Friday is budget day

| 02/10/2009

(CNS): In the absence of any last minute hitches, the UDP government will finally deliver the country’s 2009/10 budget on Friday morning. Following the green-light from the Foreign and Commonwealth Office for the administration to borrow $229 million, $50 million of which government can take immediately, this year’s public spending and earning plans will be revealed.  On Tuesday evening Leader of Government Business McKeeva Bush said that he will be able to bring a budget that not only offers a small surplus but will bring government’s cash reserves back to 90 days.

Despite the financial challenges faced by government, Bush said that solutions have now been found without the need for direct taxation. However, the Caymanian public can expect to see public sector cuts and increases in duty and existing fees.

 “To get to the point of where we could present a Budget, we have had to cooperate with the UK FCO,” Bush told the audience at the Mary Miller Hall on Tuesday.

 He explained that further cuts in public sector expenditure would be forthcoming, including a continued restriction on hiring, a reduction in furniture and equipment purchases, overtime cuts, reductions in accommodation costs, and the elimination of allbut essential official travel.

Nor will the budget be painless for business or the man in the street as the FCO has been insistent in wanting to see additional revenue streams as a condition of the borrowing approval. The leader of government business said that Cayman will eventually need to find a more sustainable revenue base but in the interim consultation with the industry stakeholders across the board has led to a series of revenue sources that will be brought forward in the budget. 

The bulk of revenue will come from increases in already existing fees and charges imposed on transactions of some $100 million, including duty increases as well as transaction fees. Bush said that the increases would not be detrimental to the economy and were supported by leading members of the private sector – particularly those in the financial services sector.

Part of the government’s 2009/10 fiscal plan will be to raise revenue through the divestment of public assets.  “The objective of this consideration is to increase the cash resources that the government has available to it during the year,” Bush stated, but he added that every effort would be made to retain a portion of public assets for government. “Even if an outright sale occurs, every effort will be made to regain total or partial ownership when public finances improve,” he said.

Government will be also looking for pay back in its investment over the years in successful statutory authorities and those that have accumulated cash reserves which are not required as a priority for the current, and in some cases the next fiscal year, will be asked for a dividend.

The lynch pin in the budget, however, is Bush’s plan for inward investment, as he said the country must control its own economic destiny. “We must find a way to encourage new investment which enables firms to find the workers they need while affording the maximum opportunities for Caymanians,” he said. “We will not be able to do this without accommodating investors. We cannot expect to attract significant new investment by treating investors in the current way we are in terms of our policy environment. We must give something to get something.”

Bush said new investment creates job opportunities and new opportunities for Caymanians to own businesses. “Over protection, particularly in these dire economic times, will only stifle our economic recovery,” he added. “We must therefore prepare ourselves to be more accepting to non Caymanians. We must go back to the non divisive, harmonious environment we have had for decades while our nation became one of the most successful economic models in the world.”

As a result, Bush has outlined a number of major capital development projects which he intends to fund through public/private partnerships and private finance initiatives such as a new mega yacht marina, cruise berthing facilities, a sewage system, a cargo port in East End and five star resort developments.

“These types of major capital project will create an economic stimulus immediately – creating jobs, work for existing transportation and heavy equipment operators and other businesses,” he said. “Doing nothing to stimulate your economy when facing a recession is NOT an option. And I will not sit back and watch the lives of hard working Caymanians get worse and worse as each day goes by.”

The budget presentation begins in the Legislative Assembly on Friday morning at 10:00am.

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Comments (26)

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  1. Joe Average says:

    My Budget.

    Groceries, $10 Top-Up, Oh yeah… dish detergent, Toothpaste,  New battery, gas for next week, Some of that fix-a flat stuff, should get some new socks but they can wait……..$20.36!!   I have a surplus!!!!!   That was easy.

     

  2. Anonymous says:

    I have to say that I listened to the entire speech that Mac read out and I am very disappointed. I understood everything that Ken Jefferson said, but what Mac read out, which somebody else had obviously written for him, was completely disjointed, incomprehensible, lacking in substance as far as I could tell.

    • Anonymous says:

      I would definately have to agree with you, not sure who the speech writer was, but it lacked flow, relevance, comprehension anda whole bunch of other things.

      At one point it sounded like he was trying to give the throne speech.

      I think he lost the Audience 10 minutes into it, even the speaker was flipping through the pages trying to see where the end was.

  3. Anon says:

    After Mac’s speech today I am absolutely convinced that he can ruin us all. How can the leader of a country babble on like him and make up words without everyone realising XXXXXXX?

    We are up sh1t creek without a paddle and the boat is leaking……

  4. Cicero says:

    Mac’s budget speech – all puff no substance.

  5. Anonymous says:

    It is a shame to read the comments made in this forum. Instead of finding fault and making unreasonable comments about McKeeva, why don’t you get out there with some "better" ideas on how to get us out of this mess! It is easy to find fault, anyone can do that but it’s a different story to find someone who has sensible ideas and solutions. I wonder what would have been said if Mac had gone along with the suggestion of income and property tax, as suggested by the UK in order for them to approve the borrowing?

    This is one of the reasons that Caymanians are no better off today, always putting one another down!! Every other nationality on this Island can work and live together in harmony, helping one another in any way they can; Caymanians can’t do that as they are too selfish!!!

    • Anonymous says:

      Boy you just did a good job of putting down Caymanians! Personally I don’t think any of the comments made here about McKeeva are unreasonable but then again that is just my opinion; nothing to do with me being Caymanian or McKeeva being Caymanian….just simply my opinion based on my observations of the policies, ideas and general actions of McKeeva and the UDP.

  6. Anonymous says:

    The owner of a superyacht does not instruct his Capt to chart a course towards a far away island just because it has recently dredged a channel.  The destination has to offer cachet and attractions, or at least other infrastructure to accomodate their needs; and I’m not talking about the Turtle Farm.  A few may come once out of curiosity, but there needs to be a plan to bring them back.  I say, build the attraction, and then dredge,not the other way around. 

  7. Stimulus of the Cayman Economy is a garbage says:

    Mr. Bush’s plan to stimulate this economy is a unfounded in logic.  Contrary to Stimulus in USA, Canada and Europe Cayman produces less than 5% of consumable goods used on this island.  Therefore, any money that is pumped in must go right back out…The way I see it is that you Are only stimulating yourself with all this foolish talk.  Why don’t you encourage savings and investments of this stimulus encouraging Caymanians to invest in the region and the world to reap true benefits of both aspects of our trade.  Our GDP is sinking fast and Americans will no longer be able to support Cayman so we are destined to be a lesser country in a few years time.  We should encourage self substaining practices.  Please let these leaders support our agriculture sector..Please let them build a milk factory…Can we encourage fishing and work on becoming a nation of ship owners again…The Financial Centre model is dead for now we need real tangible industries…We need to be self sufficient not overly dependant to succeed.  My recommendation would call for allowing the bauxite and plants to be shipped in from Jamaica and distrubing it free to farmers.  All this over regulation is stifling growth in our agriculutral sector…The port seems like the only idea that is good but I must admit that I don’t know much about it to comment on the location only that they probablr want to build on Joe Impartio’s land shame on you Mr. Bush if you do…don’t you have enough money already think about your country first!   We know you and you can’t fool all the people all the time

  8. Backstroke says:

    Today wversee all need to pray for the future of these Islands, pray for the elected members and the government to lead this country in the right way. Mr Bush as a professed christian please read James 4 -17 To him that knoweth to do good and doeth it not, to him it is a sin. let your consciences guide you.

  9. Geordie Sam says:

    Double Bubble!

    OK Mac has saved us all from Income Tax – huarray! . Now, reading between the lines, it spells far too much opportunity for more official corruption down the line. 

    Double the opportnuity for XXXXXX as he spells out that (a) he wants to sell public assets and (b) he’s likely to be offering to buy them back again later with Public Money. Sell low and buy High will be the name of the game – just wait and see………………..!

     

  10. Anonymous says:

    "…and the elimination of all but non essential travel"

    Hopefully Mr Bush will stop the practice of allowing civil servants on CAL’s Board the perk of free travel for them and their family. It is not only expensive, it is totally improper for them to receive such a benefit.

  11. Profit of Doom says:

    I hope the tax on transaction fees does not rely on projections that they will stay the same or increase…

    Just ask the Bahamians how quickly the banks can move their business – and watch how quickly the Cayman business dries up.

    Trust me – the money is like water down a hill – it will follow the path of least resistance – or lowest cost…

    The start of the end is here.

  12. Anonymous says:

    What on earth is a country of 55,000 people (the majority not indigenous) doing with an airline of five 737 jets? And please don’t say we need them for when a hurricane threatens etc etc. We all love CAL-it’s a great airline in many ways. But it was created out of Jim Bodden’s vanity and we can no longer afford such a drain on our resources. Imagine the money that has been spent in subsidies over the last three decades. retire the pilots on generous terms and transfer the rest of the staff into the civil service, removing non Caymanians at present there.

    • Anonymous says:

      What a joker you are. You have no idea what you are talking about. CAL only has 4 jets to start with. If you are one of them that think CAL is the problem with high airfares just ask the people in Turks what happen when CAL pulled out a few years back. The airfares went up three time what they were compared to when CAL was there because AA had no comptition. Yes government helps CAL with a few million a year but CAL brings in over 180 million in return Check the fects before you start writting your stupid ideas. 

      • Anonymous says:

        No – airfares went up so much after Cayman Airways pulled out of Turks because Cayman Airways was charging too little and we subsidized the birth of their tourism industry (to compete with us) at our expense. Brilliant! 

        • Anonymous says:

          As I said before "You have no idea what you are talking about" CAL made money on that route but had to stop for other reason. Can you do me a fovor, "have a good weekend"

        • Anonymous says:

          The previous poster is correct. You have no idea what you’re talking about. I checked out the current AA round trip fares between Miami and Providenciales 10 Oct- 15th Oct . Economy fare with taxes it comes to the US$1,184.20. Yes, you read that right. Compare this to KX round trip fares of  US$296.35 between Miami and Grand Cayman on the same dates. And some idiots believe that KX pulling out and letting AA alone service the route will lower fares!  

      • Anonymous says:

        The joke’s on you, mush for brains. If CAL brings in $180 million every year, why the hell has government being throwing so much money at it for so long to keep it flying? The money should come out of the $180m.

        Duh!

        • Anonymous says:

          Another stupid a@@ dont know what you’re talking about. That was about 5 years that the study was done so now maybe its even more. Incase you didn’t get it thats the amount of money CAL puts in the country.

          DUH!!!

          DUH!!! 

  13. Joe Average says:

    A surplus???   "We’re taking the 50 mil and going to Monaco"

  14. Anonymouse says:

    Solution = UK takes over…

    … the management of the Cayman Islands, as it did in the Turks & Caicos, to prevent rampant corruption and…

    We end up having income and property TAXES imposed on us by force…

    Say goodbye to a successful Tax haven!…

    The dredging of North Sound to accommodate a marina for the wealthy elite is particularly obnoxious, as there will be little or no long term benefits to the Cayman population at large…

    As McKeeva said at the Ritz Carlton meeting: "thanks to the developer for providing the venue free of charge…"

    I guess the eventual bill is in the snail mail…

     

     

    • Joe Average says:

      Re:  Dredging North Sound.  If suppose you had a large resort hotel.  And if supposing clients had mentioned they would like to bring their mega yachts directly to the hotel marina.  But supposing the way there was too shallow.  And supposing to gain access a fragile area of water had to be dredged but you did not want to make the proposal yourself.  Because it would be bad publicity.

      Now…just supposing you had the ear of someone in government and you had had business dealings before that managed to be quite successful.

      If all of the above is true it would be best to propose to make it appear as if it were a government initiative.  Not to mention you save the cost for yourself and your friends with the mega yachts.

      Unless there is a toll included @ $100/ft. this project is certainly not a priority and shouldn’t even be considered.  Before more pressing issues are addressed.  Do we really need the dangers of a spill?  And people pumping out their bilges?

  15. Anonymous says:

    It is test time for the electorate and Cayman’s version of political mathematics is invaluable. Here is the test question for today;

    If 1 overriding of environmental concerns relating to the destruction of mangrove plus 4 million in duty concessions = 1 exclusive real estate contract, and

    1 change in the height limits for buildings on 7 Mile Beach = 2 condos,

    Solve the following:

    1 overriding of environmental concerns over dredging of the North Sound in order to provide thousands of tons of sands for cronies = ?

    Permission for a berthing facility for mega yachts with attached 5* resort = ?

    A cargo port in East End = ? 

    As a hint – solve the equation for 1 politician only. Keep in mind that the Elections Law is to be amended so that aspiring MLAs will have to follow the rules of the television programme – "So you want to be a millionaire". After the election, MLAs will be able to make up their own rules as they go along and will be able to receive extra "smoke and mirror" rewards by deceiving the electorate.

    Good Luck – we are all going to need it.

      

    • Anonymous says:

      You dont need to be a rocket scientist to tell where you coming from or where you are headed with this.

    • Anonymous says:

      Is the answer 7?

      No purple!

      I choose purple.