Politics
Port needs upgrade not piers
(CNS): The member for North Side has said the government doesn’t need to build expensive piers in George Town and hand control of the local cruise sector to the cruise lines. Speaking in the LA on Thursday, Ezzard Miller said it was important that the Cayman Islands improve the experience for people visiting on cruise ships but he said there were ways that could be achieved that would be far more cost effective than the current plans for two piers. Miller also queried how government could be spending some $2.5 million on an environmental impact assessment (EIA) when they have no idea yet what will be built there.
Miller said he backed investing money on the enhancement of the cruise experience but he said the country did not need to build the piers. During his response to the budget debate Miller said bigger and better tenders and more of them, along with the beautification of the terminals would be more beneficial to Cayman than the massive investment the piers would require. The North Side MLA said he believed passengers just needed "somewhere to step on to” that’s safe and clean, and if that was a luxury tender rather than a pier, they would be happy.
He criticised the recent business case undertaken by consultants to justify the project as he said it didn’t properly evaluate alternatives. The member said he believed the introduction of high end, multi-hull, glass top, comfortable, quality boats could be part of the travel experience for visitors.
“Cruise berthing does only one thing which is give the cruise lines greater control,” Miller warned, as he urged government to re-think the issue.
He questioned where the real benefits would be for Cayman’s tourism industry, as he said the cruise ships would still not stay overnight and there were no guarantees that it would translate into more business. He said what was needed was a full scale review of the experience, regulate what was happening at the terminals with the tour operator issues and beautify the area with more trees and greenery.
The independent member said he could not support the plan to develop cruise berthing piers and was concerned about the cost of the EIA, which was being paid out of the public purse, especially as there were no plans yet for the assessment to review.
“How can we do a $2.5 million EIA if we don’t know what we are building,” he asked, and raised concerns that once it was done, if the government presses on with the plans it may cost it another million dollars to update the plans and revise the assessment.
“Things can be done to greatly enhance the experience for a lot less and that’s what we should be doing,” Miller said as he pointed to many possibilities, including employing some of the country's senior citizens to dress up in traditional clothes and spend time helping and assisting arriving passengers and acting as tourism representatives.
In his two hour contribution Miller raised a catalogue of concerns with government and highlighted what he said was the continued disregard for the constitution, with the erosion of the Throne Speech and the emergence of a Policy Statement, as well as the Budget Address.
He pointed to his worries about the medical standards at the Health City hospital in East End as well as government’s failure to address the many problems relating to health insurance.
Miller railed about the excessive bureaucracy and incompetence people encountered dealing with and accessing government services and the MLA also begged for government to add a staff room and classrooms at the newly renamed Edna Moyle Primary School in his district as he pressed home his constituency needs.
He noted government’s failure to mention 'one man, one vote' in its legislative calendar for this financial year and warned the people that despite the PPM promise on the campaign trail, it was obvious that they were not going to bring in the change. By the time they got to the start of the 2015/16 financial year, the North Side member said, the government would be full of excuses about not enough time to make the change and teach people how to vote.
The failure by government to mention the introduction of a minimum wage did not get past Miller either, who has been a tireless advocate for the introduction of basic pay but whose constant efforts to press this government, and the last, to introduce it via various motions have been thwarted.
Premier ‘wowed’ by amount of work PPM has done
(CNS): A report of the government’s work in its first twelve months in office was presented to the Legislative Assembly on Thursday by the premier, who said even he wassurprised by how much the Progressives led government had done its first year on the job. “I knew that we had accomplished much since our swearing in exactly one year ago to this day, but I must say I was a little overwhelmed when the report was placed before me. I thought to myself, wow, we have done a lot in our first year,” Alden McLaughlin told his parliamentary colleagues as he presented the report. The premier went through what he said were a few the highlights, from supporting the private sector to new laws and policies.
As he concluded the round-up, he said the PPM had promised to put government and the Cayman Islands back on the right course. “I think that we have done much in our first year to restore confidence and right the good ship Cayman.”
He said that the government could take satisfaction having done so much but they also realised, even more so now than at the start, “that there is so much, much more to be done”. However, he said the PPM administration was ready for the challenge.
“We have proven that we have the determination, dedication and self-discipline and we’re more than willing to make the effort,” the premier stated, adding that he looked forward to delivering an even more impressive report on the second year.
See full report below.
Fuel duty cut won’t help 100s with no power
(CNS): The opposition leader criticised the government’s fuel duty cut saying it would not help people struggling to pay high power bills because of the delay until January and would do nothing at all for hundreds of people whose power supply has been cut-off. McKeeva Bush said to tell people they will get 4% off their fuel bills in January, when the bills fall anyway because of the cool weather, and when they have seven hot months to get through was a “slap in the face”. He said government was losing CI$8 million in revenue “for this paucity” when it would have been better to use that money to help those without power at all.
He said it was not at all meaningful and the fuel duty which had been imposed by the UDP government was down to the current premier and the money he spent on the schools. Bush said he was forced to increase it in order to fight off the UK’s attempts to make him introduce a direct tax.
During his response to the budget debate on Thursday, Bush talked about those who were very badly off at present that no one wanted to talk about but there were people facing very difficult times.
Bush asked where the government’s social conscience was when they had a surplus of more than $108 million and this “was the best they can do”. He queried what they were doing about children going to bed hungry, in homes without power and the suffering of the elderly and the disabled.
He said reducing the cost of electricity by a scant 4% in the cooler months was not meeting people’s needs or coming anywhere near dealing with the crisis of so many people being cut off or giving them jobs so they can pay their bills.
The opposition elader said after a year in office of “Cayman’s most brilliant minds” they weren’t offering much.
He took the government to task over unemployment and said they need to get people in jobs as it would not matter how much they take off the duty if there is no work, and getting people employed was the key to boosting spending and the economy. Bush said finding ways to create work was the most important goal government should be aiming for to reduce the burden on social services and have people paying their own bills
“Does the premier really believe the people are blind or deaf or have lost all their memory?” Bush asked, as he urged government to better use its time and energy to take on the real challenges. People are without water supply as well as electricity and were facing losing their homes, their jobs, their businesses and they are not able to pay their bills or buy groceries, he said, adding that those were the problems government should tackle.
PPM riding Mac’s gains
(CNS): The leader of the opposition accused the premier of taking credit for the advances in Cayman’s economic situation when most of them were as a result of policy begun under his administration. When he began his response on Thursday to the government’s budget, policy and throne speeches McKeeva Bush said he was pleased to see the finance minister maintaining the fiscally prudent approach that he had started when in office but was amused by the premier’s claimed accomplishments in his first year when most were started by the previous UDP administration. Many, he said, were things that when it was in opposition the now government had opposed. (Photo Dennie Warren Jr)
From the Shetty hospital and medical tourism to the new Dart hotel as well as the launch of sports tourism Bush accused the now premier, Alden McLaughlin of riding his gains as he said these were all policies developed and started when he was premier. Bush said the policy statement was almost a verbatim copy of his government’s policy and he was pleased to see the continuation of all of the things the UDP administration had started.
“The present government is enjoying the early rewards for the bold action we took,” he said, as he listed achievements he claimed were made during the last government from the creation of the special economic zone to the success in overnight tourism which the government was now taking credit for.
He denied that confidence had ever been rocked in the country during his time in office as Moody's had retained Cayman’s rating. He also said he had already done a lot to help local business including some $11milion duty giveaways to Cayman not foreign businesses. He said that he had tried to help anyone who showed up at his office that needed it regardless of “which side they were on.”
“They can’t say we didn’t do work that wasn’t successful,” Bush said, but he spoke about the constant criticisms that had worn his government down.
He said the premier couldn’t keep quiet in his speech about the former government and what the UDP had done, but Bush emphasised the launch of medical tourism with the Shetty hospital and the efforts to diversify the economy as well as the Dart deal all of which he said he was proud of. He took aim at the premier for criticising the deal and said it was no worse than the one they were trying to get “with those people up in Frank Sound” as he said that was not going to be any better.
“I got something what have you all got?” he asked.
Raising his concerns about the impending civil service cuts Bush said people criticising government workers need to remember that Cayman did not get as far as it has without a good civil service. While he agreed there can be improvements he said selfishness from the people at the top of the service had blocked those trying to work their way up. He accused past civil service management of taking all the money for themselves when the wages were reassessed, leaving nothing for those at the bottom.
Bush said that government’s 2.5% bonus announcement was another demonstration of how those earning the big money would be well rewarded by that when it would be nothing for those at the bottom on the front line who deserved it most.
The former premier pointed out that it would not be easy to reduce the civil service as the private sector may be clamouring for cuts but they were always the ones that want more, calling for more policing and other government services. Bush pointed out that the constant criticisms of the civil service for those on the front line undermined moral when the huge majority of those at the bottom were pulling their weight as he urged the criticisms to stop and for people to be more grateful.
Bush also criticised the UK for telling Cayman how to cut the civil service when he said that they had messed up their own country and were “now coming here to tell us what to do!” he exclaimed.
The opposition leader also implied that the PPM government had attempted to borrow but the UK had flatly refused them. “They had a borrowing plan and the UK had turned down their request ….but we never heard about that,” he said. Bush said he was intrigued to hear that despite the claims they had gone to London with a borrowing plan though that appears to have been related to the last budget.
Bush added that, “I had to listen to them chastising me on mangling the UK relationship,” but
“I am still waiting to hear from him (the premier) what I did to mangle the relationship,” he said, as he accused the current premier of constantly fighting with Stuart Jack during the 2005 to 2009 administration. Bush said he did not make the UK-Cayman relationship bad but he had stood up to the UK and the FCO when they wanted him to introduce direct taxation after the PPM broke the public management and finance law.
“They thoughtthey had us conquered,” he said. Bush spoke about being called to London shortly after being elected to office and said he was told by the FCO to cut 500 jobs from the civil service and to put in property or payroll tax.
“I said no BoBo…. you taking to McKeeva Bush,” the opposition leader recalled, adding that he was nobody’s puppet.
He said if there was a lack of confidence in Cayman it was because of the now premier’s mistakes that wound up getting Cayman on the OECD black list. Bush said the premier now "had the audacity" to accuse him of losing investor confidence. The opposition leader said that ringing a bell doesn’t build confidence as he criticised the premier for making such a big deal of his Wall Street trip. “I had eight invitations to go ring the bell but I didn’t have time. I was ringing the UDP bell,” he added.
Bush also took aim at government for not doing enough to help those at the bottom of the pile and about creating jobs (see separate report on CNS later today). The opposition leader said there was much more that needed to be done to plan for Cayman’s future and get people back to work.
Minister aims to fight remaining discrimination
(CNS): A new consultation exercise to gather more information about the situation in the Cayman Islands for women and girls has begun. The ministry with responsibility for gender affairs has published a report based on a gender conference held earlier this year and issued a questionnaire to help towards the implementation of the United Nations Convention on the Elimination of All Forms of Discrimination against Women (CEDAW). The request to the UK to extend the treaty protecting the rights of women was made some time ago and the current gender affairs minister, Tara Rivers, is now anticipating a favourable response and as a result Cayman will need to address remaining issues of discrimination.
All Cayman Islands residents are invited to participate in this broad public consultation exercise and submit written comments on the situation of girls and women by Monday, 30 June and the ministry will also host an event in Cayman Brac to address the special circumstances of women and girls living in the Sister Islands.
Following what was described by the ministry as an “overwhelmingly positive response to the National Conference on Women”, Rivers, who has responsibility for gender affairs in her education and employment ministry, explained that work was now going on towards the adoption locally of CEDAW. This data gathered during the consultation will be used to inform the local implementation plan for this treaty by identifying priority issues and strategies to address discrimination in local legislation, policies and practices.
“The ministry will continue to build on the momentum that has been created and seek to maintain and increase the level of collaboration as we move forward, using this knowledge and inspiration to help shape the national agenda and to improve the lives of girls and women and, in turn, society as a whole,” Rivers said.
The National Conference on Women report and the public consultation questionnaire are posted below. The documents are also available from the Government Administration Building.
Public mutuals ‘best solution’
(CNS): A local business owner is suggesting that government re-think its strategy to sell off government assets and look at mutualization as an alternative – a solution that he said is “taking off like wildfire in the UK”. Steve McIntosh, owner of local recruiting agency CMLOR, explained that the initiative, also known as public mutuals, involves setting up a government entity or department as a private company, where the existing staff become shareholders, and to contract that company to deliver its service. McIntosh is suggesting that in Cayman, 40% of the government entity would be owned by the staff and the other 60% would be auctioned off in 10% blocks to individuals, maintaining that there are many local investors who are willing to help the country but would apply real market forces and expect accountability.
Under the mutualization scheme, if a government department is currently costing $1 million to run, as a company it would be paid roughly the same amount as part of its contract but it would be up to the staff, as shareholders, and the investors to make the department run more efficiently, effectively privatizing government without laying anyone off.
The company would be regulated by its contract with government and equity would be distributed so that 20%, at no cost, was given to the management team, according to seniority and length of service; 20%, at no cost, to the remaining staff; 60% to private investors, who would be invited to bid for tranches of up to 10%.
McIntosh suggests that the initial contract would be for a period of five years (non-performance notwithstanding) after which the contract would be renegotiated. The fee paid to the company would be 95% of the prior year budget and would reduce by 5% each subsequent year of the contract till renewal at year five. The new company would be required to rehire all of the existing staff and retain them for at least five years (dismissal for cause notwithstanding) on no less than 95% of their current salary.
He said that some departments and entities with distinct roles, such as DER, DCI, Radio Cayman, the Cayman Turtle Farm, Computer Services, Hazard Management and Lands & Survey, could be turned into public mutuals very easily, while other services, functions and teams within larger government ministries, such as the Education Ministry's scholarship secretariat, could potentially be gradually spun off in a similar way.
McIntosh said there are a couple of departments that he would invest in as a philanthropist, such as the National Workforce Development Agency (NWDA) because he believes, as a professional recruiter, that he can usefully contribute to the running of the department. His investment would get him a seat on the board, and while he would not have control of the company, he would have a say in the way it was run. “In this way, you would harness a great deal of management capability and innovation for free.
“Right now, if a government department is totally dysfunctional, basically the recourse is for the ministry to come in and to micromanage the hell out of it,” he said and pointed out that the failing department would have compounding problems, such staff issues, infrastructure problems, budget problems, and micromanaging rarely improves things.
“Government generally tries to solve problems by taking more control and what’s needed is for it to have less control,” he explained. Some services, such as education, cannot be just about profit, but, McIntosh said, “I also believe that with a total absence of market forces you’re going to have sub-optimal outcomes. Most governments are trying to bring in the effects of market forces without the downside, like monopolies.”
One of the hardest things to do when it comes to management is to fire people who are not performing, McIntosh said, acknowledging that if it wasn’t his own money he was dealing with, he would be tempted to find excuses not to do it. This is one area where market forces needs to be implemented in government services. Each public mutual company would have independent boards with the power to hire and fire, he explained, which would be one of the main areas that distinguished them from the concept of statutory authorities and government companies, where government retains control through the appointment of the boards.
The key to the scheme is the contract and government would have to get good at writing them, he said. If a company that is a former government department failed to deliver, it is far easier to cancel the contract, he noted, and it could also be written in the contract that government retained the ability to de-mutualize the department and take it back into core government if the public mutual is not working. “At the very least they would get a year of people clearing it up,” he said.
“Everyone agrees that government is somewhat inefficient in what it does but the solution to that is not to make arbitrary cuts,” McIntosh told CNS Business. “People like idea of smaller government in the abstract but when it impacts services, they’re likely to feel differently about it. It’s the paradox of government. The solution is to find a more effective ways to deliver services and I think the leaders of the civil service understand that.”
McIntosh said that he came up with this idea a few years ago as a solution for the Cayman Islands, calling it ‘management buy out’, and put it to government officials at the time, but they wanted to know if it had worked anywhere else. “At the time it was just a hair brained idea that some recruiter had come up with. But as I was following the SAGE Commission in Bermuda, they referred to ‘public service mutuals’ and I realised that it was exactly what I had proposed two or three years ago. And when I researched it, I found out that there is a department within the UK government that is set up to create these companies.”
McIntosh said there is a “tonne of willingness to tap into” within the private sector. Many within the business community are ready to assist in sorting out problems within government, he said, and the reason that no one has yet stepped up to help in the rationalization process is that they have not yet been asked. “There’s nothing to step up to yet,” he pointed out.
If the rationisation process goes ahead and civil servants are laid offt, he said there are jobs in the private sector to absorb them. “The employment market is not as difficult to understand as a lot of people think it is,” McIntosh said. “In a country where there are twice as many jobs as members of the workforce, which as far as I know is a unique situation, the one and only reason anyone is out of work is that of salary expectation.” Stressing that this expectation is not always unreasonable, he said that if civil servants were made redundant and the salary expectation is in line with the market, there is no reason why they will not get hired.
However, he does not think the government’s plans to sell off various public entities is going to result in a loss of many jobs because it’s just not going to work, being, for one thing, politically very difficult.
“Mutualization is by far the best solution – it's a no brainer. It doesn’t involve a single layoff and converts departments from public to private entities and the employees of the department become owners in their own department,” McIntosh added, noting that the system would fit well with the existing Public Service Management Law and budget documents, which set out the deliverables. “We’re already halfway there,” he said.
Budget process leads to parliamentary bust-up
(CNS): The premier and opposition leader were in a legislative stand-off Monday over the process of how the budget will be debated on Thursday. The state opening of parliament for the budget meeting began with an exceptionally short Throne Speech from the governor, but the Policy Statement behind the PPM government’s 2014/15 spending plan was delivered by the premier ahead of the finance minister's Budget Address. Although Opposition Leader McKeeva Bush began the practice of delivering a policy statement with the budget when he was premier, he objected strongly to the plan to merge the debate with the budget address, saying government would get to “talk twice” when once was “enough for most people".
When Bush was premier he was also minister of finance, and so he delivered a merged address and was then the only minister to respond to the debate on the Throne Speech, the policy document and the Budget Address. However, in the PPM government Premier Alden McLaughlin is not finance minister and, as a result, after the conclusion of the debate on government’s policy and budget, which starts Thursday, both Finance Minister Marco Archer and the premier will deliver responses to the LA.
When McLaughlin proposed the motion Monday after the budget that members would be given several days to digest government’s spending plans and then return to the LA Thursday to debate it, the opposition leader objected.
In a lengthy speech Bush said he had researched the Commonwealth and could find no parliament where a government was allowed to speak twice and accused the administration of undermining democracy. He said that two ministers could not both respond to one debate, and with no precedent and no justification for his actions, the premier could not manoeuvre himself into position to close for the finance minister on the debate when it wasn’t the premier’s job to do so.
Bush said that when he had introduced the idea of a policy statement, there was still no minister of finance, and with the Throne Speech delivered by the governor and the budget by the financial secretary, the premier began delivery a policy statement on behalf of the elected arm of government. But what McLaughlin was now doing, he claimed, was abusing the parliamentary process. The opposition leader said if the government wanted to review how the budget was delivered that was one thing, but he accused the premier of changing things ad hoc and disregarding democratic principles.
“We shouldn’t change rules on the fly to suit the government or the premier’s personal whims,” he said, adding that parliamentary procedure simply does not allow government to speak twice. He said one minister alone should reply at end of the debate, speaking for all of government. He said government did not need “to speak twice as once was enough for most people".
McLaughlin then accused Bush of ignoring the facts, since he had set the precedent. The premier also pointed out that the speaker ruled on the issue last October when the decision to merge the debates was agreed as a result of time and practicality.
The premier said that parliament should not allow “the opposition leader’sparanoia to go against good sense and reason”, as he urged the deputy speaker, Anthony Eden, not to overturn the ruling made by House Speaker Juliana O’Connor Connolly, who was absent Monday.
McLaughlin explained the thinking behind the move as he pointed out that the Throne Speech was exceptionally short, providing just a review of government’s position while his speech provided the policy behind the budget. Then Archer’s speech addressed the practical application of the policies in the financial plan – essentially three elements of the same thing, making it sensible to debate the issues together.
However, the opposition leader objected further to McLaughlin’s justifications and the two men engaged in a heated argument across the chamber, with both refusing to give way to the other as they yelled incoherently.
Interrupting the shouting match, Eden stepped in and said he was upholding the previous ruling that the budget debates would be merged but acknowledged this was another area where the parliament’s Standing Orders needed to change to represent the constitutional position.
Eden said that at the risk of “being crass”, he urged both leaders to get to the point where they stopped “playing last lick”.
See Throne Speech below.
Tax breaks on duty, licenses
(CNS): The finance minister has managed to find a little bit of room in his 2014/15 spending plan to help everyone out with a cut on the fuel duty paid by CUC, which should cut electricity bills by 4.3%, and on duty for goods bought by licensed traders that he hopes will be passed on. In addition, Marco Archer revealed that there will be some significant cuts in the cost of trade and business licenses for small business in the districts and to provide for payment in installments across the year. He said he hoped the reductions would make a difference across the whole community with cheaper fuel bills and a cut in prices, as well as giving small businesses a break.
The tax breaks were revealed by the premier in his policy statement and detailed by Archer when he delivered his budget address.
Premier Alden McLaughlin said the fee cuts were aimed at helping small businesses because they are key to Cayman’s economy, with 60% of local businesses classified as small, employing under 11 people. Alongside the cut in fuel duty for CUC, which should see bills come down for commercial and residential customers starting on 1 January next year, the cuts include a reduction in duty for licensed retail traders only on most goods from 22% to 20% starting on 1 July. Trade and business license will also be cut starting in July and a payment scheme will be introduced for those fees.
McLaughlin said these were just the start and there would be additional cuts as government revenue strengthens. He also pointed to the possibility of Sunday trading, which he said would be subject to public discussion, and the introduction of daylight savings to help tourism and financial sectors coordinate with the North America.
Detailing the tax breaks, Archer said the 75 cent duty on fuel imported by CUC will be cut by 25c from 1 January. Although it cost the public purse more than $8 million, the anticipated beneficial knock-on effect in the economy would outweigh government’s revenue loss, the minister stated. Aside from the essential direct relief to customers, Archer is hoping it will also improve local spending power.
That too should be assisted by the cut in duty to retail licensed traders. Archer said that government plans to cut duty for merchants from 1 July, and although government will lose some $4 million in revenue, again the spending boost that government hopes will be triggered will help alleviate that loss. He said that government would also be watching prices closely to ensure the 2% reduction on goods is reflected on the store shelves.
Archer is also giving all small businesses a break with a cut in trade and business license fees. Business in George Town will see the fee come down by 25% while in North Side, East End, Bodden Town and Little Cayman license holders will get a 50% reduction. In Cayman Brac, licenses are being slashed to 75% and other breaks on that island include 100% duty free building materials, a duty cut for Cayman Brac and Little Cayman Power and Light Co. and a 75% stamp duty waiver on land developed within two years.
Archer said that the multiplier effect of this fee reductions should help boost the domestic economy and help address what he said was the worrying problem of a shrinking middle class.
For full budget documents and details of the 2014/15 spending plan see related story on CNS: Archer exceeds his targets.
Archer exceeds his targets
(CNS): The finance minister’s aim for his first budget was on target, the Legislative Assembly heard Monday, when Marco Archer said government expects to exceed the more than $100million forecast surplus for 2013/14 by more than $7million at 30 June. He also revealed that he would be looking for an even bigger surplus next year. Archer has forecast an operating surplus for 2014/15 of a whopping $128million for the entire public sector. With the minister having achieved this year’s goal on paper, he said, CIG was also on track to meet the three year plan and be in compliance with the fiscal framework for responsibility and all the requirements of the public management and finance law by 2016. (Photo Dennie Warren JR)
The finance minister said prudent financial management was still at the centre of his budget strategy for the 2014/15 financial year. He pointed to strict controls on spending as well as enhanced debt collection and proactive debt management as the key issues.
According to the budget documents, Archer’s unaudited figures appear to be adding up so far and the surplus is being used to pay down debt, cover capital expenditures and boost government’s cash reserves as require by law.
Archer revealed that the operating surplus at the end of next month is now expected to be $108.1million rather than the forecast $100.2million. The surplus was due to more revenue than anticipated and a little less public spending than expected. Government was hoping to earn just over $845million from core revenues and from its statutory authorities and government companies but it is expected to end up taking in over $850million. Meanwhile, overall government and SAGC spending was squeezed down from an expected $549.4million to just over $547million. Government’s debt stands at just over $548.8million.
The minister explained that the revised revenue forecast was down to a combination of positive economic growth and new revenue measures approved during the 2012/13 financial year. The most significant areas of better than expected performance was on import duty which is now forecast to be some $5.1 million above original budget projections and mutual fund administrator licences which are forecast to be $4.2 million above original budget projections.
Meanwhile, the revised forecast for operating expenses was down to a series of cost reduction measures including a $3.4million savings in personnel costs because of restrained recruitment and natural attrition. There was also a $0.8 million decrease in financing expenses, due to lower interest expenses resulting from renegotiated interest rates on a portion of the debt portfolio and because government stayed out of its overdraft facility, the minister said.
However, he warned the savings were partially offset by a bigger than expected bill for overseas medical care for those who have either exceeded their health insurance cover or who don’t have insurance, which is forecast to be $ $1.3 million more.
Turning to the forth coming year Archer is aiming higher for 2014/15 and expects core government and the public authorities to bring in a combined revenue of a record breaking $872.6million almost $20million more than this year. However, as much as government is trying to cut its operating costs Archer is still predicting $744.6million will be needed to pay for operating cost and financing expenses which is more than this year’s costs of $743.9million because of the increase in staff and as a result of the statutory authorities.
Government will also be plugging the Turtle Farm’s operating losses and debt to the tune of $9.5million as well as $4.8million to Cayman Airways to cover its losses. The National Housing development trust will also receive $2.8million for its debts and another $1.5million will go to the development banks debts.
Archer announced a new sinking fund which government plans to pay in to over the next four years and it will be starting this coming financial year with a contribution of $4.3million. He said government will also bring debt down by a further $25million and not only will there be no new borrowing the CIG doesn’t require an overdraft facility for the 2014/15 financial year. He noted however, just weeks away from the start of the hurricane season, that the UK had agreed to that facility should Cayman face any natural disasters this year.
Archer also revealed that the delay in the budget was not down to government waiting on the UK as he said his final spending plan was not sent to the FCO until last Monday and the minister gave the go ahead just two days later.
Describing his budget as once again fiscally prudent he said it was not just about complying with the Framework for Fiscal Responsibility but for future of the country. He said the budget provided a healthy surplus, to fund capital expenditures, the cash reserves and reduce debt.
See the full budget in detail in documents posted below.
CS gets 2.5% one-off bonus
(CNS): Government is giving its core civil servants a one-off bonus payment to reward public sector workers for their part in meeting the targets of last year’s budget and their work towards presenting this one. The premier made the announcement during his policy statement ahead of Marco Archer’s budget address, with the details of the bonus set out in a letter sent to civil servants. Premier Alden McLaughlin said the 2.5% gratuity payment based on government workers' annual salaries will be in their pay packets next month. He said it applies only to central government workers, however, and not those working for government companies or statutory authorities, who are in charge of their own remuneration packages, or MLAs. (Photo Dennie Warren Jr)
The premier told the Legislative Assembly in his policy statement that, as with private business, government relies upon its human resources to succeed. “And like a private business would seek to do, it is important that the government’s leadership acknowledged and reward positive results.”
With government forecasting to exceed its more than $100 million surplus and personnel costs for the 2013/14 fiscal year end or less than expected government’s cash position is stronger than expected creating some room for the bonus.
“This amount, which will be payable along with the civil servant salaries at the end of June, is in recognition of the fact that the consumer price index has steadily risen and that with the help of its staff, this year the Government has the means to provide compensation in the form of this one off payment,” McLaughlin said. Thanking public sector workers for not only “meeting but exceeding targets” he implored them to keep up the good work.
“The past year’s financial performance has only been possible through shared sacrifices as many departments have had to cope with fewer resources to meet the same or increased demand for services. However, this reward proves that when our staff succeed in the challenge ‘to do more with less’ not only does the organisation succeed but its staff can share in the fruits of that success.”
He said that government still wants to re-introduce the coat of living allowance and believes it should be more than 3.2% but he said government is still challenged by personnel costs in government and in the 2014/15 budget where government will be filling some essential positions the wage bill had reached its ceiling. McLaughlin recently said personal costs “blew the budget” and in his speech Monday he said salaries would continue to present struggle for government and he said leaving post vacant was just not sustainable.
“We have to contain personnel costs in a sustainable way he said as he pointed to phase five of the rationalization process where the public sector will see, mergers, consolidation and sell offs. But McLaughlin indicated it would be local small businesses that would benefit from government services contracted out to the private sector or provide civil servants now working for government to set up their own businesses to provide those services from the private sector instead.
“Through this exercise we hope to streamline government even more and devise a road map for implementation as well as to ensure Caymanians have an opportunity to become entrepreneurs,” he added.
McLaughlin said the EY report is due next month and the implementation of the recommendations will begin this budget year and some mergers would be taking place even before the report was completed.