PARLIAMENT PASSES PACT’S ‘PEOPLE-DRIVEN’ BUDGET

Calling it a budget that “delivers on many of the promises made during the campaign to invest in our people and their wellbeing”, Hon. Min. of Finance and Economic Development Chris Saunders piloted his first budget through the Cayman Islands Parliament last week.

Subjected to detailed parliamentary scrutiny and critique during the debate and Finance Committee sessions, Mr Saunders defended the PACT administration’s inaugural budget as one that is “investing in the wellbeing, resiliency, and sustainability of the Caymanian people and the Cayman Islands”.

He said: “This budget extends support to our people through investments in education, healthcare, and various social programmes, while simultaneously defending and growing our existing economic pillars of financial services and tourism to ensure their resiliency and continued success, all at the same time protecting our environment to ensure a sustainable future for all Caymanians and those that call the Cayman Islands home. Simply put Mr Speaker, this is a People-driven budget!”

Mr Saunders mentioned specifically that: “This budget delivers on many of the promises made during the campaign to invest in our people and their wellbeing. From free school lunches for our children to removing the duty on day-to-day essential items such as baby food, baby diapers and sanitary products for women.”

With expectations for a slow and gradual economic recovery over the coming period, government revenues are expected to be impacted in the process with an expectation to return to surplus starting by the end of next year.

However, Finance Minister Saunders has affirmed that no new revenue-raising measures are included in the budget.

“There are no new fees or taxes levied on the public,” he said, adding that starting next year the Government will return to full compliance with the Principles of Responsible Financial Management as prescribed by the Public Management and Finance Act, or PMFA.

An official statement said Minister Saunders underscored the Government’s commitment to lowering the cost of living and referred to the Strategic Policy Statement delivered by the PACT Government in July.

It quoted him as saying: “Broad Outcome No. 3, Mr. Speaker, in the Government’s Strategic Policy Statement is a commitment to ‘Providing solutions to improve the well-being of our people so they can achieve their full potential.’ My colleagues and I in this PACT Government take that commitment very seriously and it cannot be business as usual where many people are being taken advantage of with some of the prices being charged on essential items.”

According to the Finance Minister, “In order to meet all of the Government’s planned capital investments over the Budget period, the 2022 and 2023 Budgets show borrowings of up to $349.1 million: $299.1 million in 2022 and a further $50.0 million in 2023.

While that borrowing will cover mainly planned infrastructure projects and other capital spending, Mr Saunders made the distinction that “therefore, none of the Government’s day-to-day Operating Expenses are met by borrowings – such costs are met entirely by Government’s Operating Revenues.”

The Core Government Capital Investments are forecast to total $170.1 million in 2022, and $133.4 million in 2023.

An outline of selected allocations highlighted in a government press release shows that under the education heading $22.3 million has been allocated for the school meals programme over 2022 and 2023, and $20.1 million in local and overseas scholarships over 2022 and 2023 benefitting over 2,500 students per year.

For social programs, a total of $28.2 million over 2022 and 2023 for financial support for the most vulnerable in the community, $22.2 million in ex gratia payments to retired seamen and veterans over 2022 and 2023, and $10.3 million in 2022 for extraordinary relief stipends to displaced tourism workers.

The government has also budgeted $19 million for the National Housing Development Trust for debt servicing and to enable the Trust to build affordable homes.

Explaining the rationale behind these provisions, Mr Saunders, who is also the Deputy Premier, said: “While we cannot guarantee equal outcomes, we can guarantee equal opportunity for our people.”

Regarding its operating revenues, while no additional revenue-raising measures are included in the budget, an official statement detailed that the government is forecast to earn Operating Revenues of $940.9 million in 2022 and $978.1 million in 2023. Operating and Financing Expenses are forecast to be $921.5 million in 2022 and $950.4 million in 2023.”

The government is forecasting its Operating Surpluses by the end of next year to be $19.4 million, and $27.7 million in 2023.

It’s expecting that Cash Balances at the end of 2022 will be $404.8 million, and $312.2 million by the end of 2023.

Minister Saunders said, “The PACT Government is committed to ensuring that the Cayman Islands maintains its financial independence and ability to control its own budget.”

He explained, “Over the next two years, the PACT Government intends to continue manoeuvring through the uncertainties of the COVID-19 pandemic, while at the same time, being financially prudent in order to deliver the programmes that it promised the people of these Islands.”