Premier gets overdraft buffer

| 25/01/2013

Juliana OCC.jpg(CNS): Although the premier has said that government revenue collection is on target to exceed the 2012/13 budget, she has nevertheless requested a month’s extension on the government’s overdraft and has had a verbal permission from the UK for this. Juliana O’Connor-Connolly said this was merely a precautionary measure until all of the new legislation increasing fees in the offshore sector was implemented and to see government through this quarter of the year, in which it generally collects most of its revenue. The overdraft facility, which was more than $60 million, will, however, be cut to $30 million during February.

Speaking at a press briefing on Thursday morning, the premier said that Mark Simmonds, the overseas minister, had seen the sense in the analytical argument presented to him about the need for the financial buffer as a cautionary measure and she was confident that the CIG would receive written confirmation from him shortly.

She described the short trip to London this week as productive as she was able to mend some fences and address some of the issues relating to the negative perceptions regarding Cayman’s financial services that are persisting in London. O’Connor-Connolly said that she embarked on “some quiet diplomacy” and she assured the overseas territories minister that the new Cayman government was committed to the fiscal framework and that government was working hard in the short time it would hold office until the election and would “not become lackadaisical”.

She promised that her Cabinet would not sit on its laurels and the team was 110%, even though this would prevent their ability to get out on to the streets and campaign as the election approached.

The premier said she and her deputy, Rolston Anglin, had “worked hand in glove” during the trip to the UK, which had proved so positive. While she said she did not expect that talks with the UK and the overseas minister would always go so smoothly, she spoke about the need to work through any disagreements. “It is our responsibility to seek a positive outcome,” she said. “We won’t always succeed but we can try.”

She said that efforts were made to press Simmonds to defend Cayman on the world stage as one of best regulated financial centres in the world and to refute its image as a tax haven. She pointed to the work that Anglin was now doing and said she was confident that, as the minister for financial services, government now had someone with the “intellectual capacity to wrap his mind around the issues”, though she made no comment about how that reflected on his predecessor, the former premier, McKeeva Bush.

O’Connor-Connolly also addressed questions in London regarding the sudden change of government. The premier said she was able to tell them that the transition had been smooth and legitimate, conducted via the legislative framework in line with the constitution, and the interim government would continue smoothly until the general election.

The sentiments about the success of the London trip were also echoed by the governor, who released a short statement from his office about the trip to the UK as he had been one of the eight delegates.

“This was a productive meeting, held in a positive and constructive atmosphere,” Duncan Taylor stated. “The discussion covered a number of areas of mutual interest where we would all like to see greater engagement between the Cayman islands and the UK, including access to higher education in the UK for Caymanians, access to healthcare, working together to design a competitive procurement process for the port project in line with international best practice and working together to improve the management of public finances. The minister told me he looks forward to working with the new premier,” Taylor added.

Category: Politics

Comments (24)

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  1. Anonymous says:

    So does caving in to HE and throwing Mac under the bus mean she copped a deal to forgive her own exceses??

    It seems so – but Cayman people dont forget!

  2. Anonymous says:

    Wait til Ju-Ju uses those funds to pave Lil Cayman and go on another world wind tour with her full body bodyguard

  3. Anonymous says:

    That settles it. They had a conspiracy against poor Mac. Wait till they find out JuJu is even worse.

  4. Whodatis says:

    As for the other stuff …

    I say "good move" on the part of CIG regarding the fee increases.

    Although I am not privy to the details of the changes, I am quite certain that the increases are nominal / static (not percentage-based) and focused on those entities that can well afford to absorb them.

    It is crucial for us to consider the global economic / banking climate at the moment.

    If some multi-miilionaire / multi-billionaire foreign investor considers it a wise idea to move millions of dollars from an established operation in the Cayman Islands to a new jurisdiction (requiring revised due process / set up procedures etc.) at this time – then good luck to him or her!

    Try France why don't you? After all, the income tax for the wealthy is only 75%. (Rich French citizens are currently rejecting their nationality left and right – as I understand it, some have recently applied to become Caymanian!)

    However, If you can't speak the language then you could always try the UK. Last I heard PM Cameron was suggesting a 50% tax on all incomes over £150,000.00.

    Furthermore, and most crucially, the financial industry is generally full of c-r-a-p as they moan and wail about CIG fee increases. I say that as I know of one major institution that bills its clients a mandatory $700.00 government fee yet charges up to $7,500.00 for their administration fees.

    Clearly there is room to play with, so kindly stop with the scaremongering.

    (We turnover trillions of dollars a year in this country and have done so for decades. This fact is not adequately reflected in the state of some of our infratructure, social standing and employment opportunities for our nationals. Not to suggest there has not been significant mismanagement of money, but what government isn't guilty of this … and in the name of all things sane – please do not say the UK.

    However, if mere crumbs continue to fall to the floor where much of our society now resides, we can rest assured that the masses will begin hacking away at the table legs. And no, I am not calling for cash handouts – but instead for greater investment in our youth, social and employment programs / institutions.)

    • Double Entry says:

      Even Whodatis is not this stupid.  I can only assume he is bluffing to persuade people he does not work in the finance industry. 

  5. Whodatis says:

    I find all of this very interesting.

    For example:

    • "… she has nevertheless requested a month’s extension on the government’s overdraft and has had a verbal permission from the UK for this."
    • "While she said she did not expect that talks with the UK and the overseas minister would always go so smoothly … "

    Really?

    The former Premier (McKeeva) surely did not have such an experience with the UK. In fact, last I checked the UK was not budging an inch in regards to the overdraft and financial matters as we were facing such a dire situation.

    What has changed between now and then, I wonder?

    Is our long-term financial outlook suddenly improved and someone forgot to send us the memo?

    Therefore, can we correctly deduce that the hurdle and source for the recent turbulent relationship between CIG and the UK (which ultimately impacts every Caymanian and resident) was the UK's dislike of a lone individual?

    Were they prepared to allow this island-nation, for which they do next to nothing and could only dream of having its superior economic standing, to fall apart and suffer all because of one man?

    Ah boy, the more things (and times) change – the more they stay the same.

    It is constitutionally recorded that the UK's interest and concern in regards to the Cayman Islands is that of (their) self-preservation. This is not something to be taken lightly.

    It is vital for all of our elected officials to clearly understand that point – most crucially at the moments of receiving UK "favours".

    Translation: If the UK loves our Caymanian Premier – then logic suggests that we ought to keep a close eye on said Caymanian Premier. (That is not necessarily directed at the current Premier – but it probably wouldn't hurt for her to take note.)

    • Truthseeker says:

      The last Premier ranted about how the Governor was his enemy. He made mad speeches about "donkey-faced" people and did whatever he fancied when it came to spending money (or borrowing, or awarding contracts, or making handouts, aka – Nation Building, or giving special benefits to certain people). He was a complete loose cannon, and the rest of his cabinet did nothing to restrain him.  And he seemed to have complete control of the purse strings.

      Your attempts to discredit the UK Government because they now respond to diplomacy and level discussion, versus threats and hot air seem to me somewhat biased. Surely it was up to the Caymanian people to remove this man from office if he did not represent their wishes?

      Truthseeker

      • Whodatis says:

        At the end of the day, money talks and policies are policies.

        One's attitude is actually irrelevant at these times. Clearly, a pleasant demeaner may help get things done, however, to penalize an entire country as a result of one individual is beyond despicable.

        Also, kindly understand that Julianna and Mac were essentially requesting the same things. She got it – he was blatantly refused.

        Why is this? What is the difference? Because one Premier is more liked than the other? Is the British government really that petty and brattish?

        It is evident that had Mac been in power today, Cayman would not have received the overdraft buffer.

        We don't know which was the chicken or the egg in that situation (UK vs. Mac), however, what we do know is that the UK's handling of the situation was not very diplomatic and respectable in the least.

        If the reality was one that the UK / FCO / Governor had no intention to grant it as long as Mac was the Premier, then was he not justified in regarded them as his "enemies"?

  6. Stiritup says:

    Maybe the expats should pay a 5% income tax.

  7. Anonymous says:

    Better give back our 3.2% or you’ll be rollover like keke come May!

    Caymanian

    • Anonymous says:

      OK. We will give you back your 3.2%.

       

      And, in order to pay for it, we will raise the import duty on all the goods that come into the country.

       

      Now, are you futher ahead financially?

       

      Hmmmm, maybe a "Community Enhancement Fee" charged on all expat incomes would be a better idea. Yes, it is a much better idea than an expat income tax.

  8. Anonymous says:

    Unna mess with Julie…Woman a go run this coutnry!!

     

  9. Anonymous says:

    Great! We are in a deep financial hole and the UK gives us another shovel to help us dig deeper.

     

    Sheesh!

    • Anonymous says:

      Hey Juju when ya gonna bring the bill to do away with pension for expats??? Why should the people of cayman keep paying expats pension when the money is being taken of Cayman and is DESTROYING small businesses whocan't keep paying this??????

  10. Anonymous says:

    Would be great to get some true, properly audited financial statements so we can really see where the hell we are currently and know how bad or good it is. Transparency is a great word if it works, a useless word if there is none.

  11. Anonymous says:

    Finially, a picture of Juliana O'Connor-Conolly without her glasses perched on top of her head. 

  12. St Peter says:

    Now thats a nicer photo of our Premier – Ms Julie.

  13. Anonymous says:

    WHICH “New legislation increasing fees in the offshore sector”??

    They cannot seriously expect to increase private sector fees again?!!

    We cannot take any more! People are struggling to cover the basic necessities and regular living expenses. But UDP does not understand that reality, because they pulling in $8,000.00 – $11,000.00 per month, PLUS expenses ( car and driver, meals, airfare) from the public purse.

    Now they adding 3 additional MLA costs and want to TAX their way out of their spending problem.

    They need to cut expenditures, and take a pay cut!

    Have mercy!

    • Anonymous says:

      So you didn't know about all the CIMA fees that were hiked up yet again at the last minute and without much warning over the Christmas period?  Yup they're biting the hand that feeds them again.  In fact they aint just biting it, they're devouring it.  The financial sector is propping up the economy and the increased annual fees, registration fees and the new sundry fees are now at the point of driving all our investors elsewhere.  My clients are in a frenzy and several of them who were about to register Funds here have already decided to go elsewhere since receiving news of the latest batch of fee hikes.  Other clients who have put up with several fee increases during the last two years are now either closing their company's down or moving elsehwere too.  This is not good for business, and whilst it may help the public purse now, itwill not help sustain the economy in the long term future when many of our investors have gone elsewhere.

      • Anonymous says:

        I am a professionally qualified person and I have been laid off because of the fee hikes and the effect on local business. All my clients were deeply unhappy and have been closing down their Cayman structures. During a conference late last year, I overheard two professionals discussing which jurisdiction was best to set up a certain type of structure. The first thoughts they had was Cayman was too expensive, and dismissed Cayman outright. This type of discussion is happening all over the globe in respect to Cayman. Cayman is being dismissed due to its costs when considering new structures, and existing structures are being closed down at an alarming rate. These latest fee hikes are simply accelerating the decline.

  14. Pit Bull says:

    How ridiculous. Did the government offer up any spending cuts in return?