Governor finds budget ‘painful’

Describing
the preparations of the 2011/2012 budget as “painful” and “stressful”, Governor
Duncan Taylor delivered the Throne Speech on Monday, which gives a first look
at some of the initiatives the government intends to undertake in the coming
financial year. 

The budget, which had originally been
scheduled to be delivered after Monday’s Throne Speech, has been delayed
because the UK government would not sign off on the budget and has called for a
cut in Civil Service personnel costs, which the Cayman Islands government is
reluctant to do. Premier McKeeva Bush has refused to cut salaries or benefits
of civil servants, saying other areas must be found in which to make cuts. 

Governor
Taylor said Cayman, like other countries, was having to take “difficult
decisions to cut costs, in order to bring government finances back onto a
sustainable track”. 

“It is a
painful process,” he said. 

He said
Cayman continued to live beyond its means, spending more money that it earned,
but that a small surplus in recurrent revenue was expected in the coming
financial year. 

“The budget
setting process has been a challenging one, stressful and prolonged,” said Mr.
Taylor before thanking those who had put in long hours and hard work to prepare
it. 

“Government
had to commit to a three-year plan demonstrating incrementally reducing
expenditure year on year. We need to meet the commitments we have made. We are
on the right trajectory, but it is vital that we keep to the task: I am afraid
that means more tough decisions,” the governor said. 

The
three-year plan, agreed in 2010, between the Cayman Islands Government and the
UK Foreign and Commonwealth Office required Cayman to enact measures to reduce
its public debt and help balance its yearly budget so that the government does
not continue to incur operating deficits.  

The
three-year plan covers Cayman’s 2010/11, 2011/12 and 2012/13 budget years.  

Speaking
after Mr. Taylor’s speech, Premier Bush said he hoped to present the budget
next week. 

For more on
this story, read Tuesday’s Caymanian Compass.