UK Approves Fiscal Plan
The Foreign and Commonwealth Office has approved the Cayman Islands Government's four-year fiscal plan covering the years 2013/14 to 2016/17.
In a letter dated 22 August 2013, the United Kingdom's Minister for Overseas Territories Mark Simmonds wrote to Cayman Islands Premier Hon. Alden McLaughlin giving his approval for the plan, which the Government submitted on 15 August 2013.
The Hon. Premier welcomed the UK's approval of the Plan.
"It demonstrates the positive results that can be achieved when processes are followed and a logical, credible and consultative approach is taken toward fiscal planning," Mr. McLaughlin said.
"I am extremely pleased that we are able to put behind us the uncertainty and anxiety that has attended the budget process over the past four years. The country now has a four-year plan that provides certainty and stability to the Government's future fiscal planning and provides challenging but realistic targets," he said. "My Government can now look long-term at its plans and projects rather than having to focus on short-term, short- sighted annual plans.
"Whilst the Government has not made many public utterances about the ongoing work to develop this Plan, its culmination follows weeks of meetings between the elected Government, the Ministry of Finance and key stakeholders across the entire public sector. From those meetings, a fiscal plan was devised that is credible, sustainable and provides the necessary trajectory for us as a country to meet the fiscal targets outlined in the Public Management and Finance Law," the Hon. Premier said.
"I want to thank Finance Minister Marco Archer and his team for all of their diligent and hard work during this process," Mr. McLaughlin said.
The Plan outlined the Government's global fiscal targets for the next four budget years and the strategies that will be employed to achieve them and gain compliance with the fiscal ratios contained in the Public Management and Finance Law (2012 revision). The Plan favours an initial aggressive reduction in public sector operating expenditure, significant increases to Government's cash reserves, no new borrowings, continued repayment of existing loans and zero inflationary revenue measures.
The Plan shows the Government as the facilitator of economic growth through its support for various private sector initiatives, does not propose any major capital expansion programmes and is not dependent on any revenue measure packages or 'silver bullets' to be successful.
In his letter, Minister Simmonds said he welcomed the Government's clear commitment to fiscal planning and to achieving the key debt ratios agreed in the Framework for Fiscal Responsibility by the end of the financial year 2015/16. He further noted his approval for the top-down, multi-year approach to fiscal planning taken by the Government, which he believes will be a powerful tool for sustainable public expenditures and revenues.
Based on this level of detail planning, the UK was able to approve the Plan on its first submission, which is a testament to the hard work that was put into its development. The full details of the Plan will be provided when the Government presents the 2013/14 full year budget in late September.