PROGRESSIVES CLAIM NEW UPM BUDGET IS BACK TO PACT

By Staff Writer

Notwithstanding its passage in Parliament, the 2024/25 budget of the new United People’s Movement (UPM) coalition was subjected to intense scrutiny by the main opposition People’s Progressive Movement (PPM)/Progressives.

“PACT (the UPM’s predecessor coalition) had no plans for a strong and stable economy two years ago. The new Premier’s speech suggests that she is also failing to understand the challenges we face and underestimating what is necessary to rebuild a strong economy that benefits all our people,” Progressives leader Roy McTaggart said in his assessment of the Budget Statement while crediting his party with driving growth during his period in office up to 2021, especially the peak growth period of 2019.

With the new UPM government only taking office in November, the Opposition Leader nevertheless held it accountable for low growth on the basis that the current administration is an outgrowth of the former PACT team.

“The level of economic growth under the PACT government remained modest,” he said, “while population growth has spiralled out of control” noting a 2 per cent economic growth between 2019 and 2022 compared to an 18 per cent spike in the population over the same period.

“A change in name cannot hide that,” he concluded about the economic stewardship of the then PACT administration which has morphed into the UPM following a leadership wrangle.

In challenging the UPM’s planned policies across all sectors of the economy and portfolios of the new government, Mr McTaggart repeatedly reflected on what he regarded as policy shortcomings and outright failures they presided over while being members of the previous PACT government.

“In PACT’s economy, the people feeling the benefits were those in the very top incomes. And in PACT’s economy, those people are disproportionately non-Caymanian.”

According to the Progressives/PPM leader, in 2019 there were 75 per cent more Caymanians than non-Caymanians in the top earnings bracket. But in 2023 under PACT’s watch, he said the situation is reversed.

“There are more non-Caymanians than Caymanians in that top bracket. It is staggering that the rate of increase in the number of non-Caymanian top earners means that, as of this year, there are more of them than high-earning Caymanians.”

Addressing his party’s concerns over a fall in living standards of Caymanians, Mr McTaggart however said that given that reality, “a new Premier leading a reformed government, and presenting a new budget should be given an opportunity to reset course, and get the Cayman Islands and its economy back on track while offering robust solutions to the challenges our islands and our people are facing.”

But addressing the specific policy priorities detailed by UPM Premier Julianna O’Connor-Connolly, the Opposition Leader declared: “This new UPM government has thrown fiscal responsibility out of the window” compared to the budgetary prudence of the Progressives administration in which he was Finance Minister.

A key aspect of the UPM budget was a combination of new fees, borrowings, relaxation of access to pension funds, welfare increases, and one-off payments to ease the effects of the high cost of living. This came against the backdrop of a significant depletion of the current budgetary surplus, although the government projects a turnaround across the next budget cycle 2024/25.

“New fees and charges imposed in this budget, raised CI$52 million in 2024 and then CI$80 million thereafter. In this budget alone, the burden of CI$150 million of new debt will be placed on the backs of future generations who will still be repaying it” Mr McTaggart observed.

He said this takes the new debt “incurred by this government in its various guises over its four-year term” to what he called “a genuinely staggering half a billion dollars”.

“Overnight, we have moved from a position where, under the Progressives, 100 per cent of capital expenditures were financed by recurrent revenues, to one that is almost financed by 100 per cent borrowing,” he said. The former banker also noted that commercial banks will be ‘salivating’ at the opportunity they will have to bid on providing this new financing to the government.

“Caymanians will be paying for those on the government benches for decades to come,” he declared.

The Opposition Leader and former Finance Minister said a Progressives government would have done things differently.

“There’s an alternative,” he stated. “We need to end the ‘raise it and send it’ approach. We need to stop spending on Ministers’ vanity projects. We need to come back to living within our means. To do that the country needs a clearer focus on a smaller number of priorities - things that will have the biggest impact on our people today and that will make the biggest difference in the long term.”

Mr McTaggart concluded: “Now is the time to draw a line under the past two and a half years of frustration and disappointment” - a reference to the previous PACT coalition.