In a radio address to the nation Monday evening, Premier McKeeva Bush said the decision not to sell the Office Accommodation Building will mean the government will run out of money before the end of the financial year.

“We made the decision that there will not be a divestment of the new Government Administration Building because of the ruckus by the PPM,” he said, referring to the Opposition’s protest to the sale and the planned march on the Glass House this Saturday.

 “But this decision has adverse consequences.”

Mr. Bush said that in answering a Parliamentary Question in Legislative Assembly on 3 March, his forecast that there would be an operating bank balance of $21 million at the end of the financial year was predicated on the divestment of the government administration building.  Without the sale, government will run out of money.

 “...The forecast Operating Bank Account balance... of $21 million will decline significantly and become an overdraft balance of approximately $38 million at 30th June 2010,” he said. “This materially exceeds our present overdraft limit of $15 million.”

Mr. Bush also said the decision not to divest the administration building would mean that government would need additional funds in the next financial year.

“I estimate that due to the non-divesture of certain public assets, the Government will need to borrow a minimum of CI$112 million in the upcoming financial year, July 2010 to June 2011, consisting of approximately CI$24 million to complete the new Government Administration Building, $15 million on road-works that can be linked directly to that building, and $73 million to complete the two new high schools, according to the Ministry of Works.”

Mr. Bush said the decision not to divest the administration building will cause a $97million reduction in the government’s bank balance.

“Moreover, because the Government cannot comply with all the Principles of Responsible Financial Management at 30th June 2010, the UK Government will, once again, have to give its approval for the Cayman Islands Government to incur further borrowings or something like taxation from the 1st July 2010 onwards.”

Mr. Bush warned about the consequences of further borrowing.

“We already have loans totalling half-a-billion dollars,” he said.  “We don’t know what the world conditions will be in the future.  If we continue to borrow more money and add to what we already owe, we probably would lose our triple “A” rating. A possible devaluation of our currency would be no different than have happened to other countries.   These are the detriments that we must consider when talking about more heavy borrowing.”

Bureaucracy

Premier Bush complained that many of his planned projects to help the economy were bogged down in bureaucracy.

“If we are allowed to do the government projects, people will have jobs; business will have money; government will receive additional revenues, which will reduce the need to cut civil service jobs,” he said, adding that the government needed to move quickly.

“What is stopping the government from moving ahead on these projects is nothing but pure bureaucracy.

“How are we going to help our people to get jobs and feed their families if their elected representatives can’t do their jobs because of bureaucracy?”

Mr. Bush said the sewerage system project would employ up to 1,000.  He said the cruise port would not only safeguard the cruise industry but bring additional revenues.

“The bureaucracy has taken nine months to get us to this point but we have not yet gotten to the point of starting the projects,” he said. “Not one bag of cement poured, not one hole dug, not one cement blocked laid.

“People, it is time to start work, but hurdles are constantly being put in the way.”

A plea to the private sector

Mr. Bush reiterated that government expenditures were too high and had to be cut. He again outlined his proposal to cut civil service pay, suspend their pension contributions and make them contribute half of their health insurance premiums.

“I recognize that any cut in salaries will hurt, but it is better than losing jobs,” he said. “Nevertheless, I know that any cut will hurt all concerned.”

Mr. Bush asked the private sector to help the civil service and the country.  He asked the supermarkets to give a 10 per cent reduction on their grocery prices twice a month; he asked that CUC give a 10 per cent reduction in electricity rates; he asked the Water Authority and the Water Company to give a 10 per cent reduction in water bills; he asked that banks cut interest rates; he asked that Cayman Airways give a 20 per cent reduction on needed travel.

“Everyone needs to help at this time; that is the way we can make some changes,” he said, adding that the agitation of the Opposition meetings, petition and marches “will soon enough attract more bad international press.”