Premier Wayne Panton has assured civil servants they will not lose their jobs or have wages slashed, after last month telling public sector heads to help cut nearly $50 million from the collective budget.
“The country is not broke. People are not losing their jobs. People are not having their salaries cut,” he said on Radio Cayman’s ‘For The Record’ talk show with Orrett Connor.
Panton, who is also minister of finance, in August had sent an internal memo to chief officers asking them to find savings of 8.5% in forecast expenditure during the rest of the 2023 financial year.
However, the premier insisted on Monday, 11 Sept., this will not translate into job losses or reductions in salary, but will mean the civil service cannot grow at the same rate.
Panton said there are currently between 4,000 and 4,500 public workers with requests in for 1,100 more, which cannot be approved.
“We cannot have 1,100 new posts. Where would we put them, to begin with? I don’t know. That building is full,” he said.
The premier added the government must remain “as lean as possible” with current staff delivering services “as effectively and efficiently as possible”.
He insisted that he is proud of his cost-cutting memo and is not going to apologise for it, as a government should be prudent with its spending.
“We have the obligation to every single person in this country to make sure that we are good, strong stewards of the resources of this country,” he said.
“That they are applied as effectively as possible, they help the greatest number of people and achieve the best possible outcome for them, not just today, but going into the future as well.”
Prudent and efficient
In his memo, the premier had said, based on financial data from 30 June, the government was on track to exceed $1 billion in operating expenditure in 2023, with more growth in 2024 and 2025.
That call came as preparations continued for the 2024/2025 budget, due to be delivered before the end of the year.
At the time, he wrote that “hard decisions will have to be made regarding certain planned activities”.
In the radio interview, Panton said the cost-cutting measures will allow for money to become available for things like scholarships and social support for “people who really need it”.
“What I’m trying to do is trying to manage expectations, to put some pressure on the concept of being efficient, being prudent and not spending more than you really need to,” he said.
Chief officers should not be concerned that if they don’t spend what is budgeted, they will lose it, he said, adding, “that kind of perspective is irrelevant – they will get what they need”.
“So if you don’t have to spend that amount this year, don’t do it, just because you want to try to protect your budget,” the premier urged.
Panton spoke of ongoing financial challenges the Cayman Islands faces including healthcare costs which keep going up “astronomically”.
“We’ve got to find ways of managing that,” he said.
Meanwhile, some of the older schools need to be replaced and new ones need to be built, the premier added.
Warning signs
Last month, Opposition Leader Roy McTaggart expressed concern over the premier’s memo, saying that suggested level of cost-cutting was a “huge ask”.
Former Finance Minister Chris Saunders said he was not surprised to see the memo and that it should have been sent even earlier.
In August, the government published its unaudited quarterly financial report for the six-month period ending 30 June.
It said costs will continue to increase as more staff vacancies are filled and projects come online over the last two quarters of 2023.
“These will have to be diligently monitored to ensure spending is not incurred unnecessarily,” the report said.
The UK-implemented Framework for Fiscal Responsibility says Cayman should have enough cash reserves for 90 days.
The Strategic Policy Statement for 2024-2025 forecasts the jurisdiction skirting close to the minimum limit at 117.6 days in 2024, 101 days in 2025, and 90.1 days in 2026.
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