It might be called a ‘coalition’ government, but the Progressives party is in firm control of the people’s House for the foreseeable future. What will it mean for Cayman?
By all accounts, the new Cayman Islands government has a big job ahead of it within the next four years.
Shrinking public sector earnings combined with stubbornly high debt have left government finances in a questionable state, while problems in the global economy and a sustained attack on offshore financial centres by onshore competitors have caused difficulty in the private sector.
The lack of a viable, modern cruise ship berthing facility has caused some cruise liners to cancel calls for 2013 into George Town port and has underscored ongoing troubles in the local economy that include a 10.5 per cent unemployment rate for Caymanians.
Questions linger over how far the local government would go in its alliance with the Dart group of companies, including the installation of a landfill in Midland Acres, which members of the incoming government have said they do not support. In addition, long-stagnant environmental protection legislation has now not been dealt with during the terms of successive governments.
And those are just a few of the issues now facing newly-chosen Premier Alden McLaughlin and his 11-person government.
McLaughlin says it’s time for all hands on deck. “The challenges we face as a nation will not be solved by opposing for oppositions sake. I’m not asking for a free pass, and my government will always accept constructive criticism,” the premier says. “As legislators, we must put the bickering and the personal attacks behind us. The issues facing this country are too serious.”
It was a sentiment expressed by the newly appointed Speaker of the House as well.
“Let us rise to the challenge and begin a new form of politics so that our children, when we leave this stage, can look at this juncture as a defining moment in time,” Speaker Juliana O’Connor-Connolly says. “Egos will be put in a little box and throw away the key and statesmen and [states]women will rise from this chamber.”
Not counting O’Connor-Connolly, who as Speaker will not get to vote in legislative matters, Premier McLaughlin will have nine party members, as well as independents Tara Rivers and Winston Connolly.
United Democratic Party leader McKeeva Bush will serve as opposition leader and joins colleagues Bernie Bush and Capt. Eugene Ebanks on the opposite side of the House.
In the “south-east” corner of the assembly floor, independent member Roy McTaggart fit in between returning incumbent independents Arden McLean and Ezzard Miller. McTaggart was named the chairman of the Legislative Assembly’s Public Accounts Committee.
The deputy speaker’s post was given to Bodden Town representative Anthony Eden.
It’s the economy
Among the government’s first priorities, McLaughlin says, will be restoring confidence in Cayman; both in the public and private sectors.
“The reordering of the world’s finances is far from complete,” the premier says. “If we are to continue to have a stake in the global financial industry, we must be prepared for further upheaval and indeed threats to the model on which our prosperity has been built.”
McLaughlin said the local financial services sector would have to “go outside our comfort zone” to continue to grow and that the government would be on hand to assist where possible.
Tourism will continue to be the second pillar of the Cayman Islands economy under the Progressives administration and an “early priority” would be the construction of a cruise berthing dock and the expansion and redevelopment of Owen Roberts International Airport, McLaughlin said.
However, equally important would be diversification of the tourism product through medical, sports and tourism, he said.
“Entities like Cayman Enterprise City and the Shetty health city will be encouraged and assisted in reaching their maximum potential in the shortest practical time,” he said.
While tourism must be expanded and diversified, Caymanians must be given a fair share of the pie, the premier said.
“A happy, safe and stable social environment is a prerequisite to a successful tourism industry,” McLaughlin said. “It is therefore in the interests of investors to ensure that Caymanians feel included in a business that showcases their country and their culture.”
Within the next few weeks, McLaughlin and Minister of Finance Marco Archer hope to travel to the United Kingdom to speak with overseas territories minister Mark Simmonds about the state of Cayman’s public sector budget.
“We must have a four-year plan agreed to by the United Kingdom government that will bring certainty to the budget process,” the premier said. “We cannot continue with a process that sees government increasing fees and taxes in every budget cycle.”
The new government will have a brief breathing space to work with before its first full-year budget comes due.
Since 2004’s Hurricane Ivan, when the general election was shifted from November to May, it has been customary practice during an election year to give the incoming government a reasonable period of time to sort things out. Cayman’s budget year now runs from 1 July of one year to 30 June of the next and, generally, the five-week period between the election and the new budget year isn’t enough time.
Financial Secretary Ken Jefferson said the incoming government has to first determine how its ministries and portfolios will be arranged and work with the deputy governor to determine who will be assigned to lead those entities.
“While the incoming government is occupied with getting itself ‘bedded-in’, before the new fiscal year starts on 1 July, 2013, the minister of finance will take a temporary budget to the Legislative Assembly for its approval of up to four months of expenditure,” Jefferson said. “It is not possible for an incoming government to effectively come into office in June 2013, present a 12-month budget for approval by the LA and get this approved before 1 July.”
After 31 October, a budget for the rest of the year must be reviewed and approved by the assembly. Any expenditures made during the first four months will be subsumed by the full 12-month budget when it is approved later in the year.
According to the most recent estimates, lawmakers will have some financial “cushion” to work with following the 22 May voting, but not quite as much as first forecast.
The Cayman Islands government is expected to fall $31 million short of its projected operating surplus in the current 2012/13 budget, according to a report issued late Wednesday.
That drop from a budgeted surplus of $82.3 million to a now-projected surplus of $51.1 million is entirely due to a decrease in expected revenues for the year.
The People’s Progressive Movement and the opposition United Democratic Party are alike in one thing – they’re pushing for major alterations of existing work permit policies in their respective political manifestos.
The United Democratic Party has advocated getting rid of the country’s term limit on foreign residents altogether. The Progressives want to keep some term limit intact, but eliminate the mechanism known as ‘key employee status’ and allow everyone who stays in Cayman for more than seven years to be allowed to apply for permanent residence.
The PPM admits economic and competitiveness concerns with regard to the continued existence of the country’s current immigration policies.
“We must strike the right balance between the understandable desire of business to operate with minimum regulatory control and the legitimate aspirations of Caymanians to be given the opportunity to participate fully in the local economy,” the Progressives manifesto states.
To accomplish this, the PPM proposes that all current work permit, permanent residence and Caymanian status applications are dealt with administratively. It seeks to eliminate the involvement of politically-appointed boards in the permit process until the appeals stage.
Also, the party seeks to create complete separation between the labour/licensing functions of the Immigration Department and the border control/enforcement section.
In order to stay in Cayman long enough to apply for permanent residence, a foreign worker who is not married to a Caymanian or who does not have some close family connection to Cayman must be given key employee status via application of their employer. The key employee designation allows the worker to stay here for up to nine years and apply for permanent residence within that time.
The PPM would do away with key employee status. So, as long as a non-Caymanian worker continues to receive a valid permit, they can apply for permanent residence after having lived in the Islands for more than seven years.
The problem, according to the PPM, is most foreign workers aren’t spending money in the local economy or becoming connected with the local community, with the prospect of having to leave in seven years.
Under the new proposed system, the PPM states: “Not everyone who applies can expect to be granted permanent residence, but everyone will have an equal chance.
The current system of only key employees being able to apply is highly discriminatory and means, in practice, that mainly professional and managerial employees get permanent residence.
“We believe in fair and equal opportunity for all.”