Cayman Finance backs Miller on public sector cuts.

| 16/03/2010

(CNS): The recommendations made in the Miller –Shaw report released by government this week have been applauded by the body representing the country’s financial services sector. Cayman Finance Chairman, Anthony Travers described the report as a comprehensive and academic work offering the premier a clear road map about what is the right policy for Cayman and in particular the cuts to public sector remuneration and benefits packages. The report which calls for a drastic reduction in public sector spending rejects any introduction of taxation and further fee increases.

“These problems have clearly developed over a great number of years, but it falls to Premier Bush to bring the Cayman Islands into line now with real world economics,” added Travers. “The Miller Commission is very helpful in specifically targeting the areas where current practices must be revised and changes made.  The Report makes clear that there is no sustainable basis on which the Cayman Islands public sector can continue to be isolated from real-world economic belt- tightening.”

The 135 page report plus appendix, entitled Addressing the challenge of fiscal sustainability of the Cayman Islands, which was written by James Miller III, David Shaw and Kenneth Jefferson, was commissioned by the CIG as an independent review of the country’s revenues and expenditures.

The report was conducted against the background of the UK imposing a review of government earnings and spending as a result of the FCO’s approval for further borrowing in order to address the 2009/10 benefit.  The overseas territories minister Chris Bryant had asked the government to look at how the CIG’s revenue base could be broaden to a more sustainable level and had asked government to examine possible new forms of taxation.

The report however has completely rejected the notion of any kind of taxation and while the premier said on Monday following his trip to the UK that the FCO has accepted the recommendations to reduce public sector costs it would have liked the authors to have examined revenue raising as well as spending cutting measures.

Category: Business

Comments (14)

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  1. PaperCaymanian says:

    If the government wanted to ammend the constitution to insure the fiscal responsibility of civil service businesses would be lining up to bail them out. But if you just keep reelecting them and not make them change  then why would you expect them to behave differently.

    approx 6,000 CS employees

    approx 5,200 are "Caymanian"

    approx 60,000 population (I think less by the day)

    approx 30,000 are "Caymanian"

    This equals about 20% of entire population,not working age, but entire population are civil servants).

    Now go on the internet and find any nation on the planet with that ratio.

    I for one know many fine civil servants. I also know many who are paid to do absolutely nothing at all.Any number crunching by a person who can read a balance sheet says that this civil service is enormous

  2. Anonymous says:

    I would encourage anyone who has not read the Miller Report (and will include many of the bloggers on this page in that list) to do so.  It is publicly available on http://www.gov.ky.  It gives a clear (and yes, academic) look at the current state of the CIG’s fiscal position.  It leaves little doubt that the cost to run the civil service as it currently stands is completely unsustainable. Check out pages 51 and 59 where the aggregate CS compensation is compared to other countries.  I particularly like the part where it says "Indeed, from our informal calculation, taking benefits into account, the top five grades [pay grades] in Cayman all have higher net-of-tax annual incomes than the UK Prime Minister!" 

    It does make pity a little harder to come by, when the private sector has already made its cut-backs. 

    There are essentially two options:  everyone takes a little less home, or some people will be laid off completely.  A contract is a contract, until it expires and that is the point that has been reached.  If anyone from the civil service is able to ‘find’ the money to continue to pay them the nice pay packages, then I am sure that the supportors of the Miller Report will be only too happy to look at it.  Right now the barrel is empty.  There is a cold, hard truth in that.  Complaining about it will not make it go away.

    I would also like to point out that some of the bloggers above might also like to make some other research and reports on the topic of the current recession some bed time reading before making uninformed critiques. It has been unequivocally reported by several different sources (for example the Foote Report) that neither hedge funds nor offshore centres were instigators of the financial crisis.  That fault lies in the UK and US banks who were lending money to those who could not afford to pay them back. Hmm.  Sound familiar?

     

  3. slowpoke says:

     The financial industry – you have got to love them. 

    When it comes to sucking out the last drops of blood from some desperately poor country, on behalf of hedge fund investors, Mr. Ridley (in a letter to the Editor) pronounces that “A contract is a contract”.

    At the same time, Mr. Travers heartily endorses the violation of thousands of civil service contracts, to protect the financial industry.

    Which one is it boys?  

  4. Joe Average says:

    Everyone knows The Cayman Financial Services Association is full of bloggers. Itis the secret headquarters!

    Tonight’s meeting will be about building roadblocks.  7pm.  Meet around back.

    Does the Premier read this?

    In that case…use the secret handshake

    should i have said that?

  5. tired says:

     

    Dear Mr. Travers and other financial viziers, czars and Mafiosi,
     
     While I appreciate your gracious opinion and bow to your superior intellect, I would like for to you remove yourselves from business of governments (temporarily), so that you might all to work diligently at fixing the financial crisis that you created via hedge funds, poor lending policies and very stupid staff remuneration packages (that were inversely proportionate to performance of the individual and the company). In order to be fair I will give you a definition of what I mean by “fix”.  For the purposes of this request fixing would specifically involve paying back the various governments and their citizens, all of the monies used to “bail” you out, paying back clients monies/assets that they lost by trusting and employing financial experts. Once you have done this please provide a detailed and comprehensive report on how you did it. Then our respective governments can follow suit.
    Seriously …While I whole heartedly agree that government should be more efficient. I am offended that the financial sector who are responsible for the global recession itself , through poor business managementpractices, are swooping in on white horses with sound business advice for goverment! It is obscene!
    • Wake me when it's over says:

      The economy is broken into two parts:

      The Government:  Which takes our money, pays themselves from it.  And wastes it.

      And Banks and Financial Services:  Which takes our money, pays themselves from it.  And loses it.

      So you see, they both know what to do with our money. 

      And…. we have choices.

       

  6. Anonymous says:

    I think you will find that the Miller report was required by the FCO We know that Miller and Shaw consulted all interested bodies in the Islands including CIG.I guess CIG will pick up the cost. There seems to be the usual ill informed and juvenile  comment here about the Report by persons who have clearly never read it and who feel threatened by it. But the arguments seem to be solidly backed and the recommendations seem sound and well supported by comparative analysis. What is clear is that the detailed findings of this report far exceed in quality and depth any previously published analysis and amount to a game changer for Cayman and just in time.  This is clearly  the best information ever published about the economy of the Cayman Islands .Those who want their criticisms and alternative suggestions  to be taken into account had better do a better job of economic argument than the posters on CNS to date . The expression “fool fool” is not likely to carry much weight outside of the kindergarten playground and doesn’t really provide a sound alternative economic basis on which to proceed. As a line of argument it is probably unlikely  to cause Mr Miller or Mr Shaw to revise their opinions .Any one wanting to produce an economic report with contrary conclusion should do so whether by use of the internet or otherwise.Until you do and until any such alternative report is accepted by the FCO  the Miller Report isclearly the shining path.Get used to it.   

  7. Anonymous says:

    Ahh! Now all is clear CNS, thank you for your excellent reporting! Now that I have read this story the background to this report is clear. I hope Travers was the one to foot the cost of this UDP supporting document as well and not us the people. Mckeeva gives new meaning to his coined phrase "fool fool".

  8. slowpoke says:

     

     I support making cuts to the CS, but to call this an "academic work" is an incredible insult to all academics.  A true academic goes in with an open mind and is willing to explore all alternatives, even when they are not comfortable.  

     Miller was cherry picked to provide these predetermined recommendations (did anybody see an open invitation for a consultant to provide a comprehensive, balanced, innovative, visionary report?).  He has been spewing forth the same Reaganomic drivel, at every opportunity, never challenging his own preconceptions, in spite of the significant evidence that these policies are a failure. 

    As I said before, we could have Googled, cut and paste, and printed this report in less than a minute for under CI$ 1.00.

     

  9. Anonymous says:

    here, here!

  10. Fuzzy says:

    At first I was wondering if McKeeva had simply written this report and had Mr Miller fine tune it since it was exactly the same thing Mac was proposing ,then I read that Ken Jefferson had co written it and now I don’t have to wonder anymore. Of course people in the millionaires club would have no objection to thousands of civil servants getting laid off .After all ,this report also calls for more work permits, so they wont even have to hire "lazy ,and ignorant "ex civil servants This is a perfect recipe for disaster.

  11. Anonymous says:

    Cut the Civil Service already.

    1/2 of them are not needed, incompetent and will bankrupt Cayman.

    Fire them!

  12. Anonymous says:

    Oh really?? You mean to say McKeeva went all the way to the UK in support of the report without first consulting Tony? Obviously we knew he agreed or Mac would have never been on board. Redundant article, but thanks CNS :).

    • Lachlan MacTavish says:

       I have a lot of empathy for the Civil Service employees as well as the voters / tax payers of Cayman. We must remember no matter what the spin from the premier/reports……the elected officials of our country allowed the civil service to grow beyond reasonable levels. Reality is that the CS will have to be reduced and the benefits will have to be adjusted to reasonable levels, the present system cannot be sustained. CS employees look to who you elected because they got you here and now they will have to change your employement.