,” he said.
While he said the Opposition is willing to give Premier O’Connor-Connolly some leeway since she is new to the office, he added that the signs are “not encouraging” that there will be a new way forward when it comes to government expenditures.
“The $150 million in the next two years will become much more than that, as projects that have only just started in the current period are taken to completion. The premier needs to tell the country how much would be needed to be borrowed to fully deliver all the projects in the UPM’s list,” he said.
Pointing to infrastructure, McTaggart said the absence of the revised national development plan is glaring and is now “urgent” in the face of rapid population growth.
Cayman, he said, has moved from a position of 100% of capital expenditures being financed by revenues to one that is almost 100% financed by borrowing.
Issues impacting Caymanians yet to be addressed
McTaggart said O’Connor-Connolly’s speech Friday failed “to understand the challenges we face” and underestimated what was needed to “rebuild a strong economy that benefits all of our people”.
He put forward that a “course correction” was needed from the excessive spending over the last two years under the PACT administration.
He said the budget was crafted on politics, as the UPM administration has made decisions to bring forward funding allocations for some things and not for others, “to increase the budgets in some areas and not in others, to spend rather than save, and those are political choices”.
McTaggart said the government must focus on delivering on key areas affecting the jurisdiction and prioritise overcoming the ongoing impact of the cost of living crisis, reducing crime and the fear of crime and enabling better, more affordable, access to housing.
He suggested temporarily reducing to zero the duty paid by utility providers on fuel, the duty on cooking gas, and fuel duty at the pumps.
“Such a reduction through 2024, coupled with a freeze for the year on the Water Authority water rates, would bring immediate relief in the monthly bills, which are currently causing real hardships for many, targeting those costs that are continuing to increase the fastest, and creating breathing space for families,” he said.
When it comes to crime, he said, the strategies must focus on building out the CCTV system and developing a proper anti-gang plan.
“The most significant immediate priority needs to be more direct action by the police service to disrupt criminal gangs, target prolific and persistent offenders, and achieve more arrests and convictions,” McTaggart said, as he expressed confidence in Police Commissioner Kurt Walton.
‘Absence of priorities’
On the UPM’s plans to raise fees and duties, the Opposition leader said the premier had not shared what those increases would look like, only claiming they will bring in some $52 million in new revenues in 2024 and $18 million in 2025.
“These fee increases are only necessary to fund the excessive spending plans of ministers because of the absence of setting priorities and ministers just thinking they can go on another spending spree with other people’s money. This is indeed nothing more than a continuation of the PACT government ‘raise it and spend it’ strategy,” he said.
Government, he said, has benefitted from the increase in inflation and the unexpected “windfall” should be used to help the Caymanian public.
“It is essential that the government does find an opportunity to provide further duty reductions to the Sister Islands, to help lower costs for our people there, including the small businesses fighting to survive,” he added.
Clear direction on Immigration, labour needed
McTaggart picked at the premier’s position on immigration reform saying that a clear plan on what this will look like is needed.
Population growth, he said, has had an impact across Cayman and he urged the premier and border control minister to “think deeply” before bringing forward legislation to reform immigration.
“We need to get it right,” he said.
O’Connor-Connolly, in her first official statement on immigration reform on Friday, hinted that changes on obtaining citizenship in the Cayman Islands may be on the horizon. She stated her administration does not accept that “everyone who upon arrival should be on an automatic pathway to citizenship”.
The Opposition leader put forward that there has been a “freefall” in productivity in Cayman and that, too, carries economic implications.
“This decline in productivity is a glaring economic setback… it really represents a significant failure of the PACT administration,” he said, stressing that a change of direction was needed.
He said Cayman’s tourism industry is facing an “acute” problem and it is worsening as cruise calls drop.
The debate continues in Parliament.
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