Government and opposition politicians clashed over government finances in the recent sitting of Parliament’s Finance Committee as questions were raised about how a projected $60 million deficit could turn into a $10.3 million surplus forecast in just two months.
Finance Minster Rolston Anglin was challenged by Kenneth Bryan, deputy leader of the opposition, and former premier Juliana O’Connor-Connolly on how the forecast had changed so significantly, especially with government requesting an additional $108 million in spending during the meeting.
Deficit debate
The question of whether the Cayman Islands will end 2025 in the red or in the black has been hotly debated for months now. Initial predictions of a $54.7 million surplus were later changed to a $26.2 million deficit forecast by the Pre-Election Economic and Financial Update issued in April, before the election on 30 April and later superseded by government predictions in July of a $60 million deficit.
Bryan asked what cost-cutting measures the administration had made, between the $60 million deficit figure first being revealed and the current forecast which, Anglin announced at the start of the meeting, was now a surplus of $10.3 million.
In response, Anglin said that after the election the ministries and portfolios were asked about the state of their finances on 15 May and “it was at that time that, based on that round of consultation, an estimated $60 million deficit could have resulted, hence the reason the government took the decision that we had to take some drastic action … like a soft [recruitment] freeze because we needed to ensure that that result did not actually occur.”
He added, “And let me just say, I never said publicly there would be a $60 million deficit. I spoke to the PREEFU [Pre-Election Economic and Financial Update], the $60 million deficit, I clarified the point … because you had brought it up, because it was stated on Radio Cayman, I clarified the point of what the genesis of that was. I never actually came out and said that publicly.”
He continued, “I was not confirming that to be the government viewpoint.”
The $60 million deficit figure seems to have been first mentioned by former premier and government member Wayne Panton during a Radio Cayman appearance at the end of July.
In the Radio Cayman interview, Panton said: “You know, we’re looking at around $60 million in deficit for ‘25 so we’re struggling to work through that. And the answer is not going to be easy. I mean, we have half a year to either find cost savings or find cost savings and revenue measures to offset some of those costs. And the challenge is that’s, it’s not just ’25. We also have ‘26 projected to be $44 million in deficit. And you know, this is a result of the leadership that was occurring over right at the end of ’23 and across ’24, unfortunately.”
Offering an explanation of what he said on Radio Cayman, Panton told the committee, “Those comments, if you go back and check the transcript, said that there were indications or that the modelling at the time was showing a possible $60 million deficit, which is exactly what Mr. Chairman has already outlined. There was no concrete statement that there would be a $60 million deficit.”
In response, Bryan said, “I don’t think that it was appropriate for you to give that anxiety to the country. [Panton is] a member of the government. To say on public national radio that the models that we’re running are projecting around a $60 million deficit, because people believe that. It made the headlines. Nobody jumped out and said, “Oh, no, no, no, no, no, no, no. That was just a little test run.”
He added, “You need to explain to the House where you went from $60 million to now projecting to be a $10 million surplus, because what it looks like and what people are saying, is the government has tried to make it seem like it was worse than what it was, to be able to come back at the end of the year now and say, “Look, boy, we did a surplus and we did so good,” because I’m still waiting for the list of things that you stopped from happening.”
The day-long meeting saw a total of $108 million in additional funding approved by the committee, including money for the coast guard, schools, pensioners, healthcare, waste disposal, Cayman Airways, Cayman Turtle Centre and Radio Cayman.
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