Proper cuts needed to budget

| 22/06/2012

cut-spending.jpg(CNS): The opposition has warned that “hacking away at the budget” without proper examination of the needs of government departments will cause serious problems down the line for the UDP administration. According to the premier, civil servants had presented operational expenditures for the next financial year of $630 million, which was honed down in a matter of days to $498 million. PPM Leader Alden McLaughlin said slashing public spending requirements without proper analysis of the ramifications means that, once again, when government gets the nod form the UK it will be presenting another unrealistic budget. MLA Ezzard Miller also questioned why government is not following the cuts recommended in its own review.

As the current government’s final budget presents yet another financial headache for the premier, the need to slash spending to meet the requirements of the Strategic Policy Statement (SPS), the Financial Framework Agreement (FFA) with the UK, and the three year plan has proved difficult.

It is not clear whether cuts will have to be made to public services or if additional fees will need to be placed on an over-burdened private sector in order to allow government to balance the books but the opposition says it is unlikely to work without genuine analysis of where cuts are being made and what that will mean to each of the departments.

McLaughlin explained that when the Department of Children and Family Services tells government it needs a specific amount to deal with the demands it expects over the next twelve months, randomly reducing that amount won’t stop the demand. Without policy changes or proper analysis of where cuts can be made that affect core services, the department will still need the money it asked for.

“You can believe that this budget is unlikely to reflect the reality on the ground and there are going to be some real problems,” the opposition leader told CNS. He warned that as government enters the slow months of the year it will need to borrow over and above that requested in the budget just to keep the public sector going until it begins to collect revenue later in the year.

Miller, the independent member for North Side, has also questioned why government has not taken on board the recommendations of the various civil service reviews that have so far identified more than $50 million of savings in government departments.

Despite the rhetoric and speeches about efforts to cut spending year on year since taking office, the UDP has increased public spending. He said this was not just because the cost of delivering services had gone up but because the government had added more and more services.

“When the premier eventually delivers this final budget he will have spent far more than the PPM administration, which he has consistently criticised for overspending,” Miller added.

He said that with the savings identified by the review committees, in some cases more than two years ago, the government should have been able to reduce its spending target from $498 million to $448 million rather than having to engage in last minute cuts to a spending plan that had exceeded $600 million.

Miller said that there was, of course, no political will for government to make realistic cuts, especially with an election approaching, as ministers want the ability to spend money over the next twelve months so they can point to the benefits they have given their constituents. With a burgeoning budget and no sign of a let up in the economic slump, Miller said something would have to happen eventually

“At some point in time, politicians are going to have to be willing to cut some programmes,” he said.

The MLA pointed out that government may well feel that the solar panel project will be popular with voters but if government had not placed so much duty on fuel it would not need to borrow to fund this expensive new programme in the first place.

He pointed to the recommendations that have been made about centralising government finances and human resource management that would cut a significant number of high paid jobs.

Miller said it was essential that government began to cut the civil service. Acknowledging that job losses wouldn’t be popular, he said that every local public sector worker whose post was lost could be assisted to find work in the private sector before the job was cut.

Pointing to the number of work permits still being issued despite the global recession, Miller believed qualified accountants and HR personnel would not be difficult to place and would make an impact on government’s burgeoning wage bill.

Print Friendly, PDF & Email

Category: Politics

Comments (29)

Trackback URL | Comments RSS Feed

  1. Anonymous says:

    "Pointing to the number of work permits still being issued despite the global recession, Miller believed qualified accountants and HR personnel would not be difficult to place and would make an impact on government’s burgeoning wage bill."

    Mr. Miller, I agree with you most of the time, but not on this.  It is some of these same civil servants – (notice I said some, not all, because there are some good ones in government service) – and I particularly mean those senior officers and those in charge, along with subordinates who have proven to be hapless at doing their jobs – it is these ones who have messed up the country's accounting and can't tell whether we have a surplus one minute or a deficit the next because of lack of proper record keeping and accounting, it is these ones who refuse to weed out the unproductive ones that aren't cutting it, or allow their colleagyes to keep guzzling gas at the country's expense, or are unwilling to laying of some of their own who are not critical to government operations.   If these same civil servants were to be let go and take up employment in the private sector, see how quickly they would get fired.  They would't have a clue how to operate in the real world where there is real accountability.  But the primary ones to be blamed for all this, are the clueless politiciansat the top who make foolish monetary demands and unrealistic budgets and who intimidate the civil servants into doing what they are told.    None of them would last very long in the private sector – some of these politicians can't even run their own businesses successfully, much less a country, and so they invariably end up in politics because there, it is not their personal money going down the drain due to their hapless management style.

  2. Teddy Bear says:

    Can Mac not get us some cash from the ATM?

    • Anonymous says:

      At $20,000.00 a lick it would take us into thenext century to get out of this mess.

  3. Slowpoke says:

    Here we go again, with the usual Miller-Shaw (how has that double dip recession worked out for you in the UK?); cut salaries (we apparently defy economic reality in Cayman and don't need disposable income to stimulate the economy); the civil servants should just get a (non-existing) job in the private sector; if only we would move all to the lowest possible benefits instead of moving others up; etc. posts.

     

    The CS and Government in general, does need to be cut but, not during a recession.  The UK governement tried it for us and has proven that is a road to failure.  Of course, we could always ask Lord Blencathra for his opinion.

  4. Adding up says:

    The civil service needs cutting and Mac just is not man enough to do it.  Like a coward he is scared of losing votes for doing the right thing. 

    Cut the civil service by 10%

    Cut civil service pay by 10%

    Cut civil service pensions by 20%

    There would still be too many civil servants, they will still be paid too much and they will still receive to high a pension and benefits.

    If civil servants do not like it they can go elsewhere.

    • Chris Johnson says:

      Nineteen comments on a very important subject. All anonymous. Why do I bother? No idea! Caymanians please take the plunge and put your name to your comments. This is your island and you must protect it against the current incumbents and imbeciles that are in charge of the zoo.

      • Firmly Anonymous says:

        Because we live in the knowledge that Cayman is a place of fear, intimidation and corruption.

        • Chris Johnson says:

          Now 26 comments. All except mine anonymous. Will someone have the balls and become countered?
          No one bothered? CNS why bother?

    • Anonymous says:

      Hello, why don't we cut the MLA pay??? They aren't doing anything, they don't serve a purpose, they can't make any decisions…then cut udp pay, we have UDP members in west bay that you don't hear their name until election day.  COme on people WAKE UP FOR GOODNESS SAKES!!!

  5. Democracy Now says:

    If CIG has not received, nor demanded up to date accounting from myriad government departments, how on earth can it detect whether  present funding requests are valid?  We will need uhh I don't know X for the coming year.  Based on what??  Last year's numbers? The year before??  No one is keeping any records what information has been forthcoming, according to the Auditor General is either inadequate, not factual, or useless. In other words- from the bottom to the top this government couldn't find it's a$$ with both hands in a room full of mirrors. This latest budget dream reflects that. It is based on nothing.

  6. Anonymous says:

    read the miller shaw report!!!!!!

  7. Anonymous says:

    Here is what I would do.  Let's say the revenue for 2011 to 2012 was $500 million.  If we could reasonably expect the same amount in 2012 to 2013, then that is the basis on which we would work.  Now to expenses.  We are only going to spend $400 million.  $100 million is going to be put aside for MAJOR emergencies (catastrophies, not solar panels) and is to be invested in "safe/conservative" investments only.  The $400 million that is left will then be assigned according to priority.  When it has all been assigned, we will have to look at what didn't make the list to see if there is anything there that absolutely needs to be maintained and whether there are any other alternatives to funding it.  Next we will look at what was funded to see what if anything can be refined.  For example – MLA Pensions.  Shoot, not all of them need pensions, so those that are financially secured otherwise would be asked to discontinue drawing their pension.  Next the MLA pension formula would be revised to bring it in line with the rest of the civil service.  Then we'd look at Social Serivces.  The elderly, indigent, abandoned children, mentally or physically challeged would receive 100% priority.  Those capable of working, but too lazy or indifferent to do so would be weaned off within 3 months.  And so it would go, down the line with each budget item.  Now let's see who's the real leader here and make the tough decisions.

  8. socialista says:

    A well organized large government with regulations on businesses protects its citizens from predatorial capitalism. If you cut the government too much, you will end up exposing businesses to more crime and less efficient public service. You guys cant have your cake and eat it too.  

  9. Anonymous says:

    How to cut costs?  Invest and research wisely and most of all use common sense and try to get along in the LA.

  10. Anonymous says:

    Social services can be funded by slashing the department of tourism budget and the budgets of all the overseas offices.

     

    What value do they add?

  11. CHECHE says:

    Let's start with the bar tab at Barolo.

  12. Anonymous says:

    Can anyone give us the name of a country that has cut overall Government spending, before they went backrupt?

    Is it realistic to expect elected politicians to lay off voters?

    Is there anyone out there who actually believes all these "changes" being brought about in Government actually reduces expenditure?

     

     

     

     

    • Anonymous says:

      – Yes there are plenty, just use the internet to research your statements in addition to making posts here on CNS;

      -Yes its not only realistic but also patently necessary; and

      – Yes, absolutely, in addition to which there should be an efficiency audit and annual appraisals of all staff.  Those who don't cut it should be cut from the CS.

  13. Anonymous says:

    Cuts could start with McKeeva's travel budget and Lord Blencathra's lobbing fee.

     

    Cuts could then proceed by banning renewals for expat government workers. There are lots of capable, hard working Caymanians who can fill their shoes as lower cost.

  14. socialista says:

    Be careful cutting spending. As population grows, you may just need more police officers, more teachers, more government workers in social services. So you guys who believe in cutting and the market or private to do everything, where will funding come from to fight crime and deal with social programs?

    • Anonymous says:

      Everyone and every organization needs to live / operate within their means. Its that simple. 

  15. Anonymous says:

    This thing is such an unscientific, finger in the air load of rubbish. I expect revising spending from $630m to $498m would involve hitting backspace a few times and then typing a new number.  I bet they literally went "$500m? No, don't make it a round number, let's call it $498m it sounds more scientific."

  16. Anonymus-mus says:

    You know its bad when you're agreeing with Ezzard, but they are absolutely correct. Without policy decisions to cut services/programmes/etc. there can be no budget reduction. If you want something done you have to pay for it. There's only so much you can save through 'efficiencies' before you have to simply cut it out. It applies to my grocery bill as much as to government's.

  17. Anonymous says:

    The private sector has managed to cut costs in many ways. It seems to me that government does not want to do so, for their own reasons. Major firms in Cayman are not replacing people who leave and are laying off people on a regular basis. There is no non-political reason for the civil service to not do the same.

  18. Anonymous says:

    The blame starts with the civil servants asking for $630,000,000.

    • Anonymus-mus says:

      Why? What was their target? I''ll ask for a Ferari for graduation until I get told the budget.

    • Anonymous says:

      The Civil Servants always get blamed when the MLAs are the ones spending the money.Can the Civil Servants say, no trips to JUju and McKeeva?  What about the paving?  Do you think that Civil Servants can tell them no?  What about Social Services when they say no, you are not qualified and then they call a MLA who says give them the food voucher and whatever else they want?  I could go on and on but I'm sick and tired of Civil Servants being blamed for everything when they are just doing what they are told to do.  Until a Public Official is charged and have to pay for their wrong doings, the Civil Servants will never stand up and say anything about these things.

  19. Anonymous says:

    The Opposition is not being fair to the Premier. Flying around the planet first class spending the poor people's money and accomplishng nothing and arranging deals with developers that provide cash to cronies and significant others but nothing for the country is expensive. Things like that simply cannot be cut from the budget.