HON
MINISTER FOR FINANCE’S Speaking notes on

THE SUPPLEMENTARY APPROPRIATION (JANUARY 2020 TO DECEMBER 2020) BILL, 2020

By Hon Roy McTaggart, JP, MLA

Mister
Speaker, I beg to move the Second Reading of a Bill entitled, “The
Supplementary Appropriation (January 2020 to December 2020) Bill,
2020.”

Mister
Speaker, the purpose of this Bill is to seek the Legislative
Assembly’s approval for Supplementary Expenditure, Equity
Investment, Executive Assets, Loans Made and Borrowing Appropriation
Changes in respect of the financial year ending 31st
December 2020.

Once
an Appropriation Bill has been approved by the Legislative Assembly,
it becomes an Appropriation Law for a particular financial year and
that Law establishes what is commonly referred to as the “Budget”
for that financial year.

There
are three (3) ways in which the Budget amounts contained in an
Appropriation Law can be changed during the course of a financial
year:

• 
  Firstly,
  section 11, subsection 5 of the Public Management and Finance Law
  (the “PMFL”), allows the Cabinet to make such changes;
  
• 
  Secondly,
  section 12, subsection 2 of the PMFL allows Finance Committee to
  approve changes to an established Appropriation Law; and
  
• 
  Thirdly,
  section 25 of the PMFL permits the Legislative Assembly to authorise
  changes to an already-approved Appropriation Law.
  

Mister
Speaker, this Bill arises in respect of the Government’s use of two
sections of the PMFL: section 11, subsection 5 and section 25.

Mister
Speaker, section 11, subsection 6 and section 25 of the PMFL state,
that when a Government utilises section 11, subsection 5 or section
25 of the PFML, respectively, to make changes to an Appropriation
Law, those changes made by Cabinet under Section 11 subsection 5 and
proposed changes approved by Cabinet pursuant to Section 25 of the
PMFL, are to be included in a Supplementary Appropriation Bill, which
must be presented to the Legislative Assembly.

Mister
Speaker that explains the existence of the Bill now before the House:
it satisfies a legal requirement that changes to an already approved
Appropriation Law, must be incorporated in a Supplementary
Appropriation Bill and that Bill be presented to the Legislative
Assembly for its scrutiny and approval.

Mister
Speaker, I wish to make two more additional points:

1. 
   firstly,
   the vast majority of changes set-out in the Schedule to the Bill
   have already occurred: the changes are processed shortly after they
   are approved by Cabinet under section 11, subsection 5 of the PMFL;
   and
   
2. 
   secondly,
   it is the Government’s reasonable expectation that, given the
   circumstances explaining the origin of this Supplementary
   Appropriation Bill, the Finance Committee’s consideration of the
   items in the Schedule to the Bill will be efficient.
   

Mister
Speaker, this Bill indicates changes that can be categorised as
follows:

1. 
   Items
   on the Schedule to the Bill that were approved by Cabinet for
   presentation to the Legislative Assembly and Finance Committee for
   its review, scrutiny and approval – this is being done in
   accordance with Section 25 of the PMFL; and
   
2. 
   Items
   on the Schedule to the Bill where Cabinet, as it is legally
   empowered to do under Section 11 subsection 5 of the PMFL, made
   changes to budgets during the 2020 financial period.
   

Mister
Speaker, the Government always endeavours to “match” a request
for an increase in expenditure with a corresponding reduction to
expenditures though, this is not always possible 100% of the time.

The
significant financial transactions arise mainly as a result of the
Government’s decisions taken to mitigate and supress the COVID-19
pandemic. The significant financial transactions included in the
Bill are:

1. 
   $500.0
   million to cover a $330.0 million Line of Credit that the Government
   has secured plus, the capacity is sought to borrow an additional
   $170.0 million, should this become necessary;
   
2. 
   $40.0
   million for the purchase of supplies to mitigate COVID-19, extensive
   testing for the presence of COVID-19 in the population, cost of air
   bridge flights between the UK and the Cayman Islands and other
   specific Government decisions taken in response to COVID-19;
   
   
3. 
   $23.1
   million for financial assistance to the most vulnerable, displaced
   tourism workers and non-Caymanian residents
   
4. 
   $20.9
   million for a temporary loan to the Cayman Islands Airports
   Authority;
   
5. 
   $20.1
   million for additional work on the John Gray High School campus and
   other capital works;
   
6. 
   $16.3
   million for operational support for Cayman Airways Limited;
   
7. 
   $9.5
   million for micro and small businesses relief efforts;
   
   
8. 
   $6.1
   million to increase the regulatory capacity at the Cayman Islands
   Monetary Authority;
   
9. 
   $3.0
   million for the purchase of laptops for students in public schools;
   
10. 
    $2.4
    million for the construction of the West Bay Police Station; and
    
11. 
    $1.4
    million for the establishment of the Cayman Islands Regiment.
    

Also
impacting the forecast financial statements and the Net Debt
Principle of Responsible Financial Management is the financial impact
of the Government Guaranteed Loan Scheme for Medium and Large-Sized
Businesses where the Government will guarantee or be liable for 50%,
or $100.0 million, of a maximum loan facility of $200.0 million.

The
Bill consists of 3 main parts:

1. 
   Clause
   1
   – provides the name of the proposed Law;
   
2. 
   Clause
   2
   - speaks to the Appropriation authority of the Cabinet; and
   
3. 
   The
   Schedule
   - to the Bill which shows the individual items of Appropriation
   changes that the Legislative Assembly is being asked to approve.
   

Mister
Speaker, it is also important that I point out that not all
Supplementary Appropriations involve Expenditure increases;
there are a number of decreases
to Expenditures, contained in this Bill.

I,
therefore, respectfully ask all Honourable Members to support the
Bill.

Thank
you, Mister Speaker.