No interim revenue revealed
(CNS): As legislators debated late on Wednesday evening, no details of how government intended to fund its request for $127 million were revealed. Although the premier has stated that he needs to cut government’s core operational expenses to well below last year’s figure, there are no cuts in spending for the interim plan, which averages expense of almost $63.5 million per month. Bush did not say what government’s projected earnings would be for the next two months but has requested an overdraft facility of $25 million. If government was to continue spending at the same rate for the rest of the year it would need to cover expenses of around $760 million.
Although McKeeva Bush said the two month spending plan should not be translated as “2/12ths” of the amount that government will spend over the next fiscal year, he did not say how the expenses would be paid for or how he would then hone down the next ten months to an average monthly spending of less than $40 million to reach a balanced budget for the rest of the year.
Bush said the FCO is insisting on further reductions to the premier’s original spending target of $498 million. This means he will need to reduce operating expenses for government over the remaining ten months to an average of less than $37 million -- a task which seems almost insurmountable without major legislative changes and the cancellation of many government programmes.
Bush has turned his sights on the liquor trade for an increase in fees but it is understood he is seeking to raise around $800,000 in order to fund a hospitality school. No other new revenue raising measures have yet been revealed, nor has government shown any figures reflecting the earnings it expects to see this fiscal year from its major revenue streams, such as work permits, duty and or financial services fees.
In the stop-gap budget government appears to have opted for business as usual and has included almost ¾ of a million dollars appropriations to the Nation Building Fund and a $2 million subsidy to the Turtle Farm, among other major costs.
The premier revealed that the UK had twice rejected his proposals over the last week. The FCO declined to approve the original budget proposal, which had included some $59 million of long term borrowing as well as the government overdraft. Bush then proposed to deliver the budget without the long term borrowing and to negotiate that with UK officials separately. However, the British also declined that proposal and said the premier needed to cut spending.
The UK has offered to send an economics expert to Cayman to help government shave its spending and present a balanced budget before the end of August.
Legislators return to the LA this morning at 10am, when the premier will deliver his response to yesterday’s debate on the motion for the stop-gap spending plan and for the House to vote on the motion. Given that not a single member of the government benches has ever voted against or deliberately abstained from a motion presented by the premier, the emergency budget is likely to pass.
See government’s motion for a stop-gap budget and the premier’s accompanying speech below.
|Government Motion No. 1 of 2012-2013.pdf||347.14 KB|
|Premier's Remarks on moving motion for 2-Month Budget for 2012-13 (27 June 2012).doc||57 KB|
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