Government aims for 4% cut in spending

| 28/11/2013

(CNS): Although government is hoping that its earnings will increase during this financial year compared to last in order to meet its predicted surplus, it will also be keeping a tight rein on public expenditure in both core government and its statutory authorities and government companies (SAGCs). Finance Minister Marco Archer has said that over the current and the next financial years government proposes to cut public spending by $22.5 million, or 4%, with a subsequent cap on increases at 1%. The initial reduction in expenses over the next two years is expected to result in early savings in tandem with improved revenue collection. As core government tightens the purse strings, the minister indicated that the SAGCs must play their part in both cuts and earnings.

With prudent financial management (the minister's theme for the public purse when delivering the Strategic Policy Statement earlier this month in the Legislative Assembly), Archer said the government’s “ fundamental responsibility” was to ensure that “every dollar is well-spent”, as he pointed to streamlined resources. “We are adamant that by replacing waste and abuse in government with transparency and accountability and efficiency, our country will realize great savings in the medium and long term,” the minister said.

Aside from plans to continue cutting personnel costs, Archer indicated that the PPM administration would be placing a higher degree of reliance on savings from supplies and consumables, purchase of outputs from non-government suppliers and the purchase of outputs from statutory authorities and government owned companies.

He said that government was seeking to restructure the financial affairs of SAGCs "by mandating that comprehensive reviews of their operations be undertaken with credible and sustainable changes implemented thereafter. The goal is to improve the financial performance of the SAGC’s and make them less reliant on funding and subsidies from central government.”

Archer has not yet said which authorities or companies will face the most cuts but with the Cayman Turtle Farm sucking in $10 million in government subsidy and Cayman Airways still needing around $5 million each year from the central government, those two companies are likely to provide the starting point for government pressure.

Archers also announced during the presentation in the LA that legislation to effect “greater clarity and uniformity in the governance arrangements to be exercised by government with respect to Statutory Authorities and Government Companies is being drafted.” This was expected to be brought to the LA before the fiscal year-end, he said.

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Category: Politics

Comments (45)

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  1. Anonymous says:

    Thank you Minister Archer for your hard work and honesty for the betterment of these beloved islands and our people. Unlike others those who sneakily work with foreign entities to devise ways to compete with Caymanian businesses for kick-backs, you are honestly working for the good of our country and all the people, not to line your own pocket at the detriment of others. May God continue to bless you Minister Archer.

  2. Anonymous says:

    I wish you well Minister Archer. Others in the government could follow your example of honest and forthright leadership.

  3. Anonymous says:

    Well how is it then that one statutory head just bought himself a shiny new 4×4 truck with public money?  There is no justification for this except the prevailing sense of entitlement that so many of these heads have.  Its just disgusting when the rest of us take paycuts to save money and these irresponsible heads waste this kind if money.

  4. Anonymous says:

    Redundancy plans should be drawn up based on the Body Mass Index.  This would have long term savings in reduced health care costs and lower absenteeism rates.

  5. Kato says:

    Minister archer you indicate aside from cutting personnel costs does this mean more redundancies? If so, how does this helps the economy? Let me break it down for you, you make me redundant, I can't get a job, the bank takes my house, my family is on the street and now having to rely on social services. I'm a family of five, so how is government going to support every family that this happens to? Are you going to increase the taxes again? 

    Mr. Archer I'm a blue collar worker and I can tell you  I have no degree behind my name but common sense prevails. If you cut ministers salaries by say 20%, stop double dipping,  cut housing allowances with the exception of police officers, leave our pensions alone, fill the white elephant with external tenants or sell the building and lease it back, pay your pension premiums and let every PR pay up the back fees or start confiscating.

    lastly, roll back the increase taxes you party promised. If we have more discretionary income, then we would spend more and this would keep the cash flow in the positive. 

    I shake my head with dismay every time I hear you give people like dart concessions but tax the crap out of your people. Do you think the money spent at Camana bay is being injected back in this country or is it going back out for more island/country purchases? 

    we have more people in government with all sorts of degrees yet we are worst off today!  Just use some common sense , honesty and keep the playing field fair (why should dart get to build for far less than any hard working caymanian) are what is needed to keep the country like a well oiled machine. 

    • Anonymous says:

      Someone with this sort of attitude should be put at the front of the redundancy line. 

    • Anonymous says:

      I agree. Why are we paying housing allowances? Do not tell me there's not a lineup of either qualify for Mannions to take these jobs but you cannot find somebody from overseas who wants to live here tax-free and a nice weather climate.  There are plenty of places to trim the fat. Housing allowance was, review all expat government contracts that are not subject to Caymanian applications? (That is crazy- make a simple goal to cut overseas contracts by 10% this has nothing xenophobic attached- just math for the cost of importing talent. Yes, I doubt if we will find a helicopter pilot locally but there are jobs that locals can be trained for)

      start policing gas boy, use of government vehicles for personal use, and although people will balk it is time for the government to make people pay part of their own health insurance!  Gee, this may spur some into the private sector- good! That helps with the work permit glut too.

      it is simple- trim the fat and get more locals back to work and our social and unemployment problems will be addressed too

  6. Anonymously says:

    Let inmate families pay for their clothes and food while in prison, take this strain off government. To qualify for social service vouchers they must be indigent and aged and not people that acquired status by the mass status grants of 2003 and their dependants who have now become burdens to government.

  7. Chris says:

     

    Good work Marco!

    I dont see how anyone can be against the government working to improve its efficiency, increase transparency and cut costs.

    A 4% goal is modest, but realistic.

    If the other 17 MLA's work as hard as you do and are as honest as you are over the next 4 years, Cayman will be in a MUCH better place than where it is today.

    • Anonymous says:

      Aim for 4% and he might get half that if he's lucky.

      He should have set the target at 10% if he wanted to achieve 4%.

  8. Anonymous says:

    4%? I would have liked to have seen 40%.  All you'd have to do is introduce accountability and stop the waste, looting and the freebies to CS and their families. Just closing the NBF and taking away Mac's credit card should create $20m in savings. Take away the free flights for CAL employees' families and you could slash the annual CAL subsidy. Take away the Gasboy cards, get CINICO under control, fill the government building up, stop the overseas junkets, stop the dodgy duty waivers, close the turtle farm (and shoot the managers), stop the MLAs double-dipping on their pension and salaries and we're probably at $100m without causing any harm to the country at all.

    • Anonymous says:

      cayman airways hemorrhages money. Look closely at that Marco. look in yourself, not a report from management. Our pride and ourfears of another Ivan blind us to the waste and irresponsibility that burns $20m per year. $10 million max!  

       

      20m for what? to prop up incompetent management and get unreliable service on breaking down old planes and a botched up frequent flyer programme. A 10% reduction in the operating subsidy  plus  5% increase in PAYING passengers  would be millions of dollars in savings to CIG.  On wait, that would require accountability, not gonna happen  …. Too many free tickets and too many voters in CAL. 

      • Anonymous says:

        and the worst thing is…. the gov won't let anybody undercut CAL……so everybody  flying out of cayman is punished for the waste and incompetency of CAL…….

        just another day in wonderland………

        • Anonymous says:

          It is a popular myth that if it were not for Cayman Airways airfares to Miami would be lower. Ask the Turks & Caicos how it worked out for them having American Airlines service the Providenciales – Miami route rather than Cayman Airways.  

    • Anonymous says:

      I wish you were in charge of government spending – no seriously I DO!

  9. Anonymously says:

    It is not a expenditure problem it 's a money velocity problem if there is no turn over of money in the country then that is the problem.  Far too much money leaving the island to build up other countries.  If locals don't have jobs and the expats have the jobs and can live 20 to an apartment/house just spend money on the basic essentials and remit the rest home, what do you think is going to happen? I'll tell you poverty which will lead to crime as over the last 35-40 years Caymanians have always had it good whereby all who wanted a job could get one no so now.

    • anonymous says:

      Bullsh.. sort your own house out first. Money is sucked up in massive pensions being drawn before they have even retired. Stop paying government workers to fund second jobs, clinical abuse, fuel abuse, etc.

      Economy comes with efficiency. Get rid of the dead wood, friends, family and bring in those that will work and produce the goods.

      Get people in we need, not feed!

      • Anonymous says:

        Ah, you have the answer .. bring in a few more foreigners who in turn will form their own deadwood groups …. The private sector is rife with them. You need to devise another plan mate!

  10. Anonymous says:

    Minister Archer cut the $20m subsidy to CAL. Time to hold the Board and Management accountable by demanding value for money from the high earners. After 40 years management must make ever effort to turn a profit instead of viewing the subsidy as part of its operating budget. Their complacency is costing the country too much.

    Stop the silly projects and routes like jet service from the Brac to Florida, those flights are not even 50% full. Cut the fat and trim the egos. Time for less talk and more action

    • Anonymous says:

      Cutting the fat would be easy if cutting the egos was easy.

    • Anonymous says:

      I agree to cut the foolish Cayman Brac Florida routes. This is pandering to the whining Cayman Brackers who believe that everything must be hnded to them. Its about time that someone stands up and says NO!!!

  11. Anonymous says:

    Cue another pathetic plea for "their" 3.2% no doubt.

  12. Anonymous says:

    Archer is serious, I would expect he will be offering a 70% cut of his own salary to lead the way for the love of his country. Leadership at its best. 

    • Anonymous says:

      Don't be ridiculous. Even Ministers have bills to pay. Think how it would affect your finances if you lost 70% of your salary.  

      • Anonymous says:

        A 70%  cut of his salary means he can still retain 30%. And that is still 20% more than half of the government workers make.  

         

        To be fair to those half, it should probably be more than 70%, but if he is a true Caymanian, then for the love of country, we will all expect him to offer more than 70% on his own volition.

         

        That is the christian way to do it. Buck up, your reward will be in Heaven.  I'll vouch for ya in my prayers. 

        • Anonymous says:

          Unfortunately, bills are earthly and heavenly rewards won't cut it. No sane person would run for office if the salary they would be reduced to would place them in financial difficulty.    

        • Anonymous says:

          Why are you comparing the salaries of professionally qualified Ministers with the salaries of the bottom half of the civil service?

      • Anonymous says:

        A 20% cut would work.

        • Anonymous says:

          OK. So you are willing to pay 20% income tax then? Or does it only work for other people's income?

          • Anonymous says:

            No, it works for public servants because they are publicly funded.  You don't seem to get that bit.

            • Anonymous says:

              i.e. it only works for other people, but you are not willing to cut your salary to deal with govt's fiscal issues. It is easy to be generpous wth other people's money.  

  13. Anonymous says:

    Hahaha…you wouldnt see much savings in that case as you suppose salary for middle managers are in that range…try 55~75k seniot managers 77~105 and top at 120k or there abouts….rest are judges and ceos for SAGc and good luck cutting into their iron clad contracts

    • Anonymous says:

      Start with the glut of expats in Civil Service! CIAA, ICTA, Computer Services, HSA, General Registry, CIMA, ALL passed over qualified Caymanians in the past 90 days to HIRE an expat!!??

      that means airfare, housing, health, relocation fees, and once again degreed & qualified locals are still unemployed??  WTF Mr Archer… Clean your house!

      • Anonymous says:

        Caymanians always want expats to go home. Oh, except the ones they'd like to work for them. 

  14. Savannah Resident says:

    How about passing on some of the savings to the citizens, residents and visitors of this Country?  The current cost of living is unsustainable for most and needs to be addressed.  It’s all good to say we're saving money as a Country, however, we have families (little children in particular) defaulting on loans and going to bed hungry every night.  

    Not to address this issue from only one perspective, consumers in Cayman have to learn to live within their means.  This is very evident as person's possess the newest smart phones and/or nice cars yet can't feed their children and complain about the lack of social services.  In addition, we as a country for far to long have continued to allow our citizens to heavily rely upon Government for subsidies, payouts and child rearing.   The problem begins at home people.  

    How about dropping the fuel duty slightly?  

  15. Anonymous says:

    good…. now lets tackle the cost of living/doing business…….. unless this is done, cayman will continue to sink….

    • Anonymous says:

      Absolutely right! Fees and cost if doing business is destroying small and medium size business in Cayman and running the large business off the island. This is no joke!

    • Anonymously says:

      Very good idea, government should also collect all of the outstanding fees from people with PR in full before the end of the year or revoke their PR and put liens on properties or confescate any assets that they have to pay the fee, take their vehicles and money in the bank.  

  16. Anonymous says:

    Personnel costs are the biggest expendature.

    Start cutting immediately from the top down:

    MLAs – Cut their bloated salaries by 40%.

    Top managers making $150,000+ – Cut by 20%

    Middle managers making $80,000 to 149,999 – Cut by 10%

    Personnel making $50,000 to 79,999 – Cut by 5%

    Leave the little people below $50,000 alone.

    The civil service has been over paid for years and years. In this area, both political parties are guilty of vote buying, pure and simple.

    • Anonymous says:

      How much are you goingto cut yours?

    • Anonymous says:

      Take away phones and BB where not absolutely necessary for someone to do their jobs

      All gov vehicles should be parked at work for the night, not be taking home to run personal errands or to pick up children from school

      Tight monitoring of the gas boy

      Make parents pay to have children bussed to school

      Implement annual school book fee again

      Make CS pay a portion of the health insurance cost for their dependants

       

    • Hear Hear says:

      Personnel costs….stop rubber stamping expats and hire locals.  Save a WP and save a family!!

      The ONLY people who spread the myths that we cannot do the jobs are the white collar employers hiring from overseas!  (and the horrid crooked recruiters who love to get their overseas fees and know once a local takes a job it is off the table…)