Country not broke says LoGB

| 03/04/2009

(CNS): Even though the government is operating with abudget deficit, Leader of Government Business Kurt Tibbetts said today (Thursday) that the country is not broke and that the government is forecast to have a cash balance of $126.01 million at 30 June 2009, despite the predicted operating deficit for this financial year. “This is some $7.47 million more than anticipated in the original 2008/9 Budget,” he said. He explained that the revised 2008/9 forecast indicates that the government will be in compliance with all but one of the principles of financial management specified in the Public Management and Finance Law.

“The one area of non-compliance is the principle which requires the government to have an operating surplus,” he said. 

Tibbetts noted that the operating deficit was caused by the global economic crisis, which he said would require continued close monitoring and careful policy decisions to minimize the negative impact in the Cayman Islands. And because of that, to be compliant with the operating surplus principle would mean cutting public spending at a time when this would cause the people real hardship. “The government did not want to do that when people are hurting, so we will have to operate with the deficit,” he said.

He explained that when the 2008/9 Budget was presented to the Legislative Assembly in April last year it was projected that in the 2008/9 fiscal year the government’s operating revenues would be $528.21 million, its operating expenses $500.91 million and Financing Expenses of $13.44 million, resulting in a net operating surplus of $13.86 million. 

He said the supplementary budget presented in the Legislative Assembly last month, however, contained the updated financial forecast. “This captured the known and likely variances to the original budget based on actual circumstances from July 2008 to February 2009 plus projections through to 30 June 2009,” Tibbetts added.  

He said the $21.16 million reduction in operating revenues, the $15.19 million in Extraordinary Expenses and the $4 million increase in the cost of tertiary care at various overseas institutions as well as the $2.1 million increase in financing expenses have all contributed to the predicted deficit.

“The United States of America is the major source of business for this country and as a result any downturn in that economy will have a negative impact on the Cayman Islands.  No one knows with any certainty what the magnitude or severity of those negative impacts will be on the Cayman Islands. The budget was prepared on the best available information at that time,” Tibbetts explained.

Some of the revenue classifications that he said were forecasted to decline included Other Company Fees–Exempt Companies ($11.04 million); Motor Vehicle Import Duties ($5.48 million); Cruise Ship Departure Taxes ($2.45 million); Environmental Protection Fund Fees ($1.48 million); and Tax and Trust Undertakings ($1.29 million).  

The LoGB also noted that the extraordinary expenses incurred by the government in the 2008/9 financial year forecast to be $15.19 million included the government’s response to Hurricane Paloma, the Special Police Investigations and the Judicial Tribunal.  “These items are beyond the normal scope of the government’s normal recurring activities and could not have been reasonably forecasted at the time the budget was prepared in April 2008. Therefore, they have been classified as Extraordinary Expenditure. The Portfolio of Finance and Economics has advised that this is the correct treatment for expenditure of this nature,” he added. 

Print Friendly, PDF & Email

Category: Headline News

Comments (18)

Trackback URL | Comments RSS Feed

  1. Anonymous says:

    I would rather vote for a monkey than someone who answers to the leader of the opposition.

    He has nothing to offer a modern Cayman. He is a quarreler and possible quite dangerous to all of us

    if he is returned to power. As for Ellio, an opportunist if ever there was one.

  2. Daniel says:

    ….I will be voting UDP for a capable government made up of REAL people you can trust"

    I assume you are joking! If there is one thing the UDP has demonstrated clearly for all to see it is that it CANNOT BE TRUSTED. Why would would anyone want an authoriarain, vindictive government whose administration was clouded by "substantial reasons to suspect corruption", ….

    You are quire right in regards tothe UDP whose administraton was clouded by and the operative word is WHOSE  as in past tense. They have recruted smarter, well educated young men now who are more that capable of handling the job. And let’s not go to "They have no experience" if you look at the PPM you will find the same. If we elect the PPM we’ll get the same sad leadership and mis-management again, but the UDP has made a very smart change and is the Better Way Forward for ALL.

    • Anonymous says:

      Daniel,

      "Was" is not the operative word. As long as the UDP has Mac as the leader it does not matter how many new recruits there are since it is Mac’s party. If he could push around Roy and Gilbert as seasoned politicians do you really believe these greenhorns have a chance? Take a reality pill. What you will have is a  DISunited Democratic Party as those huge egos within it clash.

      It is obviously incorrect to state that the PPM do not have experience.  I do not see any evidence of mismanagement. This is all UDP propaganda.

  3. A PPM Relative says:

    As a relative to an elected PPM. Namely the Cliffords and Watlers, it really wouldn’t be surprising if the high school graduation was cancelled. Their kids and grandkids,who are still of school age are in private schools.Shows where our priorities lies. The PPM had good intentions when they took office but a few egos got in the way. 1.The majority of them refuse to listen to joe public’s concern.
    2.Chuck wants no one to tell him what to do and hates being criticed. Not even his own family can share their opposing view. His way or he gets a tantrum. Alden is the same. Eaisly frustrated with the public, but they can really fake it when needed to smile for the camera.
    3 They spent too much time trying to live like the “Jones” and not run the country with the exception of Mr. Eden, Ossie,Kurt and Arden. The rest once elected needed 2 homes, more cars, boats, airmiles.
    Now does it surprise you the graduation might be cancelled. Chuck and his were never home for their kids as they were always circling the globe, so why would he or some of the other members be there for yours?! Its not the entire PPM. Its individuals.Take time to observe. Slient rivers run deep!

    • A Watler and Not by Marriage! says:

       I personally take offence to the following "Chuck and his were never home for their kids as they were always circling the Globe"

      Maybe in future you should get your facts! before you get ready to castigate hard working people that have managed to accumulate what they have ,tru hard work and not hand outs.

      As to being never home for their kids ! who are you? It would be interesting to know if you were home with your KIDS! Grandmothers have always been around when kids were left to themselves!!!!!! You should thank God for your children GrandMother!

      We were brought up to look after our children! I don’t know about you!!!! But I can assure you that Chuckie and Emelita Children  were not left for their Grandmother’s to take care off.

      Yes! we do not have perfect children!  because we are not perfect ourselves! But before you ! and many others start to castigate people !you should look in your own closets for your own skeletons because I am sure you  all have alot.

      So take some advice from one who knows ! Get your facts before you continue to make a

      fool of yourself! 

  4. Jedi Dread says:

    The Country is not Broke.

    Just Everyone living in it.

    – Jedi Dread –

  5. Anonymous says:

    I will be voting UDP for a capable government made up of REAL people you can trust.
    If you keep an open mind and look at all of the candidates, one by one, you might come to the same conclusion.

    • Anonymous says:

      "I will be voting UDP for a capable government made up of REAL people you can trust"

      I assume you are joking! If there is one thing the UDP has demonstrated clearly for all to see it is that it CANNOT BE TRUSTED. Why would would anyone want an authoriarain, vindictive government whose administration was clouded by "substantial reasons to suspect corruption", who deliberately distortsthe truth in order to scare up votes? Are you expecting handouts? God help us all if they can back in power! The PPM is not perfect but they are decent, honest and hardworking. 

  6. Anonymous says:

    I suggest that Mr. Tatum look into the situation of the new Govt. building. I am hearing from folks involved in the project that there is a lot that we are not being told.

  7. Anonymous says:

    I listened to the Press Briefing yesterday morning and I found it to be very informative.  Thanks to LOGB (Mr. Tibbetts) and Minister of Tourism (Mr. Clifford) for doing an excellent job on eplaining and answering all questions by the press.  I think more of the Cayman people should listen to the Press Briefings every Thursady mornings at 10am on Radio Cayman and stay informed and not listen to the UDP. 

    On May 20th I will be voting PPM for a honest Government.

  8. Anonymous says:

    3 bullet points for everyone on fiscal management by the PPM:

    • according to reports the total public sector debt has grown by more than CI$400 million just in that past political term alone. and that equates to the PPM borrowing more than CI$100 million for each year they have held office.  
    • Even as it racks up unprecedented levels of debt, the current Government has refused to produce a full set of audited accounts for many public sector authorities for the past 4 years. The Government continues year after year to approve annual budgets without audited financial accounts.
    • Poor fiscal management means that the Government is not in a position to help stimulate the economy or provide any assistance to those in need in the face of the global economic crisis.

    come on guys…governments must be elected on their performance…and the PPM has failed in this area..

  9. Anonymous says:

    if the government has so much in reserves why is not paying its bills. there are suppliers out there comlaining about not being paid. why are they holding out>? surely there is no law that reuires that all of the cash stays in reserves beyond what is required (90 days worth of expenses)

    and why did we have to cancel high school graduation ceremony due to cost cutting?

    and why did we not get a fund esablished for the recovery of the sister islands as ms julie had requested.

    is this not just another case of the PPM taking way too long to take action when they are clearly in a position to do so?

    or is there some electioneering involved here?..

    • Enraged Caymanian says:

      What is this about graduation being cancelled for the high schools?  How can people truly beleive that the Caymans Islands are not broke when our government, by their own admission, can not give a graduation ceremony to our youth who have worked so hard to reach this milestone in their young lives.

       I know that if I had been deprived a graduation ceremony back in the day I would have been horribly disappointed.  Shame on the PPM for treating our youth in this fashion.

       

      XX

  10. Anonymous says:

    government in power have to accept responsibility when things go wrong. if another government was in office mr tibbets would have clearly pointed out the operating deficit was a disaster and that blaming the situation on hurricane paloma, indigents etc was just an excuse.

    fact is that every year the government gets the projections very wrong. they over inflate the revenues at the beggining, take appropriations down the road and we end up wherever we end up at the end of each year. and worse they calculate whether thewy have met the various ratios under the PFm using projections..thats right so they can always neet the ratios anyway.

    good leadership requires acting when you need to. not acting too late and simply saying "we acted a bti late". the quality of people lives are on the line here. the PPM has been very very slow to address a number of key issues and if they dont start to accept that they will not get my vote come may 20th (yes I am a supporter) 

    i can’t simply support them because kurt says "we are not great but at least we are better than the UDP" . i need much more than that i am afraid..

  11. Anonymous says:

    Yes, lets keep flip flopping from one party to another, change our policies and direction every four years so we ensure that we really do get nowhere.

    The current Government has embarked on many ambitious projects, most of which I believe are for the greater good of the people of these Islands and while I do think that some of these projects are being done somewhat grandioso style, the long term benefits will still be tremendous if they are seen through to their conclusion.

    To try to blame anyone here for the state of the global economy is a stretch people, be real. Also do keep in mind that change takes time to implement.

  12. Roy Tatum says:

     Mr Tibbetts is correct.  If the country was supposedly broke then the UK would have stepped in. I shall await to see whether the other news media houses report this story and report it correctly.  

    I will also wait to see whether they publish our Leaders response to the question at the press conference on the benefits of the new buildings – including how much the new Government Admin Building will save the country in leases and in ongoing costs (over $10M per year) by having all the government offices in a new green building – one that will be cheaper to operate than the Glass House is now.  and the new building will be paid for in 10 years.

    Couple this with the creation of a much needed George Town public  park on the space of the existing 

    Al in all despite the world economic crisis that is impacting the countrys revenues, and despite hurricane Paloma and Bridgers expensive fishing expedition ; and despite Mac fighting every effort of the PPM tooth and nail –  the PPM Government in many respects has had a successful 4 years.  

    The Caymanian people will keep the PPM at the wheel another four years.

    • Anonymous says:

      By the time we receive mcuh needed audited government financials and truly find out what kind of mess we are in – then, the UK might  still be tempted to step in .   Remember, we haven’t been able to review any  financials for the past four years.  Talk about transparency!!

       However, thank God for this election on May 20th, because we are going to replace the PPM with people who know what they are doing.  The UDP – go UDP! 

      Mac is the only leader who has the knowledge and fortitude to lead these islands which are going down a slippery slope at a fast  pace to its demise.   Even some PPM supporters now realize this as well.

    • Anonymous says:

      Mr. Tatum,

      It’s good to hear people like yourself expressing your support for the PPM on this forum because it seems like the UDP has established this site as a sounding board for their supporters.

      That being said I believe you are misguided in your support for the PPM. SOME of the infrastructure projects were heavily needed but anyone with common sense knows that it was not smart for this governemnt to try to tackle these projects all at ONCE!

      The fact is this current government is expecting to operate at a deficit, none of their infrastructure projects have even been completed, they were blind to the upcoming financial storm that is headed for cayman, they haven’t produced any exam results from our students, they were "misled" by commissioner kernohan, they’ve wasted millions of dollars on a police helicopter that no one has seen, no action on the employment law, not passing the national conservation bill…..

      EXPLAIN TO ME HOW THIS CONSTITUTES A SUCCESSFUL FOUR YEARS!?!?

      I am not a supporter for the PPM or the UDP, they have both failed us. The next logical step for our Government is to establish a Coalition of the Competent!

      Independent, UDP & PPM members all working together for the good of our islands.

      Vote for a Coalition Government Cayman. DON’T VOTE STRAIGHT! A coalition governemt is the ‘Best Way Forward’!