Public spending still going up

| 05/12/2011

government building.JPG(CNS): Despite claims by Premier McKeeva Bush that his government has made great strides to improve the country’s finances, over the next three years public spending is set increase. The projections in the government’s Strategic Policy Statement (SPS) for the next three financial years shows no reduction in expenditures but instead depend on projections of increased revenues to deliver surpluses and eventually meet the requirements of the Public Management and Finance Law, as well as the terms of the fiscal agreement Bush has signed with the United Kingdom. Opposition Leader Alden McLaughlin has said that this is a very dangerous place for Cayman to be, given how poor past revenue projections have proved to be.

According to the SPS, which was delivered by the premier in the Legislative Assembly last week, during the next financial year, which starts in June, core government forecasts spending around $498 million, compared to around $490 million that was originally predicted for this financial year. In 2013/14 central government expects to spend almost $503 million and in 2014/15 $507 million.

The document says that the UDP government is taking “definitive steps to control expenditure in a sensible and logical manner,” while the figures clearly reveal a continued increase in spending. “The government has commenced an extensive review of public sector entities aimed at reducing the cost of delivering services to the public. The SPS has established clear targets for their reduction of operating expenditure over the next three financial years,” the document states in face of the growing public spending.

While the figures indicate an increase in spending, they also project a surplus in excess of $20 million, $30 million and $40 million in each of the respective financial years as a result of projections for an increase in revenue.

It is not clear how the revenue is to grow. Despite talk in the document aboutrevenue enhancement and the development of “a more stable and sustainable revenue base for government” and “options for new revenue streams”, there is no indication of what these will be.

McLaughlin said he had very real concerns that government was predicting an increase in revenue without explaining how it would be achieved and without explaining why the country could trust this figures.

Speaking from experience, he said, he knew all about the problems associated with government’s projections. He pointed to the predictions made by the financial experts during his time in office and said the administration he had served in had fallen victim to unfounded economic forecasting, not least during the last financial year of the PPM government. McLaughlin pointed to the now infamous situation of the surplus predicted by government’s technocrats that turned into what the current administration has claimed became an $80 million deficit.

On 30 April 2008 Financial Secretary Ken Jefferson delivered the budget for the fiscal year 08/09 and predicted $501 million in operating expense, which was already $12 million more than he had predicted in the SPS statement delivered in the December before that budget, but as Jefferson had called for projected revenues of more than $28 million, all appeared to be well. Given what happened, the opposition leader questioned how government could expect people to have faith in the most recent projections.

“We have done nothing since then to change the economic forecasting model,” McLaughlin said. He pointed to the failure of the predictions every year since then, including this fiscal year, in which a $12 million plus surplus has now turned into a deficit of $4.5 milllion.

The PPM leader said he had real concerns about the future situation as government had produced nothing concrete to show where the increase in revenue would be coming from.  At the same time he pointed to an increase in public spending, despite the constant claims by the government that it had got the public finances back on track.

Category: Politics

Comments (55)

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  1. Anonymous says:

    Ask the Hon Premier why he is taking a Cayman Brac band to Florida to play for some "party" that the band members dont know where they are going or why all they know is that they leave on such and such a flight to Florida. Who are they playing for when where what and why. Always spending money and never being transparennt about what it is for.

  2. Shock and Awe says:

    You can not possibly have any sort of surplus in Government accounts when Government isn't paying into Civil Service Pension and Health. And hasn't. And in fact is hundreds of millions of dollars in arrears. Voodoo Economics?

  3. Anonymous says:

    Why not start pulling in all those government gas cards that are out there for the overpaid government employees that can well afford to put gas in their own cars.  I know of one who also runs a condo rental business and spends most of her day running up and down using government gas!

  4. Anonymous says:

    And who is surprised?  How could it possibly be anything but up?  There were so many pay offs that I lost count and may I add more to come eg..GLF, the wonderful Slush Fund, travelling expenses, bodyguards, cooks, housekeepers, etc

  5. Anonymous says:

    The Premier listens to no one, no even his own cabinet. With him in charge there will never be any "collective heads together". He is the only head that counts. The opposition cannot even get a discussion on the agenda, how do you propose that they all make a decision together.

  6. Anonymous says:

    To the person who wrote "To the people of Cayman" do you really think there is a better alternative to compare are problems too? Like most votes he won by thin margin. Same as with George Bush and John Kerry. ALL Politicians are Jokers. At least McKeeva didn't kill tens of thousands of Civilians with stray ordinance trying to serve up a lie in Iraq. No Politicians are good and that is a simple fact. They are jaded like a Chameleons switching color to gain polularity. If they didn't have this ability they would never get voted in. Look at the circus line up for the US Elections. The more educated the politician the more Dangerous. I moved here 10 years ago from the USA. I never regreted the move. We are forgetting. At least our politicians are predictable. Lets just hope Iran doesn't shoot a missle at Israel becuase we'll have bigger worries when the US, China, Syria and Russia Jump in not necessarily on the same side.

     

    • So says:

      "The more educated the politician the more Dangerous"

       

      So wa u tryin say? Mackeewa nah dangerous?

       

       

      • Anonymous says:

        I'd hate to imagine if he WERE educated.

        • Well says:

          If he did have a proper educatiion I would venture to say he would probably be a great leader and one who used his "powers" for good and not evil.That is the whole issue in a nutshell, our Premier is not educated, hasnt had formal education, hasnt been to an ethics class in his life, is not schooled in Economic theory and as a result cannot apply modern Economic theory to his administrations policies. Instead his management style is based on what his advisors suggest would be "Good" for us but unfortunately he needs to ask which "Us" are they referring to. The Premier is out of his league, and the brainiacs aroudn him know it and use him to their own advantage. I would like to make an appeal to him to rid himself of the greedy, self centered, egotistical leeches I see scurrying along behind him, and straighten up!

          His behavious is reflected in the type of residents we are attracting to come here. It seems that we no longer attract civic minded honest people, but instead recent years have seen an influx of greedy, selfish, racist people to our shores who are just here to scavenge. Yes there are good people coming here, but those that are making a good living are for the most part the scum of the rest of the world. 

          This all has to naturaly come to an end. There is no way the Premiers applecart will continue to be in an upright position.

           

           

          • Anonymous says:

            An educated assessment, I would venture to say, and thank you. I do note that it leaves us with exactly the same bottom line…McKeeva must go if we are going to save this country. 

          • Anonymous says:

            I am afraid I disagree. Education does not cure greed or unethical behaviour. It may perhaps make one more adept at disguising it. But you are right that the Premier is completely out of his league and his hardcore supporters apparently do not recognise it.  

  7. Anonymous says:

    First and foremost this bleam game needs to stop it is just as much UDP fault as PPM this country was in debt long time before PPM took over. But Mr. Bush is  very good at putting the bleam on someone else instead of trying to fix the problem he made it worst.If you are awear that you country is in such debt when taking over  why in Gods Green earth will you contiune to contribute to  add to the debt Mr. Bush has travel from here  to Timbuktu and back how many times to this and that crap cancelling contracts then have to pay out money for doing so. What Mr. Bush needs to do is to collect those million from the RITZ  that is owed to the Government that will help put a big dip in to the hole . England doesnt want to hear why we are in such debt they want us out of it and at this point i dont think PPM or UDP  is the answer they all need to goooooooooo. 

  8. Anon says:

    Lots of babble but no action. Lets:

    1. Stop Affordable Housing, its corrupt and unnecessery, Frank Hall is doing a great job.

    2. Stop the Bell Tower, it has no financial advantage to any of us.

    3. Finish and enlarge the new John Gray High School, dump the one at Frank Sound.

    4. Dump Cayman Airways, its nice, but we cant afford it.

    5. Paloma is over, curtail excess Govt support in the Brac.

    6. Next budget, demand that the Governor steps in to curtail slush funds. How did the FCO miss the last one.

    • Anonymous says:

      I agree with all except 3 and 4. It is far too late to dump the school at Frank Sound which is due to be completed in a few months. We can't afford not to have Cayman Airways.  

    • Anonymous says:

      There is no way to enlarge John Gray High School, there is no space. The eastern district high school has been talked about for 30 years now and is badly needed. It will be full to capacity when it is opened and will take a lot of traffic off the roads into George Town. I guess you've never been stuck in that, particularly on Walkers Road.

      I agree with 2, 5 & 6, but surely we need to get rid of the Turtle Farm – take it back down to just being a turtle attraction and I wouldn't mind subsidizing it a bit for the sake of the breeding programme.

  9. so Anonymous says:

    The people of Cayman were dumb enough to elect a 5th grade drop out with nothing but failures under his belt and then expect him to beable to add and subtract for them. Now that this has been proven time and time again to be unwise they expect the same failure prone large figure to some how fix things. You all might blame him but I think the failure is the people of Cayman.  You all want "one of your own".  You got one.  Your only hope is to elect someone smarter, more ethical (In a first world standard), and competent then you are.  But then you do not have the ability to trust someone like that do you?  Your screwed.  Bush's plan…2 +(-7) =10.  For those who can add, subtract, and think for themselves plan on staying and haveing most of your paycheck going to pay for Bush's tribal up keep for the rest of your life.  Or leaving.

    • Whodatis says:

      Re: "The people of Cayman were dumb enough to elect a 5th grade drop out with nothing but failures under his belt and then expect him to be able to add and subtract for them. Now that this has been proven time and time again to be unwise they expect the same failure prone large figure to some how fix things. You all might blame him but I think the failure is the people of Cayman.  You all want "one of your own".  You got one.  Your only hope is to elect someone smarter, more ethical (In a first world standard), and competent then you are.  But then you do not have the ability to trust someone like that do you?  Your screwed."

      My goodness – are you serious?!

      It is times like these that I really do hope there is a covert conspiracy to stir up friction in the Cayman Islands, because that is the only circumstance under which I could excuse someone holding such prejudiced, insulting, and ignorant views in regards to Caymanians and the wider world in general for that matter.

      Tell me, does your perspective apply to Americans, Brits and Europeans today considering all those nations are suffering from an economic state far more severe than ours?

      America has a long roster of Harvard and Yale graduates having been at the wheel; Britain has elected many an "OxBridge" graduate as Prime Minister … but look at the state of those countries today my friend.

      I am not a great fan of our Pemier, and this post is not in his defense – but you sir / madam are very out of line with your comments.

      Furthermore, and most importantly, you have managed to insult an ENTIRE island-nation of people by essentially calling them stupid and suggesting that any elected individual will be a failure as a result of this inherent stupidity.

      You are such an inspiration to mankind – thank you so very much, lol – you insufferable fool.

      Re: " … more ethical (In a first world standard) …"

      Do you mean someone like George W. Bush or Tony Blair … the international war criminals?

      Honestly, for the sake of your mental well-being, I do sincerely hope that you do not reside in the Cayman Islands or at least do not intend to remain here on a permanent basis. Individuals like yourself have no place in our community.

      Therefore, kindly do us a favor and spread the word to your immediate circle and leave at your earliest convenience.

      • Jamie Jordan says:

         

        Re

        The people of Cayman were dumb enough to elect a 5th grade drop out with nothing but failures under his belt           TRUE

        and then expect him to be able to add and subtract for them.           TRUE

        Now that this has been proven time and time again to be unwise they expect the same failure prone large figure to somehow fix things.  TRUE

        You all might blame him but I think the failure is the people of Cayman.

        WHO ELSE?  The British I suppose.

        You all want "one of your own".           TRUE

        You got one.      DIDN’T YOU JUST!

        Your only hope is to elect someone smarter, more ethical (In afirst world standard), and competent then you are.  THAT’S ALL THAT ANYONE IN ANY COUNTRY HOPES FOR

        But then you do not have the ability to trust someone like that do you? DEBATABLE

        Your screwed.

        He means YOU’RE SCREWED – but unfortunately the sentiment is TRUE

        There isn’t one factually incorrect statement in that piece.  I’m certainly serious and Bush is stirring up all the friction there could possibly be without any assistance from anyone else, Caymanians or expats.

        Who cares what is happening in America, the UK or Europe?  Stop going on about it.  You’re obsessed.  This is Cayman and the whole country isn’t stupid – just certain individuals.

         

         

         

         

         

        • Whodatis says:

          Re: "Who cares what is happening in America, the UK or Europe?  Stop going on about it.  You’re obsessed."

          Say wha?!

          Who cares?

          Suddenly the merits of an argument are solely dependent on the circumstances of the Cayman Islands?

          *Context is everything in life my friend. Without it any and every one could be considered an all-knowing genius.

          Lastly, kindly observe the number of posts regarding Cayman by individuals such as yourself on a daily basis on this very website – then tell me who is "obsessed". The problem is that many of you hate to be reminded of your own (original) national reality.

          At the end of the day I take comfort in the fact that my little Cayman is in a much better position than "America, the UK or Europe" .

          Tell me, what gives you comfort?

          🙂

          • Anonymous says:

            Ahem, excuse me, but your little Cayman is not in a much better position than "America, the UK or Europe." Your kind of thinking demonstrates why Cayman got into financial problems in the first place – deny the massive problems mounting and the true position Cayman is in, sweep it under the rug in the hope it will sort itself out on its own, gloat over the fact that other countries are having problems too, as if that somehow makes your own problems any lesser than every other country.   The effects of unfunded pensions, health care and ever increasing spending by Govt is not yet fully felt, and it remains to be seen what austere measures will have to be implemented to even get Cayman through the next couple of years (forget about surplus and prosperity anytime in the immediate future).  You are soon going to get a rude awakening as the financial situation keeps unfolding itself more clearly and more and more people will keep on tightening their belts to the point where they cut off blood circulation.   

            • Anonymous says:

              This, and the fact that Cayman has none of the international obligations these larger countries have.  It is easy to sit back and criticize others' handling of complex and dangerous situations when your hand is in your pocket.  

      • Anonymous says:

        Sorry I hit a nerve with you.  Please feel free to not include yourselfe where you don;t feel you belong.

        • Whodatis says:

          That advice is quite difficult to follow considering that I am a Caymanian … and you blatantly made wide-sweeping and generalizing comments about … Caymanians.

          (By the way, a reply that spoke to the issues at hand would have been appreciated and respected. However, you are excused – I guess you had none.)

    • Anonymous says:

      All of the people of Cayman did not vote for that man and they don't vote for the premier. Educate yourself before you insult all Caymanian voters. I never have and I never will vote for McKeeva Bush but as long as more people vote for him than for any other West Bay candidate we will be stuck with him. No UDP MLA has the nuts to vote against him.

      • so Anonymous says:

        My bad! I should have said  "to all of you dumb enough too……………..

        • Anonymous says:

          NOT your bad! You did not say ALL of the people of Cayman! I certainly wouldn't want to be included in those Caymanians either but at the end of the day it WAS the people of Cayman who voted. Who the cap fit, let them wear it.

  10. Chris says:

    The million dollar question is why is the budget increasing if the population is decreasing?

     

  11. Anonymous says:

    Looking at comments (including my own) posted under an earlier story why should we even trust these figures?

    It looks like what we have here is a situation where debts, like the $6million apparently still owed by the developer of Ritz-Carlton, are shown as government income even if they are never actually paid.

    Based on those earlier postings, an unpaid debt, even if it is never settled, actually has more value to CIG than one that is written off or subject to unsuccessful moves to try and recover it.

    If I understand this correctly, in the former case the money shows as income during the year in which it was incurred but if that money never gets handed over nothing changes, except that the government doesn't actually have the cash to spend. It's all covered up in the paper trail that makes up CIG accounting.

    But if you go for either of the latter options the loss is deducted when the debt is either written off or proves unrecoverable and, along with any expenses incurred, comes out of that year's budget.

    I can, just about, understand the accounting logic of this but in terms of cold, hard cash it seems daft. The whole process seems slanted in the favour of the debtor and it undemines any attempt by CIG to properly manage their annual budgets.

    • Anonymous says:

      Unpaid debt owed to the government should show up somewhere in an Accounts Receivable column. Everything should balance.

       

      However, giventhe state of government accounting, I wouldn't hold my breath

      • Anonymous says:

        So if Mr. Ryan cannot pay this unsecured debt our accounts will look much worse? 

        • Anonymous says:

          Yes, if Ryan does not pay, the debt would eventually be written off (as an expense). I wouldn't hold my breath waiting for that to happen tho'. No one will want to be in Cabinet when 6 million is added to expenses for the year as it would contribute to any deficit or reduce any surplus.

          • Anonymous says:

            Regardless of who is in office at the time when it may have to written off the blame should rest squarely on the shoulders of the one who permitted him to suspend payments in June, 2009 and did not obtain any security for payment.  

        • Anonymous says:

          It is easily made secure by a charge (by order if needed) of one of his many properties … But that would take a politician with some fortitude, and an effective legal department and……

  12. Anonymous says:

    Right now, Cayman is between a rock and a hard spot. The UK has given McKeeva his marching orders while the economy continues to fall and expenses arise.  Moreover, off shore financial centers are under attack all over the world and tourism is on the decline.

    Anyone can see the inevitable result of these trends. Obviously, we must head them off. But how?

    Here are a few solutions. Reduce the  size and expense of government. Start increasing the efficiency of the country instead of opting for less efficiency in the hope of creating more government jobs.  Pro actively seek out adequately wealthy people and invite them to retire here. Advertise for prospective retirees. Let them bring in huge amounts of money to spend, which would invigorate our services industry and create lots of real jobs. Remove government  from interference with employment..

    These are only a few of the solutions available to us. But we had better get started on them, and soon
    .

     

  13. Anonymous says:

    The bloated civil service within the government represents the largest single voting block and both political parties know this. It is the elephant in the living room.The dilemma, a civil service that needs to be cut back with politicans who want to be reelected.

    • Anonymous says:

      well said…how can anyone give thumbs down to the truth?

      • Anonymous says:

        My friend that really all depends on who they voted for in the last elections and continue to be hell bent on blindly supporting regardless of much their very long list of miserable failures and screw ups continue to pile up in their very faces every single day.

    • Anonymous says:

      The big shocker is that people are shocked that government expenses are going up!!

      The fact of the matter is that the size of civil/public service and expenses will continue to increase.  Thelatest cause includes the implementaion of the new Constitution and now gearing up for the new Bill of Rights. Before that it was Financial Reform and decentralization of human resources and the subsequent hiring spree. FOI also caused increases.  No doubt the new schools will also have an impact on costs.

      There seems to a be a dis-connect between what the public want from government and what the public have agreed to pay in additional costs. All too often we embark on projects and initiatives and we haven't got a clue what it is going to cost in capital outlay, much less ongoing yearly operating costs.

      Lets hope under the new framework for fiscal responsibility that all projects and initiaitives with large expenses (both capital and operating) are properly costed and analysed and the general public are provided these details and have the opportunity to make their feelings known BEFORE the government can proceed. 

  14. Anonymous says:

    Cayman needs leadership. All it has now is incompetent and possibly XXXX management.

     

    Solution? I desperately hope that there are competent and ethical leaders in the wings who will step forward and take the reins of power in the next decade.

     

    I desperately hope that Cayman can survive by muddling through the current mess until the competant and ethicalleaders can take the reins.

     

    I despeately hope that the competant and ethical new leaders can take power from the incompentant and unethical leaders. That will prove to be difficult becase the incompentant and unethical leaders play dirty.

     

     

    • Anonymous says:

      And I desparately hope that the current government doesn't finish the job and drain the country completely dry in its last few months in office

  15. Anonymous says:

    Just a note. In analysing staff costs in a government department that is looking to outsource, their cost of staff benefits (paid by CIG, not the staff) is about 30%. 

    In the private sector, it is more like 10%.

    Thinking as a business, to compare efficiency and effectiveness of public sector, we need to therefore look at base salaries paid in government then add 20%. 

    Only then are we comparing apples with apples on staff costs, and in measuring efficiency.

    Flipping it to the employee way of thinking, if you are a government employee, don't complain unless you are paid at least 20% less than someone in a comparable job in the private sector, as that is literally the difference in the cost paid by your employer for your benefits.

    Oh, and that doesn't count the higher job security in the public sector, as what the budget projections and past history show us is that no politician will ever cut Caymanian jobs in the publicsector. All this at a time when private sector jobs are being decimated in many areas and Caymanian small business entrepreneurs are struggling or simply going out of business.

    We all recognise the need for austerity in the public sector, including job cuts. However, will even one brave politician step forward and say so ?

    The honest answer ? No. They all depend on public sector employees votes, and those of their families, to elect them.

    I wish I had the answers.

  16. Anonymous says:

    "Opposition Leader Alden McLaughlin has said that this is a very dangerous place for Cayman to be, given how poor past revenue projections have proved to be." Yes, dangerous. If Alden gets another four years so to avoid another Bush term, I believe we are in for another recession more serious than the one we had before!  It will be a UDP – PPM cycle all again. 

    • Anonymous says:

      Hopefully it won't be because hopefully the Cayman public has learned their lesson and the UDP will never have another chance to 'run' this country.

    • Anonymous says:

      Economics 101 – a politician can't cause a recession, no matter how much you hate them.

  17. ubelievedat says:

    projections, projections, projections………….and still no action!!

    the premier has proven to be the biggest "blabber mouth" he once spoke of

    what we're currently experiencing are the same results he gave Cayman during the UDPs last reign of  mid 2001 – mid 2005……..absolutely nothing positive.

    how long will his supporters allow him and the other UDP members continue to drag this country into the pits of financial ruin and reputational damage???

    I can only arrive at the conclusion that it must be for personal gain cause nothing else makes sense……………

     

  18. Anonymous says:

     ' The UDP government is taking “definitive steps to control expenditure in a sensible and logical manner” '; that being said, we intend to have the premier travel as much as Heavenly possible, whilst accomplishing absolutely nothing.

    Did ya get that last bit, we said "whilst accomplishing absolutely nothing.

     

  19. anonymous says:

    Spending will continue to climb due to our new constitution. It requires another 500 civil servants to implement. That does not include the potential liabilities from the lawsuits related to the same.

    • Anonymous says:

      I don't know where you got that figure from but anything to divert attention away from the fact that Bush is already costing us millions with lawsuits, not because a breach of human rights, but simply on account of his reckless conduct of public affairs.    

  20. Anonymous says:

    Stop the squabbling, posturing and the “I’m smarter than you and I know what’s better for the islands”!

    We elected all of you to care of us, make our lives better and yet for some reason we end up suffering.

    Quit your bickering. If you all know the answers, put your collective heads together, swallow your pride and do right for your country and the people.

    • Anonymous says:

      Remember the Premier is boss, and does not want any ideas from the opposition.  He is king of the yard and when he crows, no one can reply.  I am in charge.

    • Anonymous says:

      How do you expect this to happen when the premier doesn't listen to anyone, including his own cabinet? He will never listen to the opposition, he doesn't even let their proposals be put on the agenda.

       

    • Anonymous says:

      Stpop expecting big things from small minds.  They don't even understand the question. If only the Caymanian people could understand this.