PPM queries budget surplus
(CNS): Explaining why he and the PPM members abstained from voting on the budget last month, Kurt Tibbetts, the leader of the opposition, said they couldn’t vote ‘no’ because of the pressing need to meet government commitments, nor could they vote ‘yes’ when there was so much uncertainty over the projections. Speaking to the party faithful at the PPM’s first national council meeting since the election, Tibbetts said that there were genuine fears in the industry that the increase in fees could drive business away and the government would not only fail to achieve its objective of keeping the UK at bay, it could damage the financial services industry as well.
Tibbetts noted that there had been no need for the country to project a surplus as even the UK had accepted that the previously large deficit could be addressed over more than one year. He said that in the drive by the current government to avoid dealing with the UK, it had chosen to raise fees, a gamble which may not pay off. Tibbetts’ criticisms come in the wake of increasing questions from the sector, including STEP and the Law Society, that have also expressed concern that the fees will drive business away.
During the meeting, which was well attended by PPM supporters, Tibbetts said that the small reduction in operating expenses of $5million had not come from any real cut in public sector day to day costs, but government was now not paying into the past service pension liability fund, putting civil servant pensions at risk. Instead of reducing operating costs by any significant amount, Tibbetts said he believed Leader of Government Business McKeeva Bush was hoping to raise an extra $94 million in the remaining part of this fiscal year with fee increases.
“The difficulty with this revenue package is we don’t know if the projections will be realized,” said the oppositionleader. “There are real fears by many of those involved in industry that the increase will drive business away so the revenue will fall. This is a very risky business being employed to avoid having to talk to the UK.”
He said that while every ill in the country had been directed at the previous administration for the capital projects, he once again defended the decisions. The opposition leader said the spending plans had been early in the PPM’s term when revenue predictions were high. The government building would save government $10 million per annum and that the schools were desperately needed and if they were not built, in less than two years there would be no room for kids to go to school.
He also said that the country would still have been in deficit without the schools as it was a massive decline in revenue and an increase in operating costs caused by the financial crisis which was at the bottom of the problem. “With or without the new government building or the schools we would have had an operating deficit anyway,” Tibbetts stated, adding that at least these projects were necessary, visible and had kept Caymanians in work.
It was time to recognise the real reason for the problem, Tibbetts added, which was the global economic challenges. He explained that government earnings were down tremendously, with $21 million less in revenue being collected over the last three months than had been predicted. With the pressure from the UK, the leader of the PPM said that the government had put together a revenue package that increased fees but they hadn’t looked at how to trim operational revenue.
“They tell us we were over spending and they say they have cut it by $5 million, but they have not. They have cut the past service pension liability fund, putting pensions at risk,and if they had chosen to pay that protection, the revenue would be far greater,” Tibbetts observed.
If the government doesn’t earn what it predicts it will, he warned, the situation with the UK will be far more difficult than if government had predicted to address the deficit over a longer period. Given that the UK was itself predicting a pound sterling deficit of 1 trillion, it would have been better to predict a deficit and cut operating costs rather than increase so many fees, he said.
“We have serious doubts in the short term but we are also facing potential long term damage. If the raising of fees causes business to leave, it really will have to be taken from people’s pockets. We don’t want this to happen,” Tibbetts added. “We have every desire to work alongside the government but you can imagine how difficult that is. But we have still offered to do so in writing as well, but have not received a reply.”
Admitting that everything the PPM administration did was not perfect, Tibbetts said his government plans had been based on projected revenue and how much borrowing could be sustained on that.
“Obviously those projections were not right and when the Michael Foot review speaks about that he does so with the benefit of hindsight,” Tibbetts added, referring to the recent review from the UK Treasury which severely criticised and questioned the CIG decisions to embark on spending projects in a downturn.
“When we realized things were slimming revenue-wise, we cancelled many planned projects but we couldn’t stop the ones we were already involved in.” He said they had buoyed up the domestic economy in very difficult times andstopping them would have been a bad decision. “Not even the world’s best economists predicted how drastic and how fast this crisis would hit.”
Lamenting the continued failure to address the growth in the civil service, he admitted it was a perpetual problem as every time the country’s revenue increased the cost of the civil service would increase by around 50%. “We asked the official members over and over to start cutting, and while the civil service grew in our time, we did not hire them,” Tibbetts added. “The hiring and firing of civil service is not down to elected officials.”
Nor, he said, was it down to the rank and file of the civil service but the fault was with leadership who constantly grew departments when something new was introduce instead of looking to see where things could be absorbed. During the meeting, the issue of the failure to reduce the civil service was a major talking point and Tibbetts said he is still mystified over what happened to the 6% cut, a policy introduced by the PPM in 2008 which seemed to have never materialized.
“After giving instructions to cut operating expenses by 6%, we discover at the end of the year from the financial secretary that instead of the costs going down they went up by over $19 million,” Tibbetts added. “To this day I don’t understand that. I even asked the governor and he couldn’t explain it.”
Category: Headline News
I have heard lately from several sources that the Cayman Islands government has increased in size by 56% in the last 5 years. Given the financial crunch of the last 12 months or since the last election this troubling fact must be left at the feet of the PPM and no one else.
The former government and the former LoGB have been largely successful id dodging responsiblity for mismanagement of the country’s finances during their term blaming everything on everyone else. The growing or bloating of government is completely under their control.
It is beyond belief.
In typical PPM fashion, "couldn’t vote no and couldn’t vote yes." Anyone ever known Kurt to take a stand on anything?? Incompetence then and Incompetence now!!
These sore losers still get up on their soapbox and complain and their is not one clear or valid suggestion from them as to how things should be done differently,
Opposition for Opposition sake. Too bad we have to pay so much for incompetence and waste of time!
One thing that I don’t hear much about is the East End sea wall that was part of the PPM capital project. That sheet piling constructed wall must have cost millions of dollars and was certainly a most expensive solution to that problem.
It once again points to the most expensive solution as the solution of choice in the Cayman Islands.
Can we remember something please we have proof where are money is
Your kids will go to the schools
You will work in the new admin building
You drive on the money everyday!
what is ya’ll problem!
Problem:
Hungry children can’t learn. PPM sent the country broke. You don’t need a $500,000 kitchen to learn to cook.
I would go on, but hopefully you’ve learnt something (without a $200M price tag either).
Problem: greedy & corrupt udp politicans! AND we dont need a $78 million turtle farm, multi million dollar Royal Watler port, $40 million low cost metal sheds, overpayments to family for land, $1.4 payment to friends for consulting which never happened & I could go on & on & on &ON……!
I would go on, but hopefully you’ve learnt something!! BUT SOMEHOW I DOUBT IT, you all are not capable of understanding!
Both PPM and UDP are out of their depth!
Neither have a clue about running a small business, let alone a country. We have come to some sad times. It seems to me (and many others i talk with) that Cayman has prospered very well for decades…and to be in such a precarious position as now is nothing sort of incompetence. I recently read that another BOT (i believe Gurnsey) has over six hundred and fifty million dollars saved that will get through this crisis quite easily. Cayman has 0.
Seems our leaders have been busy spending all the country’s money foolishly (four pay raises for themselves in past four years), Boatswain Beach, just to name two glaring exampes… and now they are willing to increase fees to the point of driving business away…all in an effort to not have to deal with UK FCO.
They ALL seem like spoilt children…
It is unbelievable that the PPM is actually talking about “budget targets and fiscal responsibility” The PPM should forget about commenting on this topic as we see where and what the PPM left there.
Talk about the roads you did and the sea defense walls. We can see and feel those ….lets us remember the few good things but please do not remind me of the budget! I am still waiting to hear what your solution would have been if you had been re-elected.
Ken Jefferson is getting off lightly in all of this.
Agreed!!!!!!
That man still has a job? Pretty much tells the whole story.
What amazes me is that years prior to and up to the past election from many sectors there were calls for caution sent to the government in power the PPM to phase in and cut back some spending.
Now the PPM act like it happened all of a sudden and was an act of God of which they had no warning or responsiblity which is simply mendacious. I remember the former LoGB making the statement that the global recession would have no impact on the Cayman Islands economy.
Of course the PPM faithful ignore or blame anyone they are able which leaves the door open for a future repeat financial performance.
DON’T VOTE- IT ONLY ENCOURAGES THEM
– Words of wisdom from Mark Twain
Finally the PPM has spoken out in defence.
The country seems to happened in 2004 when Ivan blew through.
PPM ensured that a huge majority of homes and government buildings were restored immediately including the infrastructure. Where did that money come from????
Also the new Turtle Farm was introduced with huge overspending…which has not been corrected but continues..
Its amazing that so many people can be so blind as to believe that the mess we are in now just happened over the past 4 years. The Govts have been overspending for many years but at least the last Govt. tried to spend the money on things we needed such as schools and roads. When the financial industry collapses and many more of us are unemployed, you might finally see reality. Organisations such as STEP and the Law Society who dare to offer their honest opinions are far from idiots. Many of the members are executives in their respective organisations with many years of experience in the financial industry. We need to be stop being arrogant and believing that investors/businesses will pay whatever fees we charge and remember there are plenty of other jurisdictions offering the same services for less – even the low tax jurisdictions are more competitive now that our fees have gone over the top.
I was present at the PPM meeting last night which had a good turn out (a full Seafarers Hall), but there were a few important things missing: personal attacks; anamosity towards others; name calling; rowdy behavior; "getting down in the gutters" & plain old udp-isms!
It was a pleasure & an honor to be at the PPM meeting last night, it was extremely informative, a lot of fun, & it was simply a pleasure to be amongst well behaved & honorable people (in the crowd as well as the platform speakers). Unfortunately one of the PPM’s stars, Arden, was sick & was unable to attend, & apologies were sent by PPM’s Brac hero Moses, but all in all it was a great meeting.
Thank you PPM for showing us the way. Thank you PPM for informing us of current events without resorting to UDP antics & dirt. Thank you PPM for behaving like adults, instead of using personal attacks & lies like the uncouth udp & their leader. THERE IS HOPE AFTERALL.
It cannot be that those stupid UDP puppets still don’t understand that the PPM did not cause the global recession !!! ……..and it is the global recession that has caused the drop off in revenue in the Cayman Islands adn indeed in every country in the world.
So UDP puppets…..let me say this again….THIS IS AN OPERATIONAL DEFICIT……so with or without the schools adn roads tat we so desperately needed we would still have an operational deficit because of the global recession.
If only we were so powerful as to be capable of causing a global recession….certainly that would qualify us as a SUPERPOWER in the world economy.
Where have these UDPers come from. Were they really tied out in the bush for that long ????
We need a new party made up of "EDUCATED" young energetic creative Caymanians whose sole allegiance is to the people of these islands and not their pockets, or some wealthy foreigner who uses them to make money. How can these people sleep at night knowing how much they are selling us out. The PPM and the UDP need to step aside and let qualified loyal Caymanians get to work fixing this mess. I for one will not be voting for any single individual who has "served time" in our LA throughout their lifetime.
We need new blood.
I must say that we did have two Politicians who did not agree to give away our Heritage when that 3800 Status grants was given . Believe it or not they were our one and only Roy Bodden ,and our Dr Frank McFIELD. Being the most educated of the group they could see alittle further. We would also like to congratulate Dr Frank on his most recent award on the 25th Anniversary of the Harquail Theatre. Thank you for making such a contributation to Grand Cayman.
How sad they would not vote yes or no. To me that says they would rather no nothing, and can not make the hard decisions. If the water starts filling the boat you can do something (vote) or do nothing (what they did) if you do nothing the boat will fill with water and sink, or you can bail the water out or even swim to shore, that is doing something. PPM will regret the day they did not vote. Their actions do not make them leaders or followers, they are just paid spectators!
Give me a break, "PPM will regret the day they did not vote" – in what way please? How could they in all good faith vote yes and if they voted no it would still have gone with the UDP majority vote and passed, so with PPM not voted it did not have any effect on the outcome, so please think before you post such ridiculous comments, but then again you are obviously a UDP puppet so I shouldn’t expect anything better!
No UDP puppet here! I do not side with either of these parties. The point I was trying to make was they will regret not voting. If you do not vote you have no voice, no position and no opinion, because you have taken no action! If you choose not to vote you have NO right to complain, UPD, PPM or whoever!
No one can come to me and say that this economic downturn in the Cayman Islands resulted “solo” from the capital spending of the PPM. You would have to be well fooled by political rhetoric to believe such a thing. Moreover, INDEPENDENT in thinking to understand where I am coming from…
Too many sheep
PPM didnt put us in the economic downturn – they just left us in the midst of it without a dollar to our name.
I hope that makes you feel better.
I suppose that the $78 million "OVERSPENT" on Boatswain Beach had nothing to do with it? I suppose the $40 odd million wasted on low cost housing had nothing to do with it? Not to mention the Royal Watler terminal, ‘special’ land purchaes from family etc etc!!
I prefer to know that my government spent $100 million on 3 schools, & actually SEE where that money went, than to have my government spend $78 million on a $35 million project & not see or know where that money actually went! (in whose pockets did those millions go? cough cough)!
It seems that you are ok with millions of $’s being wasted as long as it is your politicans doing it, but it upsets you when the PPM spends money on much needed things such as schools & roads! You are PATHETIC! Honestly you are!
Mckeeva bush has also contributed to the present state of affairs by telling the world that we are bankrupt thus chasing away foreign investors & well as scaring away potential foreign investors! If you think Bolt is fast, you should check the speed of potential investors when they heard that Cayman is bankrupt! That was a most irresponsible & selfish act by Mckeeva bush, & he has to accept much of the blame for the present mess! He continues to overspend, despite saying we are bankrupt! what a dunce!
With that attitude, they could have just built a monument for the $100M and you would be happy.
PPM logics.
Beleive it or not, the only people who write on CNN and agree with McKeeva and his cronies, are the Status holders. You will hear people respond by saying that they are Caymanian to the bone and agree with the Dictatorship we are under BUT we will never know who is REALLY writing and I still say itcan only be a Status holder!
PPM Members:
Be upset with the failed PPM leadership for putting us as a Country in the mess we are, not with the UDP for trying to get us out of the mess.
Is that so!
UDP is not all that innocent
Forget the UDP vs. PPM rhetoric. Let us join hands and focus on sensible policies to get our country out of the hole. Contrary to what you would like to believe notwitstanding the shortcomings of the PPM, we have not given the UDP carte blanche. You appear to believe you can deflect all criticism by saying that the PPM got us into this mess. Think again.
I attended the meeting last night and it was VERY informative. That’s what PPM is all about – transparency.
Something UDP know nothing about…
What’s up with all the negative comments? I think "they" are angry that PPM is being transparent and informing the public with the truth.
heed their advice ?
What advice? Not to take a position and flip flop back and forth on the issues….yeah great idea…
The advice is don’t kill the goose that laid the golden egg with the increases in fees affecting the financial industry. Of course the LOGB is too arrogant to listen as are his supporters.
The idea that because the PPM Govt. made some miscalulations in their budget they should not now have any say on budgetary issues is ridiculous. They now have the benefit of hard experience of acting upon Mr. Jefferson’s flawed projections. Mac would do well to heed their advice.
Way to lead PPM. Way to lead…fence sitters just waiting for things to go one way or the other then that is the side they will take…great values…
At least we have a leader now who is willing to make the difficult decisions to move forward unlike the PPM…
We are moving alright. Whether it is forward is a different story.
09;27 you can’t have it both ways!
In one breath the udp say that the PPM are sitting on the fence & can’t make decisions, & that they get nothing done. On the other hand we hear the udp saying that the PPM did too much, & tried to get too much acomplished! (And they have the nerve to say that the PPM can’t make up their mind?????)
The udp must make up their minds, which is it? You can’t have it both ways, it’s either one or the other! Even if the udp are not a united group behind the scenes, they should at least try and show a united front!
Not one solution.
The PPM has not one solution to the problem their reckless spending created.
….and the UDP’s solution is what? MORE SPENDING!! Great job UDP, that is a very good solution.
Quarterly Government Financial Statement…
If summary, unaudited, figures could be presented to the LA in a timely manner (say within 6 weeks of the end of a calendar-quarter) wouldn’t everyone have a better idea of how we are doing? Sept. 30th was a little over 4 weeks ago, how about numbers as at Sept-end to be published by Nov. 16th?
It is ironic to hear the PPM talk about budget concerns, given the PPM financial management history their judgement must be called into question.
It was interesting to listen to the former LoGB talk around the morning radio hosts. They tried to hold him accountable and got no where. Regardless of their abilities he does have a responsiblity in the current financial problems regardless of his excuses.
PPM has caused us so much and yet they refused to support the budget. Shame on you all
Not PPM, but I wouldn’t support the Budget either