Year ends on $10m deficit
(CNS): The premier said the public finance year-end result for 2011/12 is a “remarkable testament to the government’s stewardship”, even though the year ended with a$10 million deficit, when the forecast figure had been for a small surplus. During a long and disjointed presentation on this financial year’s budget on Monday evening, McKeeva Bush claimed credit for reducing government’s operating deficit from $80 million when he took office in 2009 to $10m. The premier overlooked the three-year plan that was submitted to the UK in 2010, however, that had called for a more than $10 million surplus by the end of this financial year.
Bush stated in his budget address, which lasted more than three hours, that his government had brought the deficit down as a result of sound financial management. He said the core government deficit was only $2 million and the deficit for statutory authorities and government companies was just over $8 million, which produced an overall shortfall for government’s 2012/13 spending plans of just over $10 million.
Although this accounted for more than $13 million amiss in the forecast from last year, Bush claimed the deficit as an achievement — one that had been arrived at without cutting the civil service by 20%, which he said the UK had called for. Bush maintained that he was standing firm on civil service jobs and he would not cut the headcount in the forthcoming budget either.
However, he did reveal that the civil service was taking another pay cut as the cost of living allowance (COLA) of 3.2%, first rolled back at the beginning of the UDP term but returned to them last September, was being cut once again.
During the 2011/12 financial year government spending grew yet again, this time to an all time high of $546 million. Despite increases in public spending from less than $500 million in 2009, the premier insisted that, as a result of fiscal prudence, operating expenses had remained virtually unchanged since his government came to office, and all during the world’s worst ever economic recession.
A number of significant factors impacted spending this year which served to fuel the government’s $10 million plus deficit, even though it collected more revenue this year than any other government in the history of the Cayman Islands.
Bush said tertiary care costs were $5.3m more than expected, rising to $18.6m. Rental payments for people in need was $700,000 more than budgeted and transfer payments for scholarships and poor relief, among other things, also grew from the $28.8m forecasted to a whopping $34 million.
“These are increases in spending that can’t be avoided and represent the challenges we face,” he said, adding that the payments were “compulsory for a caring government” but he acknowledged that government had to implement policies to address these spending problems.
The premier said that his government would continue to play its part in the country’s recovery through fiscal discipline and that there would be no new long term borrowing. Bush emphasised on a number of occasions throughout his budget address how prudent his government had been towards debt.
However, he ignored the fact that he had originally asked for approval from the UK to increase the country’s long term borrowing by almost $60 million for a number of projects his government wished to pursue, which was declined.
Bush said that government’s debt was growing as a result of the last administration’s policies, which his government was left to deal with, as he railed once again about the new government schools and the Government Administration Building. He also said the constitutional changes, such as the bill of rights, were straining government’s resources.
He announced that government would be further restructuring its borrowing because he had been advised that the time was right and government should be able to reduce the cost of its debt payments, which are around $60 million a year in total, on accumulative debt, which currently stands at around $590 million.
See original three year budget plan here.
Category: Politics
Bush stated in his budget address, which lasted more than three hours, that his government had brought the deficit down as a result of sound financial management.
Say What? LMAO. Ummm yeah, no.
And all this with no auditable records. Next time vote for someone with at least a high school education or you get a different version of the same thing. Caymankind.
WHAT A CROCK OF @#@!!
Hey Mr Bush whathappened to the 25 million surplus you had? Hold on maybe I heard wrong. Was that one of those there it is now its gone CRAP you always preach?
First we have NO IDEA if it was 81 million deficit Mr Bush because you refused to have it audited. NEXT you claimed you made a 25 million surplus so you are no longer coming from a 81 million deficit. How in teh world do some of your followers swallow your crap is beyond me.
So despite raising more funds than the PPM government by way of taxing us out of existence you not only raised more money but you managed to spend more than you had still. Some @#@ accomplishment. You sit there and persecute PPM over there spending but you do even worse and what do you have to show for it Mr Bush? What did you do with all the money you RAPED us of? At least PPM gave us elaborate schools even though I believe we will all admit not necessary for how elaborate they were and at the time we did them BUT they gave us schools, what did you give us? Ooh wait you gave us DART!! So he could take everything and leave us TRUE Caymanians with NOTHING!!!
What a waste of precious air you are and that goes for each and everyone of your team. XXXX
I think you all should just not even run for office next year out of disgrace for the job (or lack there of) you have done.
I never thought I woudl hear myself saying this but PLEASE PPM HELP US.
Ezzard/Arden – You are also our hope. I am not sure a loose alliance will work unless you guys can demonstrate your alliance well.
Mr Bush impressed my with his overall command and understanding of the position of the three pillars of our economy and has comforted me that he is indeed the best man for the job at this time, sorry haters, but the good news s the British did get rid of Churchill after he did such a good job in ww 2, so you all may still be in with a chance?!
Elio been allowed near the computer again?
Your new appliances are now on the delivery truck!
Can some one tell me what “poor relief” is? Cuz I poor and ain’t gettin no relief! Oh, and can I get some rent money, cuz I can’t pay that and the loan on the BMW.
Yeah I am seeing trouble too, I can only afford to go to Miami once a month to party, and one of my Benz’s needs an expensive brake job, I will probably do down to social services and see if they can help me will my light bill because I like to run the two central AC’s in my apartment cold.
The headline on this article should read:
"Year ends on $10m UNAUDITED deficit".
When will McKeeva fire the Minister of Finance for gross incompetence?
Because McKeeva IS the Minister of Finance! lol He will hardly fire himself mi luv.
Sqwak sqwak sqwak…
Please get this idiot out of office ASAP!!!
And put who in his place? I certainly hope it is not Alden, Ezzard or Arden. I recommend Bo Miller or Moses Kirkconnell.
Please folks, our Premier have some good heads behind him, like Rolston, he is a brilliant accountant, surely he knows his numbers so if the Premier says 10 m in deficit I'm sure Rollie is right there to back him up. Give praise where praise is due. Our education minister is a qualified accountant and let me tell you he knows his stuff when it comes to figures. So our Premier has a lot of intelligent folks backing him, Julie is a certified lawyer and so is Cline, Mike is a graduate of Triple C, and Elio ?????? but the captain knows our waters, so I think thats a good combination.
who cares?… all i know is that mckeeva and his sheep must be removed from power asap……
Agreed, but which genius will replace him? This ain't gonna go away soon.
Figure that out later – Mac needs to GO!
If Mac and the UDP were trees, then I would pray that they be mangroves.
That way we could just lease the property that they are on – to Mike Ryan…
Cause we know what he does with the mangroves…
This is more like a $30-$40m deficit, at least, once you take into account liabilities of government which have goen deliberately unfunded. And when you start to think about the true financial state of the public purse, given that all politicians have conspired to block any meaningful accounting for years, the true picture is much much worse than anything we have imagined.
I so wish we could be sure it's not actually 100 million.
YEAH!! You know how dyslexic MAc can be – PPM claimed 18m deficit and he said it was 81m
That would be an example of dyscalculia not dyslexia.
If you give up the church funding, vote buying fund….errrr I mean nation building fund, you get rid of most of the dficit.
How was this not the first thing he let go to reduce spending?
There has to be something we can do to get him out!!! aaaaaaaaaaaaaahhhhhhhhhhhhh!!!!
I'm going crazy!!!
"if you believe this, then Toto, we're not in Cayman anymore" .
Or we all fell through the very warped looking glass.
But the pied piper is still playing and the rats are still running after him…Mac has more spin than all the island DJ's put together. However the Island DJ's probably have more maths and definitely have more credibility.
CAUTION!
Remember the PPM deficit that morphed from $18 Million to $81 Million under UDP?
Do not be surprised if the $10 Million is really $100 Million!!!
I think I could take Big Mac more seriously if he was wearing a chicken suit every time he spoke pure doo-doo.
He has no idea whats in the kitty…
In other breaking news, Premier Bush stated that not once in the 1189 days since the last election had the sun failed to rise in the east. This was he said, a " … remarkable testament to his government's management of the difficult day and night cycle."
"A number of significant factors impacted spending this year which served to fuel the government’s $10 million plus deficit…" such as Govt being sued over the port & other such settlements, plus deals with Cohen, Dart & other things costing us lots of money in fees, costs, & waived revenue. Not to mention Gasboy, road-paving, slush funds.
With all the revenue coming in, how does Govt still have such giant debt, & why seek to increase it further? Is anything being done to pay it off? These people have absolutely no understanding of finances or managing anything.
…..meanwhile on a more positive note, history was made in The Cayman islands today when for the first time the Speech from the Throne was delivered by a Caymanian. (Dare I add a born Caymanian?)
Additionally two females were sworn in as temporary official members.
I just got off the throne myself, and there was a lot of similarities between McKeeva's speech and what I delivered up just now.
Its official, Mac and the UDP dimwits really do take EVERYONE in these islands for fools., including their own supporters. You would think that they would have enough sense in their tiny brains to realise that we are a financial centre, meaning that their are thousands of people here who understand a budget process, audit practices, transparency and any other words out there longer than 2 syllables that Mac cannot understand.
How the XXXX does he expect anyone with an education to believethis utter XXXX?
If they get back in in May, these islands are doomed beyond the irreparable damage that this XXXX has caused already in the last 3yrs.
Thank XXXX my company has offices worldwide and i hold degrees and a british passport.
Until these figures are audited I would not rely upon them. I have no doubts that the AG will have a field day. Worse still the Honourable man uses these figures upon which to base the budget. As one of the largest financial centers in the world I find it embarrassing to explain the good minister’s qualifications in high finance to my clients.
Next time the premier starts talking about his "remarkable stewardship" can you just publish a nice picture of some kittens or something? I can't take any more.
Kittens would be lovely
But if he was a Pharmacist – he's be a good one!! 🙂
Dear Next Time: I don’t know about others, but I haven’t laughed so much for. Along time. Thanks for making my day.
Who can believe these numbers? Donald Daffy or Goofy?
If Donald is a duck, and Mickey is a mouse, and Pluto is a dog, what is goofy?
no comment…..
The bank robbers?
To place this $10 million into its proper context and compare apples to apples, you have to add $14 million for the past service pension liability that the previous administration was paying every year which the UDP decided to stop.
You have to also add $6 million that the previous Government was paying annually to CUC to keep the cost of electricity at a reasonable level, then there were costs incurred for extraordinary items like the Paloma event in 2008, cost of an election and constitution referendum in the last fiscal year as well as the remnants of operation tempura/cealt.
Those are just a few of the headline items but you can also talk about the higher least costs that existed before the Government administration building and the higher number of civil servants that were there at the time (which according to the Premier the electedGovernment has nothing to do with it is all the fault of the Governor)
When you start reconciling all of these things, the true picture emerges and shows fiscal prudence and fiscal restraint is not an item that the UDP Government can truthfully say is one of their achievement. But then again, when was the last time that the truth mattered to the premier?
Govt was not paying anything to CUC. It had simply reduced the duty on fuel which would otherwise be
payable by CUC (and therefore its customers) to Govt. The UDP increased that beyond the level it was before they had decreased it.
My friend, before you seek to correct people on things you do not know, please check your facts, either read the budget documents, call the Treasury or better yet, it is opposition Wednesday today, call the talk radio and ask a question. Even foolio and the gang which comes on Friday morning knows the Government had to recognize the fuel rebate as an expense item on its books which added to the deficit.
And? The money still isn't there though, regardless of who raised or reduced the duty paid or rebated. The fact is thatit's not in government coffers so not available to spend.
Fact-check alert.
During the PPM administration there was lower duty on fuel AND Government was subsidising our electricity bills by paying CUC directly. The way the CUC rebate was structured meant that only diesel used to produce electricty was cheaper, not diesel used in vehicles, or purchased for other personal or commercial use.
In January 2008 the PPM implemented a 20c/gallon duty rebate on diesel purchased by CUC as part of the new licence agreement. In August 2009 the 20c/gallon or $6 million per year rebate paid directly to CUC was removed by the UDP. In July 2010 the duty on fuel was increased by a further 25c/gallon by the UDP (the duty on diesel went from 60c/gallon to 85c/gallon).
Effectively, in a one year period, the duty on diesel used to produce our electricity increased by 45c/gallon, which was meant to save Government $6 million per year and also earn Government some portion of $10.3 million per year. It's hard to break down that second number because it was projected based on the increase of duty on gasoline and diesel, but it would be a safe assumption that the increased Government revenue from duty on diesel used by CUC (paid by us through the fuel charge on our electricity bills) makes up the majority of that $10.3 million if a 20c/gallon rebate cost $6 million.
We really have a short-term memory problem here in Cayman.
http://www.compasscayman.com/caycompass/2007/12/03/Electricity-costs-going-down/
http://www.compasscayman.com/caycompass/2009/08/12/Electricity-costs-going-up/
http://www.compasscayman.com/caycompass/2010/06/21/Petrol-duty-increase-slammed/
Foolio, pass mi dat 'raser owa deh – mus tek one zero off de end a dis spreadsheet ting we dun….