Although the UK appears to have fewer concerns about the current budget situation in the Cayman Islands than last year, the government has wound up around $18.7 million short of the predicted target. Finance Minister Marco Archer confirmed this week, as he went through the supplementary appropriations, that the unaudited results for the 2012/13 fiscal year saw government end the year with a surplus of $63.3 million. While this was the biggest surplus for many years, it was still short of the projected budget surplus of $82 million, which the former premier and minister of finance, McKeeva Bush, had presented last year after a protracted battle with the UK and a flurry of new fees and increases.
Although austerity measures across the civil service resulted in a fall in the operating budget of a welcome $10 million, government collected around $30 million less than anticipated.
The fall in predicted revenue was because the relevant legislation was passed too late to generate new fees or not passed at all and because predicted sources of revenue missing thier targets. For example, the special economic zone, Cayman Enterprise City, was expected to generate millions of dollars but the revenue collected was less than $200,000.
Although the new PPM government has not yet presented its full budget for the 2013/14 year, because of the need for an interim budget it has already cleared the broad outline with the UK after the FCO confirmed that it had accepted the government’s new four year fiscal plan and the route back to compliance with the Public Management and Finance Law.
Presenting a report on the first 99 days in office on Thursday, Premier Alden McLaughlin said that government had managed to tighten its belt recently and by not using its overdraft facility over the last quarter, it had saved government those fees as well.
“Government negotiated an increased overdraft of up to $46 million for more flexibility with cash flow, with the stipulation that government could not spend more than $30 million before 31 October. One of the positive effects of achieving expenditure restraint is the fact that government has not incurred an overdraft balance during the three-month period from 1 June to 31 August, 2013. Consequently, overdraft interest has been completely avoided,” McLaughlin told legislators.
Government is expected to deliver the full budget for 2013/14 during the week starting 23 September, more than a month ahead of the expiration of the emergency budget, which the finance minister and premier have said will give MLAs time to properly scrutinize the spending plans and question civil servants without sitting in the early hours of the morning in last minute marathon sessions, as has been common over the last four years.
–CNS
