Bush targets zero public debt
(CNS): Following his trip to Jersey earlier this month the Cayman Islands premier has said that he would like to see this jurisdiction copy the UK crown dependency when it comes to managing public finances especially its lack of public debt. He said Jersey has zero public debt as the jurisdiction has not borrowed any money since the 1950s, has reserves of over 1.6billion pounds and has funded all of its capital projects through its own revenue. McKeeva Bush told the legislative Assembly on Wednesday that it was a position and philosophy that he would like the Cayman government to achieve.
He said Cayman’s debt had been forced on his government and it was now in a position where it was unable to borrow anymore. Despite improvements in the country’s economic situation he pointed out that the public debt as of January 2011 was CI$560million and the FCO had stated that the government would not be able to borrow anymore money next year. He also lamented the fact that no money had been put into the country’s reserves since 2004.
“My government happens to be fundamentally averse to borrowing” he stated. “We have had to incur borrowing during our present term to continue capital projects started by the previous government.”
Bush said when he came to office in May 2009 following the PPM administration there was a public debt of CI$373 million approximately three times what it was when he left office in May 2005 or 163% increase in the debt position by the PPM over its four-year term of government.
He stated that now if government were to borrow the full $155million which the UK had approved for the 2010/11 financial year the country would then owe more than CI$626million. With a projected GDP for this year of around CI$2.5 Billion central government debt would be 25.3 percent of the GDP, which Bush said was too far and he did not intend to take it any further.
Bush also hit back at reports in the British press that the UK government had lent money to Cayman which was not true. He noted that Cayman had never received a red cent from the UK not even in the wake of Ivan. However, Cayman had sent money to the UK during the 1980s when it was fighting the Falklands war.
Although not from the UK, the cost of servicing the government’s debt obligations is forecasted to be around 13% of government’s revenue for this year which is in excess of the maximum specified in the Public Management and Finance Law of 10%.
As a result Bush said that in future infrastructure development by government could only occur from its own resources.
“Since the introduction of more revenue enhancement measures by the Government is not an optimal choice, the country must move on other alternatives to obtaining the resources needed to develop and enhance the Islands’ infrastructure: that is, by using public assets and using the proceeds there from to continue the development of these Islands,” the premier said.
He revealed his intention to use private projects and the country’s assets to develop the infrastructure that the country needed.
“The possibility of central government borrowing externally in the short-term to provide funding needed to develop the Islands’ infrastructure is not going to happen. Therefore, the careful use of our public assets, the utilization of our national assets, the construction of the North Sound Channel, the development of a Special Economic Zone, the Shetty Hospital and other infrastructure-boosting projects represent a sensible way of continuing the much-needed development of these Islands,” he stated, adding that the projects would be of benefit not just in the present situation, but to future generations.
See premier’s official statement below
Category: Headline News
People, do not be fooled by this man.
Cayman has a CI$560m public debt and at the beginning of his term we had CI$373m public debt which equates to a 50% increase in public debt over a short two years in office. I would like to know where he has spent this CI$187m or 50% increase in public debt. If he was allowed to borrow further he would far exceed the increase in public debt from the PPMs four years in office.
We are actually fortunate that we are unable to borrow under UK limitations, further debt because this prevents this mad man from recklessly destroying our country further than he has to date in only two short years.
Thank you UK for preventing him taking on additional debt .
Jersey has a 20% income tax on everything earned above £12,000 per year.
And McKeeva sounds like he just had an ephiphany!
I can’t help but laugh at this man anymore about all his complaining. He has had how many DECADES in the LA to help out with things, and yet now he acts like he is the answer.
Bo Bo , dat aint why we really leavin’ However, you will be left to pick up my share of the tax burden. I’ll go pay tax where I get something in return. Like free health care, free school, real police and yes, still live on the beautiful emerald green sea and all for just 15%. Which will almost be negated by my cost of living decrease. You get a refinery, a Chinese Boss and Tax
How long has Mac XXXXX? Some one has to tell him to stop making ridiculous statements concerning our country and proposed government policy. I can’t take the continuing embarrassment day after day. He has developed into a cartoon character. I would love to laugh but this man is serious and scary.
tax..tax…and more tax….the party is over everyone……there is simply no feasible way that Cayman can sustain itself even medium term based on the model we’ve operated under for the past 40 years…..tax is coming, and thats why those in the know are fleeing….top attorneys, hedge fund administrators, all been running off the island for the past 18 months….the see the writing on the wall…..the realtors see it too……tax on property, tax on income, probably a sales tax too….they wont come together, and it could be 10 years away….but they’re coming, because life is getting more expensive and onshore governments are slowly coming around to the fact that offshore jurisdictions are in essence fundamentally wrong…….bye bye the past
Tax is already here.. Work permits = an income tax. Stamp duty = 7 years property tax. Import duty = sales tax/VAT. And the hurricanes = 100% of your uninsured belongings every 10 years or so. Any leader who thinks they can levy MORE tax without further shrinking this small economy is just nuts.
Fly to New York come back with "lets borrow" a lot of money. Singapore "global inward investment". England "we can still keep our heads above water with our model". Spain Africa, Cuba, nothing from therejust a good time. The Olympics "lets have more sports in Cayman". Did he go to Trinada because the oil refinery is back. India, "a BIG hospital". Bahamas "Tourism"….opps no that was a junket. Now Jersey "zero debt".
More knowledgeable people than I understand that the excesses of our single man Government, the CS and the lack of attention to all of the core issues presently in Cayman cannot be sustained by the old model of duty, tax and fees.
The choice Mr. Bush is address the tough issues under the present system, which you will not, or change the system, which you will not do either.
Cayman needs new leadership.
They couldn’t collect garbage fees, how do you think they can collect tax??
Does “careful use of our resources” mean a sell off of national assets?
The suggestion that the government live within its means is a welcome one that is long overdue. As ever with Mr Bush though the ambitions are admirable but the delivery is unclear.
Reducing spending is always difficult for politicians, as the voters reject the cold turkey at theballot box.
That can be easily achieved with some tippex and a pen.
It’s not like we have real accounts anyway.
Start at the top. Get rid of Julianna and her spending shopping spree, cars, and bodyguards. I agree with the earlier poster. Our own Governor lives frugally, why can’t our politicians?
Now that he has said he wants to take us out of debt, let’s see him institute the measures that will get us there. I am waiting and time is ticking. It is an objective that I whole heartedly support, but t#he "gallivanting" around the globe won’t get us there for sure. Selling government’s assets for short term gain and then losing consistent revenue won’t get us there for sure. Renting back those assets won’t get us there. Leasing out government’s land for peanuts won’t get us there either. Neither will knee jerk, not-thought-through decisions do the trick either. I will be waiting to hear what the plan is and waiting to see it implemented.
How can we model ourselves after Jersey? They have income tax dont they ?
They also don’t have an over-bloated civil service that leaches the public purse… oh and their civil service works hard and gives results. I think their audits and financials are also very prudently kept up to date. They know how to run their civil service, whereas ours has no idea!
I personally don’t know if Jersey has an income tax or not, but they must not have as many self-serving politicians as we have.
Jersey does indeed have an income tax, somewhere around 15% of your salary depending on various allowances given. It is still substantially lower than the UK, USA and many other locations, but yes they do have it, and they manage very well with the limited resources they have, making hard decisions when necessary about what to cut, and what to do without.
What does Jersey do without? Well it does not run a loss-making national airline, it does not have immense loss-makers like the turtle farm, and its police do not have a helicopter.
Dear Mr Premier,
Thanks for narrating the good example of Jersey.
As a ordinary citizen, I run my affairs that way and the same should be of the public coffers. I am glad you have and propose to lead by example. As far the causes, I wish we could undo the wrong by the previous government.
We need to put into place systems that prevent a repeat of the reckless spending.
You have my full support in this matter
The man is completely off his rockers. Since when did a person fundamentally averse to borrowing go out and borrow $128M on a short-term loan (with "finder’s fees" going to someone he knows very well) before embarking on a $155M loan?
a partisan reply
I think they need to stop spending what we don;t have they keep saying we broke.I see the deputy permier in supermarket and she has a bodyguard,yet the governor is out on his own give me a break but yet we so broke,stop spendiong what we don’t have.
I just hope that this is more advance thinking that will produce the concept of only spending what we make. Too many times in our past our politicians have preach the concept but have masked it by borrowing loans to balance the budget.
Because of how Government finances work, Government will always have to borrow loans but a system may be put in place whereby these loans are all repaid at the end of the year.