Borrowing to be budget jam
Posted on Tue, 06/19/2012 - 17:39 in Politics
(CNS): Although the UK has not yet refused the Cayman Islands budget proposal for the next financial year, which was submitted to the FCO last Thursday, the request for borrowing is likely to prove a stumbling block. Last year the premier insisted that his government would not add to the country’s borrowing levels and had acknowledged that the UK would not allow the CIG to get further into debt, but the UDP administration has included a borrowing requirement in this year’s financial spending plan. Although McKeeva Bush has not disclosed the level of borrowing, he has described it as a modest amount.
The new borrowing, the premier has claimed, is to begin a solar panel installation project to help those who struggle with CUC bills, as well as cash for the new juvenile detention centre and money to complete both the high and primary school projects. While the amount of borrowing has not been disclosed, it is believed to be over $25 million since the planned solar panel project alone is estimated to be around $15 million.
In December the government delivered a strategic policy statement (SPS) entitled 'Maintaining Fiscal Discipline’ relating to its spending plans for the forthcoming budget year of 2012/13 in which the premier had predicted a surplus by the 30 June in this financial year -- a prediction that has reportedly not come to fruition and government is facing a deficit at the financial year end.
Although government says it has managed to balance the books with a small surplus, sources tell CNS that the documentation sent to London does not include capital expenditure in the operating expenses, which will push the budget into a significant deficit. With this, on top of a request for more borrowing, the UK may well ask the government to make deeper cuts. Currently the total for core government operating expense, excluding statutory authorities, is said to be over $498 million, as set out in December’s SPS, but no revenue predictions have yet been revealed.
Despite claims by Bush that his government has made great strides to improve the country’s finances, public spending is still set to increase over the next three years as the SPS made no cuts in public spending. Government is relying on projections of increased revenues to deliver surpluses but it is not clear where government hopes to increase revenue in the coming twelve months.
The UK is believed to have acknowledged receipt of the Cayman government’s budget documents, which the premier admitted were submitted late. The new Financial Framework Agreement signed between Bush and the OT minister Henry Bellingham last year requires that government send the budget to Britain three weeks ahead of when he plans to present the documents to the Legislative Assembly.
Although the premier has indicated that he hopes to arrange the Throne Speech, which is delivered by the governor, for this Friday, signalling the start of the presentation, sources tell CNS that the UK is unlikely to approve the budget without further changes, forcing the government to enact some form of emergency legislation to enable it to access the public purse past midnight on 30 June.
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Why do we need to 'borrow'?
Why do we need to 'borrow'? Why not cut salaries and other "operating" expenses like rent? How much would the CIG save then to pay for finishing the schools? During tough times tough decisions must be made. Don't worry whether you would get elected again or not, IT IS THE RIGHT THING TO DO.
And if UDP want to help poor people, reduce the fuel duty the UDP put on and help everybody out - that would help to stimulate the economy!
Instead, the money from the fuel duty was used to pay for the UDP world travelling extravaganzas and 'nation-building' freebies
If CIG spend $12m on solar
If CIG spend $12m on solar panels, Government revenue will also decrease as CUC will pay CIG less duty due to decrease in consumption of diesel at CUC.
The less electricity that is consumed on this island the less duty CIGt will receive on diesel consumed by CUC. If they want to reduce the cost of electricty to all, roll back the 25 cents duty that we pay every month to them on our electricity bills which will reduce the cost of living as the merchants should charge us less. It will be a domino affect with most items we purchase. UDP, what have you done for me lately except increase my taxes??
Why all this talk of a "Head
Why all this talk of a "Head Tax"? I believe that the government should introduce a Brain Tax. That way UDP supporters will only pay half.
.....or nothing at all. ;)
How much could we save by
Hush - why you want to cramp
Hush - why you want to cramp our politicians' style? Don't you know they have to act braggadocious to the rest of the world and pretend we got lots of money when we don't? Afterall we supposed to be one of the wealthiest islands in the Caribbean, our politicians have to travel in style and prove it, you know? No my friend, that would never do. Perish the thought.
Breaking News!!! Government
Breaking News!!! Government Budget Release
---Top Budget plans----
1.-Modest reductions to the civil service path toward balancing the budget(300 Gov. overseas contracts plus including 200 Gov. Authorities overseas employees could be final due to government trying to strike a balance.In total,about 800 goverment jobs will be eliminated over a 1 year period,with another 300 jobs through attrition and transfers over the same time frame.Job reductions and spending cuts are not nearly as drastic as reductions seen elsewhere.
The budget sets out a timeline to balance the books,projecting a 30 million surplus by dec 2012 that will turn into a 70 million surplus by june 2013.The document itself suggested the short-term pain will result in long-tern gain.
So Bush introduced a huge
So Bush introduced a huge fuel duty that jacked up the cost of petrol and CUC power, then he gave away free fuel cards to Caymanians and now he's going to give them free solar panels to reduce the CUC bills he increased and at the same time increase the value of their houses and meanwhile creating some lucrative, government paid, solar panel import and installation contracts to hand out to local businesses. Perhaps the FCO should send the sheriff of Nottingham?
Sorry please keep the Sheriff
The UK has been pro
The UK has been pro alternative energy so the concept they should not have any problem with. of course they will have issues with us borrowing anything.
An interesting point might be I understand that the homes that get the solar panels will get a significant discount on electrical bill what about the rest of us?
I am not saying we should get the same discount as the homes that carry them but does these solar panels help erveyone else as well.
Why should the UK taxpayer
Why should the UK taxpayer guarantee loans taken out by this corrupt and irresponsible country? If you want to have money to splash around on over inflated vanity projects, bring in direct taxation and pay for it yourselves.
Anon 1718 you really need to
Anon 1718 you really need to learn how this works. The UK taxpayer does NOTHING and I mean NOTHING for the Cayman Islands in this case outside of saying yes Cayman you can borrow money and pay it back yourselves. The UK nor its taxpayers pay nothing. They never have paid anything and never will.
actually they will, as if KY
actually they will, as if KY goes under the UK will have to bail them out (see TCI for a current example)
The UK taxpayer also funds the defence of the islands to prevent us becoming part of Cuba.
In return we assist in making foreign investment into the UK cheaper and thus more attractive and so help their economy, although they always forget this
Anon 0841 you and everyone
Anon 0841 you and everyone else has been waiting on that.
in terms of the defence of these islands who are you defending it against?
The Cubans have shown no interest in the Cayman Islands plus if they did the US would come running in a hurry. By the time the UK gets here only the paperwork will be left.
Other than underwrite CIG
Other than underwrite CIG borrowing, so, if CIG can't repay the money, the UK taxpayer has to, which is why he UK Govt is being heavy-handed about such commitments at this stage.
On the other hand, contrary to what many on this forum seem to believe, the UK taxpayer GAINS NOTHING from Cayman either. If anything it costs the UK a small amount to maintain its international responsibilities for the Cayman Islands, in terms of FCO staff costs and the mainenance of its nominal defence and overseas relationships responsibilities.
The solar panel funding is
The solar panel funding is not the problem. The massively overfat civil service is the problem. Mac however lacks the spine to deal with the civil service.
Actually yes this is the
Actually yes this is the problem also.
This is another SCHEME to buy votes.
HEAR ! HEAR !
Mac knows how to deal with
Mac knows how to deal with the civil service, he just gave them a raise and I wouldn't be surprised if he gave them another one before election day.
Solar panel funding may not be the problem, but it is emblematical of the problem. I take serious issue with any politician who thinks that it is OK to give $15 million over to the "friends and family plan" and ask the rest of us to pay for it.
There is an old saying that it is not a good idea to rob Peter to pay Paul, but nobody every hears Paul complaining about it.
I agree. "Solar panel funding
I agree. "Solar panel funding may not be the problem, but it is emblematical of the problem".
The problem is that this line item even exists, if you don't have the money you dont' spend money on things that aren't important. This is not an important project and certainly hasn't had an ROI done on it.
Adding solar panels to homes where people can't afford electricity is just silly. Silly because someone is going to have to pay for upkeep, silly because the homes are probably already poorly insulated, silly in every sense of the word. Oh yes, and plus there is NO MONEY.
The solar panel deal is all
The solar panel deal is all about who will supply the "approved" solar panels and equipment. Find that out and you will understand what is going on. If it were otherwise, the money could be used directly to help all poor people pay their electric bills or to lower the cost of electricity for everyone.
Is there a relationship
Is there a relationship between the solar panel supplier and the 'friend' that arranged any other sweet-heart deals with Govt?
And. When will we start the CHEC wind-fall Port Project?
Oh - one last question.- who will check the price of solar panels in China to compare what they cost in China, to what Govt will pay the supplier?
What we should focus on is
What we should focus on is whether a significant percentage of the price difference finds its way directly or indirectly into the pocket of a certain politician or the politician's buddies. Watch for a trip to an ATM in Nevada or some other place with gambling.
This solar panel project had
This solar panel project had better go out to tender and the bloody RFP had better not say "buddies with Mac" a new technology that had never been proven, or just "given" the the same guyts who "won" the CCTV contract....
Really, this needs to be a PUBLISHED and fair tender. Truly based on technology and CURRENT industry standards.
I want to see request for quote be EXACTLY what a mid sized town in the USA implemented....not bells and BS.
Mr. Auditor General, you had better become a solar panel expert BEFORE this request to quote goes out because I AM Caymanian and well versed on solar industry STANDARDS and having it be the color "orange" with a Las Vegas trip to a conference for training will not fly with me.
This quote better beat the best companies in the USA (closest neighbor with expertise and best shipping price to Cayman).....I will not stand for favourtism on this deal!!!
“When you see that in order
“When you see that in order to produce, you need to obtain permission from men who produce nothing — when you see that money is flowing to those who deal, not in goods, but in favors — when you see that men get richer by graft and by pull than by work, and your laws don’t protect you against them, but protect them against you — when you see corruption being rewarded and honesty becoming a self-sacrifice — you may know that your society is doomed.”
Well said, B.
Well said, B.
It is not needed at all. If
It is not needed at all. If you wanted to help poor people, just remove the fuel duty UDP put on two years ago.
What will you do? Hold them
What will you do? Hold them Accountable? Why now? Why this one thing? Why would anyone belive you?
The voting public sent a
The voters don wan
The voters don wan edumacation just some free gas suh! An jobs with no responsibilities. And free healthcare, an a big fat pension with a job at the end till the end. An maybe a statue of my uncle. Den we vote!
The thing has always been
The thing has always been this. Most of our issues he played an important role in creating.
Whatever problems the global crisis brought to our doorsteps his jacking up every tax he coiuld find only threw gas on the fire.
I can look at moves he has made and see where they contributed to many of our issues such as crime, unemployment, alcohol abuse and who knows what else.
So when he starts to preach about wanting to create job I wish half of the idiots praising him would realise HE IS THE ONE THAT MADE YOU LOOSE YOUR JOB TO BEGIN WITH.
To get an economy working again YOU DO NOT RAISE TAXES. You stimulate an economy by offering people and businesses an incentive to consume.
When you raise taxes you get the COMPLETLY OPPOSITE EFFECT. People start to conserve their funds and because of this businesses who are now paying more have less revenue. That generally leads to closures and you can see it around Cayman with all of the open rental places.
Anyways UDP is a mess. They can not do ANYTHING right. Can't balambec budgets or even follow due process.
You would think this
You would think this commonsense economic principle would be fully grasped by our "learned" ruling politicians, but what is commonsense to you and me, is "nunsense" to the politician(s). Ignorance and lack of proper education to do the jobs they were elected / appointed to do.
Been saying the same thing
Been saying the same thing for years, but no one seems to listen. The Pew Center did an analysis of data and released a report showing that increases in taxes had a direct correlation with a decrease in economic activity.
Also the Miller report showed graphically that revenues continued to increase year over year in Cayman even during the worst of the recent financial crisis. The problem is not a revenue problem, it is a spending problem.
If government spending was reduced 20% and taxes reduced by an amount to offset the less spending required, the economy would flourish and there would be no economic problem for Cayman. More money would be left in the provate sector to creat jobs and grow the economy and the increase in economic activity and spending would lead to more land sales, more construction, more consumption and more import duty for government. The end result is a win win situation. But there seems to be a lack of knowledge about how an economy works by people leading Cayman.
"I am no financial expert."
"I am no financial expert." -- McKeeva Bush
The property market would
The property market would also be stimulated by reducing the 7% realtor fee and stamp duty.
So true. These realtors are
So true. These realtors are like greedy vultures. Even in Jamaica agents only charge 5% commission, and they have to pay income tax there ! What is so special about agents here, why they have to charge so much! Bloody nonsense.
Reduce the realtor fee? Are
Reduce the realtor fee? Are you crazy? Stan, is that you?
"The dog ate my budget!" "The
"The dog ate my budget!"
"The budget fell out of my briefcase into a puddle and a bus ran over it."
"I put the budget down in a store when I was buying mangoes and when I looked again.....it was gone!"
"I had the budget with me and I was on my way when I was mugged."
"The budget was accidently used... in the budgie cage?"
A country that choose not to
AND TODAY'S BRITISH NEWSPAPER
AND TODAY'S BRITISH NEWSPAPER TELLS ALL:
Mr. Richard Parchment has already discussed the behind closed door deals with the PRESS before our own people?
Thanks Big Mac, now we have TAXES to fuel your un-ending GREED:
My Caymanian Grandfathers are rolling over in their graves.... read the UK Telegraph folks: TODAY's NEWSPAPER!
http://www.telegraph.co.uk/finance/financialcrisis/6248284/Bankrupt-Cayman-Islands-to-get-38m-bail-out.html
CNS: The date on this article is 30 Sep 2009
It's interesting to look back
It's interesting to look back on though. Doesn't hurt to remember where that deja vu feeling comes from.
And me soooooo glad me
And me soooooo glad me Caymanian Grandfathers are sooooo dead dat they nah noh a ting !
Have you looked at the ACTUAL
I am a Caymanian, but I
I am a Caymanian, but I believe the government should bring in HEAD TAXES both man and woman, Caymanian and expatriates alike, all over 18 years of age to pay head tax every month month by 25.00 Please Mr Premier do introduce this bill. It is needed or we cannot survive, or stop borrowing from England.
CNS Note: The CIG has never borrowed from the UK government, it merely requires approval from the FCO in order to borrow from banks or other financial institutions because the current public finances do not comply with the PMFL.
CNS, some naive people, just
CNS, some naive people, just born yesterday, think that Caymanians are so dependent on the UK that they were the ones that built this financial industry and made it one of the tops. The UK is a mere watchdog on how much we borrow - that's it!
WHAT? Who the hell do you
WHAT? Who the hell do you think guarantees your loans, Burger King and KFC?
The UK taxpayer would be liable for any loans taken out by the Cayman Islands Government that were subject to default. Does it not occur to you 'little islanders' that you are a BOT so ultimately the UK foots the bill if it all goes wrong. And that's because you have no means or capability of getting yourself out of this mess.
Actually, the UK is your landlord and your parent country, that will become all to obvious when she finally takes direct control and rids this island of the idiots that think otherwise.
To CNS Note: I say " yes you
To CNS Note: I say " yes you are correct," just a figure of speech to say borrowing from Enagland. I do really mean Borrowing from Banks with UK permission. Thanks for the correction.
To add to my previous comments, I would like to say this amount should automatically be taken from the persons pay cheque, or if the person has not paid their taxex it would show up in the system when ever you leave the Island, Cayman or expatriate and you would have to pay up to be able to leave.
Something has to be done, because we cannot continue to forwever depend on tourist and work permit fees. It cannot work any longer. Every one who lives here and appreciates living in Cayman and making a salary need to seriously consider how they can contribute.
A poll tax?! Yeah... i
A poll tax?! Yeah... i remember the poll tax riots in London in the 90's... sounds just what we need in Cayman! AWESOME suggestion...
British Rule can't come soon
British Rule can't come soon enough.
British rule won't solve this
British rule won't solve this problem... it will just replace a crude form of corruption with a more sophisticated type of corruption. Read the news... UK politicians are extremely adept at lining their pockets, padding expenses and making shady investments on their own behalf. No, my friend that isn't the answer. We work....but we can't keep up with their wastefulness. Yet we are lead to believe it is our problem when in fact governments create the problem. Their only solution then is to create taxes...for us...to solve the problem. And on and on. Have you ever noticed how much time people everywhere spend trying to STOP their elected representatives from making foolish decisions?? From acting out of stupidity and carelessness? That is where a great deal of our energies are spent. Electing them and then... trying to curtail them. Something is dreadfully wrong with that picture. Politics is/was an invention which has gone terribly wrong and has failed us. We need to correct it. It begins with personal accountability. Nothing short of that will solve this problem.
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