LA approves FS’ last budget
(CNS): The 2009/10 budget has passed through the Legislative Assembly with the backing of government members and the House’s independent representative. However, the $700 million spending plan was not approved by the opposition, who all abstained when the leader of government business asked for a division. Financial Secretary Kenneth Jefferson’s final budget has seen a raft of fee increases and is forecast to bring in entire public sector earnings of $733,949. With few spending cuts, however, government expenses together with losses from statutory authorities will leave a surplus of less than $5 million.
Following the dramatic fall in government earnings last year, coming at a time when it had increased borrowing significantly to fund capital projects, the 2008/09 fiscal year ended with a $81million deficit. This meant Cayman had broken the rules of its own public management and finance law, forcing government to seek approval from the UK to borrow money to keep government afloat. With the UK pressing for a broader tax base, the request was denied until the government came up with revenue raising measures for this year, a promise to broaden the tax base for the future, as well as plans to control public spending.
As a result of the UK’s pressure to introduce direct taxation of some kind, the government made the decision to push for a surplus budget by raising fees across the board, from banks to work permits, to get back within the confines of the PMFL and eliminate the need for UK approval on borrowing and resist the pressure for property or payroll taxes.
The budget was criticized by both the opposition and the North Side member for raising feesbut making very few cuts to public spending. The opposition said government had placed too heavy a burden on the community by aiming to remove the deficit in one year during a recession and it was overly optimistic.
Althoughthe budget did not introduce direct taxation, the increases include a rise in duty, work permit fees, many financial service fee increases, a money transfer fee (on money firms, not banks) and a new business premises fee on commercial tenants. The revenue raising measures are expected to bring government a further $94 million in this budget year and around $126 million over the course of the next twelve months.
The government will also be borrowing $275 million in this budget year to fund capital projects and pay off previous loans. According to the budget document, the entire public sector debt stands at over $714million.
Category: Headline News
Well if anybody has any faith in what Jefferson or Mac says then, too bad. Neither of these two jokers have a clue!
Next year before this time, we will be in an even bigger mess. Maybe then Macdinijad will have no choice but to make the RICH pay their fair share.
To abstain is cowardice. If you cant stand up and tell people where you are then you are lost. The Opposition abstained because if this budget works they cant be accused of voting "no" and if it fails they cant be accused of voting "yes" – I hope that their supporters realise that they just abstained from voting on the most important budget in our history. They need to all resign and give others the opportunity to represent us properly.
Agreed!
They ALL need to resign…both PPM and UDP…Disgraceful!!
Abstention is sometimes the only appropriate vote.
To their credit the PPM did tell the people where they are on the budget. Some of it does not add up. It is all smoke and mirrors.
Relying on Mr. Jefferson’s estimates to show a surplus is very dangerous as experience has proved.
After watching Cayman 27 tonight, I know why the opposition abstained from approving the new budget…..
Was that their leader Mr Tibbets, crashed out, sleeping like a baby, while the cameras got shots of various different parties????????
Many will confirm that this is usually how Kurt is when he is engaged in a serious conversation/debate, even when one-on-one. It may seem disrespectful but it’s how he concentrates.
Give the devil his due. That is true. Kurt only seems not to be paying attention but has the ability to quickly grasp the issues.
What?? he takes a nap to concentrate??? Come on people, the PPM needs new leadership..I was so embarrased for him the other day when Austin asked him about the schools and he had no idea and had to defer all questions to when Alden came on the show. How does a leader not know what is going on in his own government when hundreds of millions of dollars were being wasted. Clearly Kurt is out of touch and totally ineffective!!
Where you been living? Obviously you not been very observant for the last years…..if you think for one minute Kurt is sleeping you mistaken! Now when you see Mac in the same position, believe you me – he is sleeping! And if you were being the least observant you would know for sure why they did not approve the new budget. Wake up nuh?!!
I would think that the public, especially the Caymanians, would like to see a coherent plan that would enable us to get out of debt by a combination of careful spending and sustainable revenue measures.
If we expect the private sector to inject more cash, I would think that in return the private sector would like to see a more frugal government.
Previously in history when nations faced serious problems within their economies, they introduced austerity measures which were designed to redress the balance in the favour of the country rather than the bankers.
Are we ready to all pull together and work out some kind of transparent refinancing that will get our debt ratio under control?
I am not sure about the answer to this question, but one thing is for sure, If you owe money, you are not free. This applies on a personal, corporate, national and global level.
Perhaps the government can present to the people a plan, say 5 year, or 3 year, or whatever to say that we can become solvent if we follow these basic rules?
The key is not to polarize the private and public sector, but rather to unify and to understand each other’s dynamics.
"With few spending cuts, however, government expenses together with losses from statutory authorities will leave a surplus of less than $5 million."
With so few spending cuts my guess is that the surplus will be about minus $100 million. Lets see which projection is more accurate.
So last year the same people (your goverment) was only off by 81 million.
Now with the large increase in public(not goverment)financial aid (shall we call it?) The very same group projects a 5 million dollar surplus.
If they are wrong AGAIN guess what happens to Grand Collateral I mean Cayman. This will be a great lesson for the rest of the world.
And someday in the future this will be a great place to live again but not for Caymanians.