CIG faces cash flow issues
(CNS): Government has denied that it will necessarily need to ask the UK for an extension to its overdraft when a delegation from the new minority government heads to London at the weekend. However, Rolston Anglin has acknowledged that budget discussions will form a key part of the talks between the Cayman team and Mark Simmonds, the UK minister, when they meet him. Sources tell CNS that although this is the month when the government traditionally collects a significant part of its revenue, it is still struggling to pay bills and manage the public coffers.
Speaking at the now regular weekly press briefing on Thursday morning, the deputy premier, who will be one of eight people going on the London trip, said government was monitoring its overdraft position and officials were waiting until the end of this week as more of the fees from the financial services sector continues to come in before they make any decision. He said there was no intention yet to extend the overdraft but cash flow issues and the budget itself will feature heavily in the London talks.
Rolston Anglin said that Richard Holmwood, the UK’s economic advisor assigned to the overseas territories, had been on island for his regular visit to review the budget performance, which Anglin welcomed, adding that it assisted in building credible, sustainable budgets.
However, it appears that the administration continues to face problems with cash flow in the face of persistent complaints that government bills are not being paid as finances appear to be stretched to the limit.
The Cayman Islands Government (CIG) cannot extend its borrowing any further under the conditions it agreed with the Foreign and Commonwealth Office (FCO) following its approval of Cayman’s 2012/13 budget in August. In addition, there can be no appropriations to this financial year’s spending plans, which means no government departments will be able to spend more than the money they were given in that August budget. The budget was delivered more than two months late after McKeeva Bush, the former premier and minister of finance, was unable to prepare a budget that met with UK approval before the end of the 2011/12 financial year.
With the UK now keeping a closer eye on Cayman's government spending and revenue collection, it is not clear whether the CIG will be forced to ask the UK for more short term borrowing, or if it does, how the UK will respond given its position on the size of Cayman’s debt in relation to its revenue.
Category: Politics
Making suggestions is fine, we are all entitled to that. However any given one of these brainstorms hold the potential to further exasperate the situation. Example- The cutting from Civil Service leads to hundreds of unemployed persons many of which are Caymanian and will need assistance, so what then?
Each option needs to be carefully and thoroughly explored by the CIG and then realeased to the public for added input before decision making. Of course no option will sit well with ALL the people but to come to a decision that is best all round is priority. Those of us who know the Power of God and Prayer should do just that, pray for guidance is choosing the right.
And not to mention the DCFS STAFF members who collect Government assistance on a bi-monthly basis to feed thier own families. And I mean FREE lunches for thier children. Vouchers for Fosters and CUC light bill paid almost each month for themself and thier extended family. SOMEBODY NEEDS TO AUDIT THAT. And its not the social workers getting these benefits contrary to what people might think Trust me DCFS needs a serious audit on where finances are allotted without verification or due dilligence to staff. And someone needs to audit how many persons in the public get government assistance and are married with both spouses being gainfully employed. Does anyone actually spot check these people to confirm the truthfulness of thier applications? You can put anything on paper and say anything in an interview. Does anyone call thier jobs to confirm thier salaries and monthly deductions? I doubt it because its too much work on an already burdened department. And does anyone peruse the Fster's receipts to confirm that the groceries actually beingbought are necessities as opposed to unessential items. To me the vouchers should be limited to staple food items, milk, cheese, bread, meat kind and baby items. AUDIT THE SOCIAL SERVICES.
a few free solutions:
casinos….. (for non caymanians only)
allow cruise ships to stay overnight
sell turtle farm, cayman airways
implement miller shaw recommendations (reduce the civil service)
allow sunday trading
extend saturday night licensing laws
allow dart build the port & redevelop the landfill
I agree with everything but the last one.
These people just don't get it. I doubt they ever will. Haven't they heard of optics?? Like it or not, the U.K. has signing authority and what they want to see is some restraint in government spending. This group of incompetents then decides that – eight of them – must take a trip all the way to the U.K.??? To prove they understand the requirements??? They are either too stupid to understand, or just don't care or, what is more likely, both of the above.
How about CUTTING THE XXXXING CIVIL SERVICE!!!
cayman has made 2 huge mistakes in recent years…..
failure to cut the waste in the civil service
and trying to tax itself out of a recession….
I can't take seriously someone who was charged with DWI, let alone lied. Now he is representing CI. What a shameless person. Why people of CI tolerate this? That is part of your problems.
How about ask Dart to pay their fair share of duty and tourist tax for the next 90 years as opposed to giving them concessions. It is us the regular Caymanians getting hit not the guys with the money. That tells you who the politicians are looking out for.
I would prefer to ask for the churches to give back all the money they took
Except they didn't "take" anything.
I absolutely agree with you. Dart is a man of means, he doesn't need to take anything from the tourist accommodation tax to survive. To carve that out of government is unconsionable in my view and to have a government that would entertain such an idea is ludicrous! But then again, the way they have used the money gained from trading public property (West Bay Road) speaks volumes as to the intelligence of those involved in the deal on the government's side. It is just plain shameful.
OK… I have it on good authority that Dart has agreed to pay 100% of the tourists taxes it has collected so far. Since they haven't had a tourist yet, that amount is zero. Now, explain to us how that addresses the government's current cash flow problems? You people are just silly.
That is right discourage one of the very few businesses that wants to invest in Cayman and create jobs. Way to go. Noticed any major external investment in recent years that has not involved a concession? I didn't. There are very serious barriers to investment in Cayman, and that is without even counting the probelms caused by miserable people like you.
Anyone foolish enough to believe that Dart is an altruistic has never worked for any of his businesses.
Cayman has built itself up by encouraging all types of investors, ranging from those who invest thousands to those who invest millions. However, the complete lack of understanding of this by recent governments has led to ridiculous fee increases and has left us with only a few very wealthy developers that people like yourself believe are our only hope.
What we need instead is get the cost of business back to reasonable levels and to stop prostituting ourlselves to these megadevelopers. Trust me, Mr. Dart will not leave Cayman if he has to pay the same fees as everyone else.
You may wonder what makes me so certain of this? Well, it is the amount of money that Mr. Dart saves on an annual basis by not paying taxes due to his by being a citizen and resident of The Cayman Islands. Remember folks that Mr. Dart is a billionaire, which would translate to hundreds of millions a year in taxes! Like I said, trust me, he isn't going anywhere.
Sending eight(!) people to London for a week is going to cost the CIG about another $100,000. This is just more of the same sh*t we had with McKeeva. Do these people realise we are broke??? Why don't they do a conference call?
The Governor is booked premium economy…ALL the rest (Yes including executive bodyguard) are booked first class…..is there no shame, are there no controls on spending AT ALL…?
Six million dollars from Michael Ryan would help cash flow quite a bit.
That’s not even a drop in the ocean. Sack 50% of civil Servants. Cayman has the highest per capita ration of Civil Servants to population of any top 80 financial jurisdiction. Parasites.
And the highest paid in the world for doing nothing
And they would not mover a finger to collect easy cash such as fees for traffic violations.
Yea especially up the admin in brac now dats a joint
Your Momma!!!! who you calling parasite?
Our civil service is comprised of frustrated equity partners in law firms denied prospects by unfair practices in foreign offices.
Your are so right 100% of all of the non essential expat Civil Servants should be made redundant. This would reduce government expenses tremendously.
The Civil Service is basically a welfare programme.
So would cancelling further spending on the Port on Consultants in secret.
Say what you need to say outright or you will continue to be a loser.
CIG facing cash flow issues but hirling so called temps left and right to take up space and do not a damn thing. I agree with 18:40. The new Deputy Premier needs to answer why 2 of his non revenue earning departments have brought on so much staff in a recession and also explain why ths was done with a moratorium on unnecessary hiring in the service. Was it done to satisfy the genuine staffing needs of the Labor Dept and the Workforce Development Dept? I think not but more to help otherwise unemployable and some may hasten to say undesireable persons get a job. Oh did i mention that some of these new recruits are double dippers too with undeclared interests such as Board appointments, i was shocked as i myself recently had business withthe Department only to see the same person who heard my complaint now in charge of helping me secure employment after being made redunant. This is where Government needs to realize that they are seriously screwing up.
And 8 delegates so soon into a new minority caretaker government is unnecessary. The trip is required cuz they going to BEG more money we cant afford.
Ipads and teleconfrencing are modern means of communicating and all Ministrys i would bet my last dollar have them at thier disposal. Anyone of the morons heard of spype….
POOR PPL FED UP.
Be sure to ask all abou the temporary staff and consultants Mck hired …
Unbelievable! What is it? a circus?
Hahahaha spype well done 11;49
Cash flow? Just allow every resident of more than 5 years to invest $300k-$500k in return for Status. Cash flow solved. Collapsing population solved. But does ANY politician have the courage?
I doubt any of our politicians are that stupid, sorry buddy.
Nice try though.
After 2004 Caymanian Status has lost its appeal very few if anyone of substantial means and character wants CS any more. The wealthy are flocking to Monaco, St. Barts, Bermuda and BVI, Cayman is no longer the jurisdiction of desire for the well to do. Cayman has become unkempt and unattractive like one past her prime with all the wear and tear showing.
lmao! You must really think we are all idiots. That is not a question of courage but would require rank stupidity to offer such a deal. "Investing" $500K obviously doesn't solve any GOVT. cash flow problems at all since it does not provide a source of revenue and granting status to all and sundry would cause it to lose revenue on work permits. Also, ganting status doesn't mean those persons will stay if it does not suit them financially.
What about the money grabbing UDP supporters now masquerading as C$C and the Accounting Firms we paid big dollars to audit CIG accounts?
Now the true cost of 3 1/2 years of Mckeeva-ism will be felt by one and all including the holier- than-thou-money-grabbing churches…
And the cot to the people will increase over time due to the concessions gifted to Dart. This will plague us for years to come.
stop giving away free water to tourists
Its a tradition! Read the piece under "Credit Risk"
First of all you have keep proper and current accounts. No CIG department knows how.
Second you have to recognise there are expenses you are committed to but havnt yet paid, so the cash in the box isnt for spending. Its called accrual accounting, its simple but has eluded the CIG for generations.
Third, you have to recognise that you dont have enough to go around so trim your costs, ie the civil service. Certainly the last lot didnt recognise this truth, and frankly have milked the old cows to dryness.
And then you as a government have to show some restraint. Question, the horde of people that just set off to London, how many needed to go? Did they travel economy? Will they stay at top grade places, and show restraint on the expenses? Will they get straight back and start cutting their coat according to their cloth?
Answer those questions, attend to the first three points and you might have a hope, but there again, there is this tradition!
"Its called accrual accounting,"
No it is not. In Cayman it is called"cruel accounting" because it causes the deadly diseases called "work" and "professional competance".
It is too bad that these "deadly deseases" are not contaigeous in Cayman.
Is this really news?
What country isn't facing "cash flow issues" at the moment?
I would love to be a fly on the London wall this weekend and witness the triple-dip economically recessive UK scold the CIG for its monetary issues.
No its not really news that our governments continue to consider their budget as 'spending money'. What will be news is when they finally realise they are supposed to aim to come below budget rather than spend it all.
I am not even going to bother to address the rest of your comment, because it would be like playing a scratched record.
In that case, pray tell, what do the UK ""governments" continue to consider their budget" to be?!
Let us not forget that between the two countries, only one has the right and "advantage" of printing new money out of thin air – and it has done so to the tune of 350,000,000,000 (b-i-l-l-i-o-n) pounds in the last 18 months alone.
UK budget, what UK budget?! Surely such a thing does not exist. Therefore, how can they advise others on sticking to one?
Whodatis, stick to the point. UK govt does not have cash flow issues. Cayman does, mainly because of abuse of the finances.
Whodatis needs counseling to deal with his issues with the UK government. No matter what the Cayman issue he bashes the UK, it really doesn't move the conservation forward.
Rule Brittania loving days are over
What were you hoping to conserve?
Lol!
My guess is he is trying to conserve the conversation!
🙂
Whoaaaaa Nellie,
Anon 14:22- aren't you being a little disengenious?
Do you really believe the UK printed 350 bil pounds only to provide liquidity to the credit markets? I say the UK has printing press issues- they can't stop the urge to print more.
I suggest we stick to the facts and perspective as Whodatis often suggests:
Cayman has a spending problem, poor accounting, misuse of funds, and budget issues
UK has a spending problem, poor accounting, misuse of funds, and budget issues
The only difference is the UK is the mother ship/bully and can reprimand the Territories simply because of their position in their colonial hierarchy and not their astute ability to management a government. Oh and they can print money at will like mad hatters.
Neither is better than the other, one just happens to be at the top of the food chain.
Ummm, I think it is a matter of you not getting the point.
Point = UK "does not have cash flow issues" because it simply PRINTS new cash!!
*NEWSFLASH!!*
This is NOT a solution to the problem. Instead, it simply inflates the problem and merely guarantees a greater, messier burden for the next generations to come.
Are you and your friends really not understanding this are do you simply enjoy playing stupid?
Either way, I'm done.
Whodatis,
I am certain they don't understand the implications of the printing of money for one or all of these reasons:
1) They simply choose not to
2) They have no idea what you are referring to
3) They don't want to believe that the UK has been fiscally mismanaged
4) Cayman is much smaller and it is easier to place the magnifying glass on every discussion topics which inevitably gets blown out of proportion
I support the perspective you are trying to bring to the conversation and commend you for the efforts. There may be some narcissists in the crowd who will simply never allow themselves to understand it.
Thank you for the support, VIA.
You've hit all the nails on the head.
It is amazing how much ignorance exists in the world today when it comes to these issues – frustrating as well.
You compare apples with pigs. At least the UK knows how much it spends and is cutting that spending. All figures here in Cayman are smoke, mirrors, 10% for someone and a prayer. And no-one understands "efficient" or cost effecitve Civil Service, cos that would cost jobs and therefore votes. But bankrupting this country is ok, just make sure we get voted in again.
Future MLA"s. Please note, nothing left to steal in CIG, so you might as well just let the honest and intelligent candidates stand whilst you spend your ill gotten gains. Enjoy.
Aren't some of the existing ones already planning to do this?
http://www.publicfinance.co.uk/news/2012/11/whole-of-government-accounts-qualified-for-second-year/ put that in your pipe and smoke it in your holier than thou UK. Perhaps you should do some research before you open your pie hole … just saying
You are a fly
… and you are corresponding with me.
What then does that make you?
(Gosh – just had a flashback of middle school.)
He really does have Daddy issues doesn't he?
@Whodatis, since my best guess is that you are a paid anti-colonialist, why don't you and your group, volunteer to take over the contingent liability that the UK will face with the inflated CIG?
This debt is not only a problem today but in future when the contracted/status holder civil servants leave Cayman, go back to their anti-colonial (trying to be independent ) countries but are entitled to collect pension from the CI government. The few Caymanians remaining and few foreign lawyers your anti colonial friends haven't sent home or married off, will be left to pay the bill.
Signed
Caymanian by birth, in name and loyalty
You bore me.
Honestly, you do.
Because they can!
allowed
This will be the major challenge facing the new government to deal with cutting expenses and not simply spending their way with grand designs. Cutting expenses is never popular and with the civil service being the largest voting bloc in the country expanding the voter roll is a must.
The current lot of recycled politicians haven't been up to the task of reforming government and are certainly short on solutions. New blood and fresh ideas are needed to bring the country together.
The nationalistic xenophobic rantings of the silly season move the country backward and voters should send these dinosaur politicians out to pasture.
Perhaps it is time for Government to stagger expected revenue so that income is more evenly spread over the course of a year.This could be achieved by stopping the practice of collecting all annual fees in January or the first quarter of the calendar year.Instead billing and collection dates could be based on an alphetical system or a system based on some anniversary such as the date a company was registered.It works quite well for Vehicle and Drivers Licensing so no reason it should not work for other Departments.
Acrual accounting (see above) it works both ways, you cant spend it twice, so if you are committed it is treated as spent! For income, yes, you can make use of it early, but recognise that it is annual, all this involves keeping good records and using prudence, so thats why it isnt coming to Cayman any time soon!
Solution: Fire all the double dipping 7th grade morons in the LA that are each pulling in close to half millon a year.
Then why the hell did the labour and Pensions office get 5 new employees making in excess of $4000 per month each and these jobs were not even advertised. Ask the Hon Rolston to answer that. Also ask what the hell these new officers are doing probably a big fat nothing. I would just love to see their end of month reports. What a joke
What end of month reports?
The next thing you will hear is "income is not as much as expected" what a surprise.
Do eight people really need to go ?
Crazy, considering the situation
Have they not heard of video conferencing ?
How about a Tele-Conference with Mr. Simmonds to save some money.
A phone bill would certainly be less then a number of business class or first
class plane tickets, luxury holtel rooms, and fancy dinners out in London.
Just say'n………………………………………..
Please get the true reason for their trip now. It is close to May and most of them if any at all will get that free privelidge again.
The UK only just approved the budget but the gov is looking at stretching the borrowing already! Start making CUTS.
Did anyone explain the meaning of "Cash Flow" to JuJu, or did she follow Big Mac's example of the cash is flowing?
She made an excuse that she could not attend some News conference in Cayman thursday. However thursday night she was attending Red Bay church. Thats when you dont want to answer questions. Some people don seem to respect the commandment " Thou shalt not lie". Thank you God you are so merciful that you allow some people to stand on the pulpit without striking them down.
Just enforcing traffic and other laws will bring a steady stream of cash. Why is this not being done? If I understood correctly problems with the new HS buiding are sucking out thousands of $$$, or is it being corrected at the builder's expense?
So….. when the money comes in toward the end of January which is for the whole of the year from a revenue point of view, will it all be spent before May 22nd and the next Government be held responsible?
You got it right the first time. First of all, JuJu has been trained by Mac and her practice for the past 4 years almost. She travelled as much as he did and went to all sort of exotic, expensive places. While the whole government is off the island again,the people are in need, worse than they have ever been. You would never believe that this government took power during one of the worst financial recessions the world has experienced since the early 1920s. Of course, the "yaddie mentality" believed the accusation that the PPM had put us there. Did the PPM cause the financial recession in the US? I think not. Anyway, if this now government cut their own clothes to fit their cloth, we might survive, but I would not hold my breath. I still say that the Governor should have dissolved the LA and called for early elections and there should be a law that those causing the financial problems cannot run again for a period. My parents adopted a sister for me, because I was an only child and they placed us both on a monthly allowance. If we over spent. then we forfeited the overage from our next month's allowance. We learned early that we should be careful in ourspending. Why can't the Cayman Islands Government use the same simple technique?
The public finances are a national emergency. Millions upon millions have been and continue to be lost, wasted or misappropriated all of which is completely untraceable because there is no accountability. And none of the people who can fix it want to fix it because they all benefit from the lack of accountability.
Meanwhile the financial services sector- AKA the goose that lays the golden eggs- is in free fall because of the exorbitant fees the government is imposing to cover up the holes in its accounts.
The UK needs to step in because there's no other way its going to get fixed.
Are you talking about the same UK that is unable to manage their own finances?
How much is an eight strong delegation (in business class) to London going to cost????
Different year, "different" cabinet, same s##t! These idiots were part of the old problem, do not re-elect them!
Do you really need to take EIGHT ppl?
no wonder we broke!
12000 in tickets and prolly another 12 in expences, Cha da nah nutin man. They will just dont pay some bills and take care of that..
Why do the government departments continue to spend more money than has been budgetted for them? Isn't this illegal?
A delegation of 8 people to discuss a budget??
8 people.
Really?
This FAB5 bunch of idiots need to do better.
No one stops them from spending more that they budget for. If they didn't get paid one month because the money ran out, that would nip it in the bud. They probably take their cue from the MLA's tho', who go through our money like water.
So, let me get this straight. The politicians spend as they please on trips across the WORLD, attending postal conferences and the likes. But other financial obligations cannot be met?!!
Whats wrong with this picture?!!! This just goes to show how out of touch these so-called leaders are.
Those who vote in Cayman better wake up and do the right thing come May, and vote this previous, but still remaining in power party, out of office!!!!!
If this set that is in charge get back in and remain at the helm…..then it is good by Cayman for good.
Don't believe me?!! Just wait and see what happens if they are returned to power.
Fixing this country is like trying to repair your vehicle after it has been reduced to a bucket of rust.
T & T (Tax and travel)
We spend what it costs to provide the service. Perhaps the problem was politicians passing unrealistic budgets because thats what they thought the public wanted to hear? – Remember, the problem is 'cash flow'. – If you tell the Government you will need $X per month for your building's A/C bill and they say "OK, go ahead, we'll collect $X+$Y", but then its not collected because they made the number up, you have a cash flow problem at the end of the month.
If they can't apy January what month can they pay?
Why dont you ask Mr McTaggart, KPMG was one of the Accounting Firms Mac paid a chunck of money too to prepare audtited accounts
Dont worry UK. We will soon have fiscally responsible leadership that wont cause us to be embarrassed like we have been. May cant come soon enough. The independants are coming tothe rescue!!!!!
Y a think
…..because when they come in under budget it is automatically assumed that the can and should be reduced next year irrespective of future or perceived funding needs.. hence spend more so that there can be no budget reduction.
this is why the system has failed.
Nah, just incompetent and possibly corrupt.
Gasboy card anyone?
The problem here is that the revenues they projected were pulled out of thin air and not using statistical models. This issue we find out when the cash reserves are low, typically December and January.
The expenditure is most likely severely understated but we won’t know that until April or May when all the departments spent all of their allocations. Remember that article in October or November when it was reported that the departments took large amounts of cash when the budget was approved? They are nowspending April’s money. Wait and see!
And when will government departments stop seeing their annual budget as money to spend and start looking for money in terms of savings, better deals, more efficiency, with a view to spending LESS than the amount allocated to them each year. Classic example of what I am talking about is here: http://www.itv.com/news/update/2012-10-23/london-2012-to-come-in-amost-400m-under-budget/ where the olympic stadium came in $400 million UNDER budget. We need prudence with the public purse not ignorance.
Do you actually believe they are not spending more than has been budgetted?
Dont worry some people is good at begging. I thought that since Mack is not at the head that there would be no more need to borrow money. A trip so early?
Which part of
In addition there can be no appropriations to this financial year’s spending plans which means no government departments will be able to send more than the money they were given in that August budget.
don't you understand?
Whoa there, January is payment time. At this stage of the year how can they be short unles they are overspending?
Actually, departments were being told to not spend money in their budget as the money was not there. The situation seems to have relaxed in the last couple weeks.
How many times were you told not to spend that money at the pub…. because bills had to be paid??
14;50
Do you really think the government goes out and spend money on new toys, like i pods and vidio games??? like some of us do???
Try and open your mind…think with your brain..CIG has a lot of expenses..and responsiblity to run this country..and it takes money to do so…they are not on the street begging!!!
No. It is only illegal if you get caught and the prosecution does not mess up the evidence.
Remember people, the Cayman Islands Government was dictated to by the former Premier (dictator) who spent money that will not be available for another 5 years. Maybe the UK will approve more loans, but if so, then we need to ensure that the poor, indigent people of the Cayman Islands are remembered. The DCFS also needs a shaking up. There are people on their lists who cannot live in intense heat, however that department only takes care of the people who are their friends, not really the people who are truly in need and refused to help that young lady. I know a lady who is partially crippled. She has a deformed hand and leg, both on the same side. She went to the DCFS and applied for insurance through CINICO. She was told that she would have to pay 100.00 per month for the card. This lady is seriously crippled, but limps and hobbles using one hand to drive a taxi, because she did not want to beg anyone for anything. Now she has reached a stage where she desperately needs dental work and cannot get it, because she cannot afford to pay for it. I know a lot of people that are being supported by the DCFS, who do not need that sort of assistance free, but just happen to be friends with some one on power in that department. I hope that is seriously looked at under a new government.
Yes, it is about time that the lists were gone through and people who can look after themselves do so. How did we get to 9000 people receiving social services benefits? Some people have no shame and some politicians are part of the problem as they keep giving people a "hand out" instead of a "hand up". My votes will go to the candidates who say they do not support this system and are willing to do something about it.
True, and many of th 9000 – nearly all of them Caymanians mind you – own property, but still go to the government for dole.
Apparently nothing is really illegal in CIG. Laws are more like guidlines for the blind.