UK seeks $20m more in cuts
(CNS): The Cayman Islands government continues to negotiate with the UK over budget cuts just days before the premier says he will deliver his spending plan to the Legislative Assembly. Sources have confirmed that the UK gave a verbal response on Monday evening to the details submitted regarding the latest proposed revenue measures that would replace the expat tax. However, it is understood that the UK wants more cuts and has asked for a further $20 million reduction on the spending side of the balance sheet. CNS understands that the local government has said it has gone as far as it can with cuts and, given the surplus budget it intends to present, it hopes the UK will ease up.
A memo released Tuesday evening stated that the Legislative Assembly will be reconvened this Friday. If the premier delivers a budget without UK approval, the governor who is currently off island, will not assent to the bill, McKeeva Bush said.
Last week at a public meeting McKeeva Bush said he planned to come to the LA on Monday 20 August, but speaking on Radio Cayman Tuesday, he said he was hopeful the UK would give its approval, allowing him to present the full year’s budget on Friday. Bush has made no mention, however, of the request for further cuts and continued negotiations.
The latest figure that are believed to be on the table show spending plans of more than $580 million as a result of an increase of more than 10% in CINICO costs as well as some $15 million that the UK has instructed CIG to pay down on the past service pension liability. The government faces a growing burden regarding civil service pensions, which has been neglected since the UDP took office in May 2009.
Meanwhile, in order to cover the operational expenses and produce a surplus budget, revenue projections are said to be a whopping $650 million from a combination of new measures and existing fee increases.
If the UK accepts that the latest revenue raising measures are credible and realistic, the budget will produce a surplus of $70 million, which is just $6 million short of the figure the UK economist had indicated would be required to satisfy the overseas territories minister.
The decision now hangs in the balance and it will be down to the economic advisor to recommend whether or not Henry Bellingham, who is currently on vacation, should give the OK for the premier, in his role as minister of finance, to finally deliver the most controversial budget of his political career.
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