Budget quandary continues

Despite not receiving the approval of Overseas Territories Minister Henry Bellingham, Mr. Bush delivered his Budget Address, while Cayman Islands Acting Governor Franz Manderson delivered the Throne Speech. Governor Duncan Taylor, who would normally deliver the Throne Speech, was off island. 

Among the measures announced in the unapproved budget were the removal of civil servants’ 3.2 per cent cost of living allowance – effectively a pay cut to be will be implemented in lieu of the proposed imposition of health premium and pension contributions. 

Describing the preparation of this budget as the “biggest challenge” in his life, Mr. Bush accused the UK’s Foreign and Commonwealth Office of making the task harder than it should have been. “[It’s] not easy, after 40 years of having our own say in our budget, to be now told when I should move and when I should sit down.” 

He accused the FCO of repeatedly moving the goal posts as his government tried to meet requirements for the budget, about which negotiations had been continuing up until Friday, 17 August. 

The government did not deliver any of the documents that usually accompany a budget address – the budget statement, the annual plan and estimates, ownership agreements and purchase agreements – but Mr. Bush said those would be available Tuesday. 

Mr. Bush defended bringing the budget without the formal approval of Minister Bellingham, saying that since the current two-month interim budget ends on 31 August, he had to deliver the budget Monday to ensure there would be enough time in which it could be examined and debated by legislators, passed by the Finance Committee and assented to by the governor. 

Earlier Monday, Mr. Manderson released a statement saying: “The Honourable Premier intends to present the 2012/13 Budget to the Legislative Assembly today. If so, he will be doing so in the knowledge that the Minister for the Overseas Territories has not given, and may not give, his approval to these budgetary plans.” 

Mr. Bush said the FCO had wanted Cayman to have central government operating expenditures of $528 million, but his government had reached a figure of $531 million expenditure, which he said appeared to be acceptable to the FCO. 

Minister Bellingham, as of press time Tuesday afternoon, had not approved the budget delivered by the premier, but it is understood that the FCO’s economic adviser is expected to make a positive recommendation to the minister. If Mr. Bellingham does not sign off on the budget in its current form, Governor Taylor will be asked not to assent to it. 

The premier explained during his three-and-a-quarter hour speech that Mr. Bellingham was “off” and had not seen details of the budget’s final figures. “They (the FCO) did not see a problem with him accepting the $531 million of expenditure and the governor reiterated the same support,” Mr. Bush said. 

Throughout his speech, Mr. Bush repeatedly touched on public-private sector partnerships and private sector investment, which he described as being part of the “something-for-something economy” to assist recovery.  

“Our best strategy for growth is to inspire the private sector to do what it does best – create wealth and generate jobs and don’t hide those jobs from our people,” he said. 

He said instead of a forecast budget surplus of $3.6 million in the original 2011/12 budget – which ended on 30 June – the unaudited results showed $10.3 million operating deficit for the year. The total revenue budgeted for the 2011/2012 financial year was $552.7 million, while the unaudited actual results were $544 million.  

In the new budget, total operating expenses, including debt service and other costs, was $567 million. Revenues for the proposed 2012/13 budget were $649.5 million.  

Mr. Bush said government planned to invest about $23 million in statutory authorities and government-owned companies, while spending another $33 million for government projects – mainly for expenditures to complete the new John Gray High School construction project. 

The premier insisted that his government had “not in any way been deficient” in preparing the 2012/2013 budget. “It was done with the same degree of competence as previous years … what distinguished it was the level of detail requested by the FCO in the formulation this year’s budget. Every time we sent them a bundle of papers, they wanted another bundle,” he said. 

Ezzard Miller, the independent member of the Legislative Assembly from North Side, boycotted the budget address and throne speech, saying he did not want to be a party to the presentation of a budget that has not been approved.  

In a news release issued as the budget speech got under way, Mr. Miller said: “I decided not to take part in the process because this is yet another example of the premier’s continued circumvention of due process by ignoring the provisions of the PMFL (Public Management and Finance Law) and the FFR (Framework for Fiscal Responsibilty), which he signed with the FCO.” 

Mr. Miller said that it would be “futile” to object to the proceedings as the UDP party had the majority votes in parliament, but said he intended to return to the Legislative Assembly to take part in the budget debate. “Hopefully, the premier will by then have made the necessary adjustments to get FCO approval on the budget,” Mr. Miller said. 

Mr. Bush said Tuesday that Monday’s Legislative Assembly meeting was “not an illegal budget” and was entirely constitutional, despite Mr. Miller’s objections and boycott.  

“Any troublemakers will find something to quarrel about,” Mr. Bush.  

The House will resume Wednesday to debate the budget. 

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