Government’s deficit grows

| 05/03/2012

l108527-100.jpg(CNS): Although the Legislative Assembly was set to meet Monday morning to address supplementary spending for this financial year, the planned sitting was cancelled Friday. Sources tell CNS that government is currently wrestling with a deficit somewhere in the region of $10-20 million for this financial year, in contrast to the predicted overall public sector surplus of around $4 million. It is understood that the administration is now seeking ways to plug the hole in the public finances. A combination of the “no more borrowing” policy and pressure from the UK is likely to force government to cut make major spending cuts in the last quarter of this financial year.

Legislators were due to meet today 5 March to deal with the Supplementary Appropriation Bill for this financial year and the Supplementary Annual Plan and Estimates. This would be to ensure extra spending on police and security and other extra government expenses which had not been budgeted for in the 2011-12 financial plan.

In December when the premier delivered the Strategic Policy Statement (SPS) he announced that there was no longer going to be a surplus but the public sector deficit was running at around $4 million. However, it could now be as much as $20 million.

Despite the fall in public coffers, the premier re-instated the civil service cost of living allowance in December, which has put further pressure on government spending. It is also understood that while public expenses have increased, government revenue has declined. With the UK now in charge of government finances and government unable to borrow to fill the financial gap, it will have to make significant spending cuts across the last quarter of the 2011/12 financial year.

No date has yet been set for when government will now bring the Supplementary Appropriation Bill or deal with other outstanding business. The country’s parliament last sat briefly in December some two weeks before the Christmas break and has not resumed since, although there are a number of outstanding issues have not been addressed.

Category: Politics

Comments (67)

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  1. Anonymous says:

    Must be working with Obama ! We got change alright (jingle , jingle) now we just ned to change you. 

  2. Anonymous says:

    Mac needs to set his new Chief of Staff onto the problem just as soon as he has completed the Infrastructure Report he was tasked to carry out three years ago.

  3. Anonymous says:

    A quick hold to be plugged would be to fill up the new government building to capacity (every desk filled, because the Government shouldn't be needing expansion space any time soon) and then get rid of all the leases that they have which are paying rent to Landlord unneccessarily. Its very simple.

    • Anonymous says:

      Agreed. Why did the new office for labour and pensions need to be on private property? At least 30 percent of the desks in Govt Admin bldg are not filled or occupied – that does not mean they need to hire more ppl, just bring so of the services into the bldg.

      • Anonymous says:

        Another 30 percent are filled and occupied, but NOT being used. This is especially true on the top floor.

  4. Anonymous says:

    How about we use the anti-corruption law and asset seizure to claw back some questionable enrichment?

    • Anonymous says:

      Condos, profits from fronting, land vesting in the crown, whole businesses becoming owned by the Caymanian people. We would have so much money we wouldn’t know what to do.

      If only we enforced our laws.

    • R.U. Kidden says:

      I vote "YEA" on that!    Can I vote twice?

  5. Anonymous says:

    Simple solution – the Premier can sell the "intellectual property" in the deficit in the same way he is going to sell the "intellectual property" in the port to make up the million dollar loss on the cancellation of the GLF contract.   A man of great intellect is our Premier.

  6. Anonymous says:

    Who is the elephant in the room?

    One does not have to look far to see who it is.

    For example, five more MLA's, a COL increase, more departments and department heads, a helicopter costing $1300.00 / hr to run, etc. etc.

    And all extracted from the struggling private sector.

  7. Anonymous says:

    Whatever happened to the 90 days that the UDP were supposed to be turning the economy around in?  If this $20 mil is Ken-No-Nomics, it may be $80 mil by June just like what happened to PPM.  The tide is high and I'm holding on! Lord help us make it through another year.  Elections can't come fast enough. 

    • Anonymous says:

      Like the PPM deficit, he put an 8 in front of the 90 days. Soon he's going to need another 8 but don't worry, he's got plenty

  8. Anonymous says:

    Must be about time for another foreign trip with my growing entourage and new Chief of Staff. Where shall we go bloggers? London? No, doing that later for the Olympics. Could check up on some Chinese funded projects around Africa. Or perhaps there's some Tax Info exchange deals to sign in Utopia somewhere (anywhere), we havent done any of those for a while. All else fails theres always 'lobbying' in the States to be done or a tourism conference in Vegas.

     First class on Virgin Atlantic is great you know. More lobsters all round please.

    • Anonymous says:

      Isn't it rich?  Isn't it queer, losing my timing this late in my career?  And where are the clowns?  There ought to be clowns. 

       

      Isn't it bliss?  Don't you approve?  One who keeps tearing around, one who can't move. Where are the clowns?  Send in the clowns.

       

      Just when I'd stopped opening doors, finally knowing the one that I wanted was yours, making my entrance again with my usual flair, sure of my lines, no one is there.

       

      Don't you love farce?  My fault I fear.  I thought that you'd want what I want.  Sorry, my dear.  But where are the clowns?  Quick, send in the clowns.

       

      Don't bother, they're here.

       

  9. SKEPTICAL says:

    When you have as a "leader" an uneducated ,XXXX who initially was able to surf what seemed to be an infinite wave of economic growth, supported by a blindly partisan electorate in WB, and one or two other odd constituencies, it was always potentially a recipe for disaster. Now that wave has come crashing down and he has suddenly discovered that he cannot even tread water, let alone swim. Bush is so far out of his depth that the best life-jacket in the World could not save him. Suddenly, weare looking presently at a $20 million deficit – if he cannot make the necessary savings between now and June – what will the final figure be? He should be challenged, by the supposed "Opposition" , to provide credible evidence of what new sustainable revenue his government has generated since they came to power, together with a "Balance Sheet" of what Capital sums the government has spent in wasted "consultation" fees, and out of court settlements for perceived breaches of contract – and this ignores the millions in hand outs to churches etc.. If I was Mr. Dart – I might be looking to appoint someone to roll up the carpets, and turn out the lights, just in case…….

  10. Anonymous says:

    Whatever the deficit there is no reason to suspect that the luxury travel or the vote buying will decrease – in fact they will probably increase.

  11. Anonymous says:

    The deficit could be marketed as a "surplus adjustment". Heh Heh. The phrase sound very good especially around elecction time.

     

    It worked for Lisa Simpson when she was the President of the United States and Millhouse was her chief advisor. LOL

  12. Anonymous says:

    It is about time the Government made some cuts……been bloated, expensive and poor value for money long enough. Thank god the UK are not going to let us borrow any more. Enough is enough.

  13. Lachlan MacTavish says:

    Press conference, we are in the black, accounts report, we are in teh red, last audited accounts ?

    Sign the petition, save your country.

    Lachlan MacTavish

  14. Anonymous says:

    Several government organizations, including higher education, are talking about promotions. Its like they are ramping up their salaries to get some quick cash before the crash comes…and the second squeeze is coming.

  15. Anonymous says:

    How about narrowing by 6 million by having Mike Ryan pay up!!!!!

    • anonymous says:

      it appears that Ryan is in no position to pay anything….if media reports are accurate.

       

       

    • Anonymous says:

      Ryan paying will not narrow the deficit. It was accrued income in the year the concessions were given. Payment would however help the current cash flow issues somewhat.

  16. Anonymous says:

    Should we not ask Mike Ryan to pay up? Add that to the 3 million Mac caused us to have to pay to GLF and all balanced again at the lower end of the defecit.

    • Doucet Deja vous says:

      Ryan has no money to pay anyone hence them demand for loan repayment. Only a blind man could not see this taking place several years ago.

    • Anonymous says:

      Mike Ryan paying up will not affect the deficit at all, it was accrued as income when he was given the duty break. It will help Governments cash flow but not the deficit. If the GLF payment is paid back by Mac that would reduce the deficit as it would have been an expense in the current financial year.

  17. Anonymous says:

    The good Lord took that 4 million and made crime go down by 1%. Now we need to come up with 396 Million and it will all go away.

  18. Anonymous says:

    I guess you will want us to succumb to a hand out loan from Dart to bail us out. Why dont all of you be honorable and take a pay cut for country and people ? The Queen did!

  19. Anonymous says:

    Let’s just substitute surplus for deficit, call it a scheme, and be happy!

  20. Anonymous says:

    How can we be in the hole 20 mill when we as Caymanian voters were told that there was going to be a 4 mill surplus……. oh yah, we were lied to!

  21. Anonymous says:

    this is why this government is a failure:

    they failed to implement the miller shaw report and made no cuts to the overstaffed, overpaid underworked civil service…..instead they increased taxes and fees on the businesses and the public in general……this lead to a contraction of the local economy when they were already facing a recession…..this is has lead to the government not having any money and not being able to get anything done in the last 3 years……

    they have no-one to blame but themselves….

     

    • so Anonymous says:

      And all those who voted for and then put up with total incompetence for the last ten years.

      the Millar report was just a cheap(for them)smoke screen that worked as intended.

  22. Anonymous says:

    The best way to deal with this is to employ more MLAs…. clearly…… especially in West Bay….. obviously…..

  23. Anonymous says:

    This is excellent news.

    The PPM must be very happy about this.

  24. Anonymous says:

    There will be no more meetings of the LA to answer questions or give official updates on the budget until AFTER the next elections.

  25. Anonymous says:

    we cannot afford the Clifton Hunter school building.  Even if we finished it, we cannot afford to maintain it.  Make a deal with Shetty on the building and let him figure out how to pay the monthly electricity bills etc before it puts us any further in debt.  It would be nice to have, but we simply cannot afford it!

    • Anonymous says:

      Have you been inside JGHS? Ask for a tour. I dare you!

      • Anonymous says:

        Apparently you haven’t seen the size of Clifton Hunter School. You could set up a medium size town in there let alone John Grey!

        • Anonymous says:

          I have seen it, you seem to fail to understand that the site is designed so that the school can expand if and when necessary. It is also intended to be a community centre, adult education centre, hurricane shelter, community kitchen for after the next Ivan. Don't know of any towns that small, stop exaggerating. Many classrooms in JGHS have not changed since 1981 when I left there, it is a national disgrace. Even Rolston has admitted that the school will be full when it is finished and may not be big enough.

          • Anonymous says:

            Ah yes, an unintended consequence of the cabinet status grants. Not enough room given the massive growth in the number of Caymanian children.

          • Anonymous says:

            I think it's the size of the price that most concerns us, not the square footage of the classrooms.

  26. Anonymous says:

    Old saying, "Deficit spending equals bankruptcy pending."

    Just wait until the pay checks start bouncing, then the fun starts.

     

  27. Anonymous says:

    When the fox is in charge of the hen-house, with seeming immunity and no liability, what do you expect?

  28. Anonymous says:

    And Mr. Dart is saying "Music to my ears." I don't want to hear one more word about he is buying up the place. He can only do so because our politcians cant read a set of financial statements and are selling us out via utter incompetence. 

  29. Anonymous says:

    30% cut on LA salaries for love of country i dare you.

    • Anonymous says:

      Also cut the number of MLAs down to 9. That's all you need to run a small town like Cayman.

      • Anonymous says:

        But then they would have to do some work…….maybe…..

      • Anonymous says:

        I wish people would stop with this ignorant comment. Cayman is not merely a small town; it essentially functions as a country. Small towns need not concern themselves with the complexities of immigration, international agreements and diplomacy, actual legislation (as opposed to some bylaws) etc.

        Reducing the number of representatives could only increase corruption as power is concentrated into fewer hands.

    • Anonymous says:

      I totally agree with you 150%!

      They should all have salary deductions across the board!!! That's how we should attempt to clean this mess up!

      And as for the Civil Servants, who I shall add are not quite Civil Servants– cut them too!! 

      Milking Cayman's pockets dry, and they are sitting on their tooshies all day long doing NOTHING but are becoming millionaires!

      • Anonymous says:

        Totally agreeing would be 100%

         

        150% means you MORE than agree, 1.5 times to be precise, to be precise, it is 1.5 times more.

         

        Thomson & Thomson

  30. Fedup says:

    Ugh!

  31. Anonymous says:

    well when you look at the big picture…since big M came back government is basically the same size and the govt. owned corporations have not made any changes….so it is no wonder nothing else has changed not rocket science.

  32. Knot S Smart says:

    Seems like a good time to give some more money to the churches!

    And throwing some money at potential candidates who will run against opposition members.

    And oh yes – we are not paying enough members of the LA already – so lets add a few…

    • Anonymous says:

      Throw a little something my way and you’ve got my vote!

    • Anonymous says:

      The progress on the shelter-church just west of BT Primary School has not budged much in the last 6 months, must be waiting for the new fiscal year to roll around to receive another "drawdown"

  33. Anonymous says:

    recall the church money handouts?  or was that just vote buying…

    • Cat says:

      Actually, I'm starting to think that all that money was given to the churches as tithes,offering and prayer money, in the hopes that they can pay their way out of purgatory and be prayed for, for all the financial sins and the sins against their people they have committed.

    • Anonymous says:

      It was a blessing from God that churches got that money. Terrestrial people weren't involved.

    • Anonymous says:

      That was an expense in the current financial year and is, therefore, part of the deficit problem, so is paving parking lots in Cayman Brac, changing the bathroom colours at GOAP, $3,000,000 to GLF, flying first class everywhere, other "nation building" expenses………

  34. Anonymous says:

    I heard that massive salaries increase are going on at the Government Authorities(Port auth,hospital..etc rigth now).I hope the government do a frezze on those.Can CNS check on that for us.Because the country cannot afford that rigth now.

    • Anonymous says:

      Before we all go excited, salaries are outside the control of the elected folks, thats Government and head of CS. However I agree with you that they should be going down not up.

  35. Anonymous says:

    ….of course it grows!