New Strategic Policy Statement Tabled
Yesterday, in the Legislative Assembly, the Cayman Islands Government tabled the Strategic Policy Statement for 2007 – 2008 financial year. The Strategic Policy Statement indicates the policy and financial parameters to be used by the Government in order to prepare its 2007 – 2008 Budget (which ends on June 30, 2008).
According to Leader of Government Business, Mr. Tibbetts, the 1st point of the Government’s fiscal strategy is to achieve compliance with the Principles of Responsible Financial Management. The Government aims at an operating surplus and positive growth in the net worth balances. Also, cash reserves are intended to be maintained at or above required levels during this financial year. This means that at least 75 days of cash reserves in 2007 – 2008 rising to 90 days of cash in 2008 – 2009 and 2009 – 2010.
The intended Net Debt Ratio is to remain below the 80%, which is maximum permitted by law.
However, in accordance with Mr. Tibbetts, the borrowing ratio is the the key one as it measures the ability of the Government to repay public debt by means of comparing the amount of interest and principal repayments to the level of Government revenue. This ratio is predicted to rise steadily during next 3 years, reaching 9.90% in 2009 – 2010, which, however is still below the maximum permitted by law.
The Strategic Policy Statement provides for a USD 332.2 million capital development program to have advance achievement of the broad outcomes over the 2007 – 2008; 2008 – 2009 and 2009 – 2010 financial years.
In order to finance this capital program, the Government is going to use cash from both operating surpluses and borrowings. Over the next 3 years total new borrowings are planned to amount some USD 300.3 million.