Mac hopes for UK approval
(CNS): Although the UK has not yet given the Cayman government the go-ahead for the latest budget submission, the premier has called a meeting of the Legislative Assembly for Friday afternoon. McKeeva Bush, who is also the finance minister, plans to present his delayed budget statement on government spending for 2013/13 following the Throne Speech, which will be delivered by the deputy governor. However, the premier will still need to wait on the UK’s approval to pass the appropriations law, otherwise the governor will not assent to the bill. On Thursday afternoon there was still no word from the UK, which had asked on Monday evening for more cuts on the CIG’s latest budget proposal -- a request the premier refused.
Members of the Business Committee met at the Legislative Assembly on Thursday morning and the premier confirmed that he intended to present the budget on Friday afternoon.
The delivery of government’s spending plans is already almost two months overdue after Bush was forced to bring an emergency motion to the LA in June after his government was unable to put together a budget that met with the Foreign and Commonwealth’s approval. Aside from breaking its own guidelines regarding the Public Management and Finance Law, the Framework for Fiscal Responsibility that he signed with OT minister Henry Bellingham last November requires that Cayman’s budgets have UK approval.
In the last few months the government’s financial crisis has reached unprecedented heights with the premier going to the brink of implementing direct taxation on the earnings of ex-pat workers. That controversial plan was averted at the eleventh hour when the private sector, and in particular the financial services industry, offered to shoulder more fee increases on directors, hedge funds and other areas as well as increases in work permit costs.
The new package of revenue raising measures was presented to the FCO at the end of last week and the UK's economic advisor responded to the CIG verbally Monday night asking for further cuts. Public spending for 2012/13 is believed to be in the region of $580 milllion, the largest ever core government spending bill in the islands’ history. Bush plans on raising $650 million in revenue to cover the spending and produce a $70 million surplus -- some $6 million short of the target set by the UK of $76 million.
It is understood that the UK continues to exert pressure on the CIG to cut costs further as they still have concerns about the credibility of the projected revenue. Sources say that the FCO wants to ensure that Cayman does not fall into deficit in the forthcoming financial year and instead begins to get back on the track of fiscal responsibility.
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