Public spending goes up

| 20/06/2011

(CNS): Even though government expects to collect more revenue during the forthcoming financial year, spending on staff, services and subsidies continue to climb. According to the budget documents, which are now available for public scrutiny on the budget management unit website, the entire government spending for 2011/12, including personnel, operating expenses, debt servicing and the subsidies to statutory authorities, exceeds last year by over $10 million. This contradicts the three year plan that the government had agreed with the UK, which had sought around a 6% reduction in government expenses by this year.

Although government has brought in its core government operating expenses a fraction under last year's figure, when the debt service costs which have increased are added as well as losses on currency transactions and the deficit from government companies and statutory authorities, the public purse is consuming nearly all of the revenue government expects to collect, leaving it with a $3.6 million surplus.

In the three year plan submitted to the UK, core government was predicted to spend $479 million but its costs are in fact in excess of $10 million more.

One of government’s highest bills is personnel costs for the civil service, which despite pressure from the UK continue to climb. This year government will spend over $228 million on staff compared to the $216 million it expects to have spent by the end of this last financial year 2010/11, which finishes on 30 June. In the three year plan government had committed to cutting the wage and benefits bill to $212 million

Government will also be spending a significant amount subsidizing government companies, in particular the Turtle Farm and Cayman Airways, which are receiving equity injections of $9.5 million and $5.1 million respectively, representing around 20% of the total government cash injections of over $55 milllion.

The Turtle Farm subsidy is only a fraction less than the $9.6 million pumped into the loss-making facility during the 2010/11 fiscal year. Cayman Airways will receive the same amount paid as this year to continue repayment of the shareholder deficiency. The airline will also receive $2.5 million to operate the Sister Islands service and $12.5 million to continue the airlift to strategic gateways to support the tourism product.

The education department will receive the biggest cash injection at $28.9 million to cover construction at the high schools, the primary schools, the development of the Sunrise Adult training centre and other capital works, which is fractionally less than the money that was allocated up until 30 June. The education department will also be receiving one of the biggest transfer payments to cover the cost of scholarships. The $7.5 million is a half million less than last year.

Government will also be spending $5.9 million on assisting 950 vulnerable people with poor relief, slightly less than the $6.7 million spent on 1,015 people this year. Government is hoping to cut the spending on poor relief vouchers from almost $2 million spent in 2010/11 to just over $1 million this year by reducing the number of people assisted from over 1,100 to less than 850.

The new fund created by the premier under his ministry for the 'promotion of nation building and church-based support' will also receive over $3 million. The exact nature of this spending has not been made clear but is described as support for schools, sporting, cultural or voluntary organizations and for church-based after-school programmes as well as a grant to the Pines retirement home. During the 2010/2011 year the budget documents reveal that $4,300,000 was spent under this allocation.

See all budget documents here – note all four documents for 2011/12 can be found on the list on the right had side at the bottom.

See three year plan below.

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  1. Concerned Caymanian says:

    I don't see how this headline is news. Government spending has gone up repeatedly year after year for at least 2 decades.

  2. Anonymous says:

    I lubs dis mess

  3. Anonymous says:

    Cayman Government has evolved into a very large gravy train.  It used to be small enough to feed and take care of the island but now……well look for yourself.  You have to buy a ticket but you aren't allowed to board.

  4. nauticalone says:

    What a mess!….Almost $10 million on the Turtle Farm each year?        And still no audited accounts for some 7 years?

    WTF !!!

  5. R. U. Kiddin says:

    I must not understand all there is to know about budgeting.  I try to live and get by without spending more than I have coming in….. which ain't much.  This article tells about our government spending millions of dollars like it was nothing.  Man, you spend a million here and a million there and pretty soon you're talking about big money!  I don't think it's very smart to "inject" money into businesses like turtle farms and airlines, either.  If a business can't stand on it's own two feet, let it go bust!  There are others who will take their place and make money by operating efficiently.  Other airlines would be happy to serve the Cayman Islands without any subsidy.  By the way…… what is the payment labled "shareholder deficiency"?  I haven't heard that one before.  Is this extra money for the Cayman Airways shareholders?  Maybe it's something paid to deficient shareholders……

    This year our government is going to spend $228,000,000 on "staff".  How many peopleare "staff"? What is the average paid to each "staff" person?  Many times more than I make, I betcha. 

    I also wonder about the number of "assisted people" the government is cutting off.  Did these folks get better off and no longer need assistance?  If they don't need the assistance, why were they getting it?  But…… I'd rather see the poor get a handout than an airline company or poorly-run business.   

  6. Anonymous says:

    Between them all, the UDP had all angles covered – a lawyer or two, a CPA, an Engineer and Granny Wits.  But when it was all mixed together, we got a result of what I wouldn't dare to say….

    I have never seen a bigger MESS!

  7. Anonymous says:

    Everone knows that if your budget dont balance you go bust and thats what will happen to Cayman. Then the Uk will have to step in.


    Party politics has failed Cayman. We need less government not more!!!

  8. Anonymous says:

    Erm – $4.4million in the last budget year for "promotion of nation building and church-based support" and another $3million in this budget? Am I the only one wondering WTF this $ was really spent on? And is there any way that we will ever find out????

  9. Ubelievedat says:

    Many CPA qualified persons are UDP members and supporters, throughout these 3 Islands.

    I find it impossible to believe that these people cannot come together as a group to advise the Premier that he should not attempt or pretend to meddle in such matters and procedures such as FINANCIALS / FINANCE / ECOMONICS.

    CPA's pleeeeeeease, I beg you, I emplore you, get together – talk some sense into this man before the UK become exceedingly frustrated with the incompetent management of our financial affairs.

    We dont have to wonder what will happen if the UK takes over. Turks & Caicos is the proof in the pudding!!


  10. Anonymous says:


    Was formal approval from the UK on the 2011/2012 budget actually received?????

    I hear debate on the budget but I cannot find confirmation that approval was actually received???



    • anonymously says:

      it was direct tax, but he refused, I guess that's why london's desk clerk didn't even want to answer the telephone when they saw it was him

  11. Anonymous says:

    For all those people calling for direct rule from the UK just be careful what you ask for.  Take a visit to Turks and Caicos Islands and see the result for direct rule.  It is much better for the government to reduce spending and comply with the UK government rather than having direct rule forced upon us.

    Some politician don't want to be told what to do by the UK and is willing to tell the people anything and even encourage independence so that they can stay in power and this is wrong.

    To keep the good ship Cayman Islands afloat please Caymanians let those of us who have a job in the public sector try to  conserve and eliminate waste perform two jobs for the price of one if you can just to save our country thing about the sacrifices that our forefather paid to give us such a good life since the 1960 until 2004.


    • Anonymous says:

      Like thats ever going to happen.  Instead of cutting back and actually showing up to do the job Civil service is still growing and still a poor performer.  But it still controls Cayman leadership till the bitter end.  What is happening right now in T&C is just the start of cleaning house so T&C has a fighting chance atcontrolling its own destiny.  Like T&C Cayman lacks the discipline to do the right thing because it is harder than doing nothing.  What T&C has right now is better for the country than what it had.

    • Anonymous says:

      LOL! It is hard enough to get some people to perform one job let alone two!

      Let me know how you get on with that suggestion!

  12. Thankful Again says:

    What do you expect though?  The government has had to comply with the implementing of the new consititution which called for many new bodies and ofices to be created: Human Rights Commission, Complaints Secretariat..etc etc

    • Anonymous says:

      Don't make excuses. The Govt. was fully aware of all of this when it made its commitment.

      • Thankful Again says:

        believe me..I am the last one to make excuse for this government.  Just being real.

  13. Anonymous says:

    yippee…. we are a step closer to direct rule!

  14. Libertarian says:

    UDP is in a sticky situation.

    If they start cutting government jobs that would entail unemployment to an outsource private sector, and crime may increase due to the unemployment. The nation needs government workers in essential departments like police, hospital, schools, and the courts. People need to understand that whilst we need to reduce the size of the Civil Service or maintain its same size, we have to do so carefully – it is serious business. The non-essential services can be privatize like the public works, but how in the world, can you privatize essential services like the police and prison. You can't just sell off all the government assets as well. The UDP also understand that most of their loyal voters are within the Civil Service. So the last thing government wants to do is financially cut off its own arms and limbs – that could cost them 2012 election.

    On the other hand, if government increase its size and public spending, it is would not be a good thing for the private sector and this Offshore Financial Centre. We are ranked 5th OFC in the world now, but when you have a restrictive andanti-business government, it will effect offshore performance. The private sector is the heart of our economy. When you have a bloated public sector like a very obese man, he needs lots of food and nourishment to maintain his body weight. That means more spending and that means more indirect taxes and increased in fees upon the private sector is needed to maintain that man. That is commonsense analogy. What ends up happening upon the private sector, is a monopolistic government (in this instance, sided with certain private elites like Dart), will emerge and all small eutrepreneurs / companies will suffer from the increased cost of living.

    The balancing act – it is like the big man walking on a tight rope.

    I recommend that the government engage in more "public-private partnerships" without the favors, concessions, and waiving duties and fees on special entities. I recommend for government to remain neutral, consider all private entities on an equal plane, and not show any favoritism to one single entity, so to avoid unfair competition in the free market.  I recommend government seriously consider reducing fees, duties, permit fees, and trade/business licenses fees so more monies will be in the economy and private hands to invest. And yes… I have always recommended the Roll policy replaced for more opportunites, local business creation, and educational opportunities. These things will stimulate the economy, will raise the population in a healthy way where monies will be in more circulation. These things will create more jobs.

    In the end, the increased in government expenditures need to stop and the free market, the private sector and wealthy elite individuals as well as the little man who has his small business, need to be left alone in order to grow and create more wealth on the island.

    The UK can never help us, because their policies appear to be hostile to this financial industry in that they alread wanted us to implement a direct taxation system for the Cayman Islands in order to maintain govenrment expenditures. The UK is no savior, but their Queen on our dollar bill. The U.S. Miller Report gives us a more accurate and feasible path to pursue.

  15. Real World says:

    One can only conclude that the UDP — i.e., the Premier — is deliberately spitting on the Miller Report and treating the UK with contempt for political purposes.

    • anonymous says:

      be careful.  whilst the premier may spit on the uk, the uk may spit on us!

  16. Married to a Caymanian says:

    Gee you mean large entourages of politicians and cronies attending far flug cell phone trade shows and meaningless conferences was going to be free?  Security staff, drivers, cars, entertainment, splurge, slurge, splurge!!!

    No one in goverment has tried to cut back.  Everyone thinks the other guy will do it.

    UDP or PPM, both parties have let power go to their heads.  You are civil servants that are supposed to SERVE the people, not yourselves.

    I'd welcome direct rule and a few accountants to tidy the budget.  There must be some kind of software for county management…we are such a small popluation, but yet so out of control!

  17. Akow N. Ting says:

    "In the three year plan submitted to the UK core government was predicted to spend 479,265 but its costs are in fact in excess of $10 million more."

    XXXX (typo corrected)

    That said, let's just step back and look at that… half a billion dollars to service a set of Islands with let's say about 25,000 citizens and 20,000 guest workers.  Raised from those same 45,000 people, and the tourists and domiciled hedge funds.  Mac's pissing away half a billion dollars a year administering what is, in global terms, a medium sized town.  That's just incredible.

  18. Anonymous says:

    $228 million just on staffing costs for islands with a population of under 60,000?

    Youdon't need a degree in economics to figure out that's a hell of a way to run the proverbial railroad!!!

    • noname says:

      It more than likely cost about $100 million.  Anyone else wonder where the other over $100 million went?

      Terrorist, Mafia, unscrupulous companys and individuals used to send it to Cayman.  Maybe they still do.

    • Anonymous says:

      This really is crazy?? Those personnel costs would be expected for a population center above 1 million people – not for 50,000. I will ask again why do we have some many civil servants, what can they all possibly be doing? Are they held accountable? I think we all know the answer to that.