UK has new budget details
(CNS): Officials at the Foreign and Commonwealth Office in London have been given the details of the latest revenue raising measures that the Cayman Islands government says it now plans to use to arrive at a surplus budget. Although the premier is hoping to deliver his budget address by 20 August and begin the legislative process to pass the spending plans into law, the UK Overseas Territories Minister is now on vacation, which means approval, if it comes for the revised proposals, could be later than hoped. Once again, the clock is ticking for the UDP administration to ensure the legislation for the budget is delivered to the Legislative Assembly, debated, scrutinized by Finance Committee and passed before 31 August.
This year’s budget crisis forced government to pass a stop-gap emergency two-month budget of $127 million via a government motion, which was not subject to examination by Finance Committee. That spending plan will now need to be absorbed into the full year’s budget, which is now waiting for the nod from the UK.
Although government has said it will be looking to raise $592 million with the imposition of new revenue raising measures, such as more increases on work permits to new hedge funds fees, it has also had to reduce spending in order to produce a surplus of $70 million, which still falls $6 million short of the $76 million stipulated by the FCO. Despite this, the spending on core government is understood to exceed more than $520 million.
Although the UK may accept the slight shortfall in the surplus target, government officials have stated that the key issue is the need for revenue raising measures to be demonstrably “credible and sustainable”.
The bureaucrats in the FCO who will examine the details of the budget will be the ones to recommend to Henry Bellingham, the OT minister, whether he should or should not approve the latest submission from Cayman. They have made it clear that revenue projections must be realistic and the local government must be able to show how they have arrived at the projected revenue figures and demonstrate that the government will be able to collect what it says it can.
Speaking at two public meetings over the last few weeks, the premier has said that government has gone as far as it can in terms of cuts and he will not sanction cutting civil service jobs. As a result, he has turned to increases in revenue in order to arrive at a surplus budget.
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