From Premier Hon. Alden McLaughlin, MBE, JP, MLA, Minister for Home Affairs, Health & Culture

Madam Speaker,

It is once again my duty and pleasure to present to this Honourable Legislature the Government’s Strategic Policy Statement for the year 2016-2017, the year of our next election.

I thank the Minister of Finance for delivering the Strategic Policy Statement, the last one of this Administration before the next general election scheduled for May 2017 and which contains good news with respect to Government finances and the economic prospects of the Country. It was a short two and a half years ago that the Minister of Finance and I stood before this Honourable House to speak to this Administration’s first Strategic Policy Statement for the financial years from 2014-
2015 through 2016-2017.

Nothing has happened since that time to cause us to deviate from our promise of “a stable future through hard work and perseverance”. If anything, we have been buoyed by the success of our policies to work even harder to sustain the stability that we promised and that the earnest labour of our team has made possible.

As I said recently at the Chamber of Commerce’s Legislative luncheon, if you stop to consider how different a place, indeed how much better a place, Cayman is today then you will begin to appreciate the importance of this stability to each and every Caymanian and to each and every business in Cayman. You will also appreciate how hard we have worked to restore confidence in Government, and in the future of

Cayman. This renewed stability and confidence can be measured in our better relationship with the UK and the improved partnership between Government and business.

Couple this with the restoration of government finances and a much-improved economy, and you get the picture of just how much has been achieved in two and a half years.

None of this occurred by chance. It occurred because this Government has a clearly defined vision and plan for Cayman. And it occurred because we set about in a disciplined way to carry out those plans.

Our first Strategic Policy Statement in November 2013 began to lay the groundwork for the success that we have had so far.

Madam Speaker as you know our first SPS used as its basis two objectives; Government’s 2013 – 2017 Medium Term Fiscal Strategy, coupled with Government’s Broad Goals and Objectives.

That strategy is a four-year financial plan that seeks to restore Cayman’s public finances to a sustainable level in a realistic manner. It set out the targets and parameters to be met annually so that Government finances would meet all the requirements of the Public Management and Finance Law by 30 June, 2016.

I am happy to remind this House and the listening public that this Government has met the agreed targets each and every year and, all things being equal, we will be fully compliant with the requirements of the law by the end of June next year and will therefore have proven our capability to assume full autonomy of the budget process.

I am especially pleased that all of this has been achieved without the need to impose any new taxes on our people or businesses and without the need for any new borrowing. Neither is any new borrowing planned over the remainder of this term. Indeed we have greatly reduced Government debt and have also reduced the fees and taxes on individuals and businesses. I will say more about this a bit later.

The second plank of the Strategic Plan was this Government’s 12 Broad Goals and Objectives. These were agreed by all members of Government over several days of examination and discussion and covered activities around strengthening the economy, developing our workforce, securing the community, reforming the public service, modernising our infrastructure, providing for a healthy populace, improving education, improving good governance, developing Cayman Brac and Little Cayman, balancing environmental protection with development needs, improving agricultural production and working toward a more just society.

Our strategy provided the broad parameters around which government could spend on capital investment and on operating expenditure, while simultaneously reducing debt and building cash reserves. To complement this, the Broad Goals provided the

priorities on which Government would spend and invest. In other words, Madam Speaker, this Government did what most households do – consider your income, identify your priorities and spend accordingly; including paying down loans and putting something aside for a rainy day.

I beg your indulgence, Madam Speaker, to highlight a few of the priority items of two and a half years ago and to note their status today:

• Improving tourism cruise and stay over numbers – DONE;

• Implement the George Town revitalisation project with Phase 1 focussing on improving road corridors – STARTED;

• Supporting small business by reducing taxes and assisting entrepreneurs – DONE;

• Support responsible larger scale developments, including those using local investment – STARTED;

• Review the PMFL and make required changes and introduce multi-year budgeting

– STARTED;

• Improvements at the airport and cruise and cargo ports – STARTED;

• Create a solution for the George Town Landfill – STARTED;

• Review and improve the education system – STARTED;

• Introduce Daylight Savings Time – STARTED;

• Approve amendments to the Trade and Business Licensing Law – DONE;

• Approve a Builders Law – DONE;

• Approve a National Conservation Law – DONE;

• And approve a new Liquor Licensing Law – DONE.

Honourable Members will quickly realise that all of the aforementioned – and much more – has either been accomplished or is under way and will be completed over the remainder of this term or within the next three years, should God and the good people of the Cayman Islands see fit to return this Government to lead the Country following the General Election in 2017..

As I keep saying Madam Speaker, this is a Government that gets things done!

And I say again – this did not happen by chance. It has happened because we created a sensible, achievable multi-year strategic plan as a guide. Each year we carefully prioritised both capital and operating expenditure, and importantly – we were disciplined in carrying out our plans.

So today we have an economy that is stronger; an economy where business confidence has been restored. And an economy where private sector investment is growing and is set to grow further, with major private initiatives such as the Kimpton Seafire Hotel, which opens in November 2016 with 266 rooms and seven redevelopment of the old Hyatt site; redevelopment of Treasure Island into Margaritaville Beach Resort; and St. James Point, a new $200 million hotel and resort at Beach Bay – among others – close to completion or in the works.

Indeed, there are several new developments of varying sizes in the planning stages or under construction along the Seven Mile corridor, South Sound, out to the Eastern Districts and over in Cayman Brac. Developers, from small to large, have seen the improvement in the economy and are preparing for an increased demand as condos sell and tourist arrivals increase. These all provide jobs and further enhance the economy as well as generate good revenues for government.

Add to these plans to expand Health City, Cayman Enterprise City, and promising developments around intellectual property, strong financial services and increased tourism numbers, and there is no doubt that Cayman has a good mix of solid economic drivers for growth over the next three to five years.

Our tourism arrivals are at record highs because of the work that we have done. Last year Cayman welcomed 382,816 air arrival visitors. So far this year, through the end of September, we have had 295,469 air arrival tourists.

Our goal is to grow the visitor air arrival numbers past the 400,000 volume level over the next two years. We anticipate 387,566 air arrivals by the end of this calendar year and 411,192 by the end of 2016. This is achievable given the number of new hotels coming on line.

Speaking of increases, Madam Speaker, from June 2013 through the first few days of this month, 3,109 new trade and business licenses have been granted. This is a result of renewed confidence in the Cayman economy coupled with reductions of fees to small businesses made by this Government to encourage entrepreneurship. This has provided opportunities for Caymanians to own their own businesses and has meant jobs for our people.

To further help small businesses, earlier this month the Cayman Islands Development Bank began offering a loan programme tailored for those who own small and medium sized enterprises with proven track records for at least two years. The programme has been structured in such a way as to maximise the assistance we can give while not imperilling the bank’s financial stability through bad decision making, as has been the case under previous administrations.

This loan programme enhances Government’s already strong initiatives. For business owners these initiatives include reductions in licensing fees, duty costs and the benefit of CUC duty reductions, among others.

Private sector investment and growth, coupled with Government’s own infrastructure developments, will help grow our Gross Domestic Product by a projected 1.7 per cent in 2016. And GDP growth is expected to continue to rise annually over the medium term, closing out 2019 with a projected increase of 2.5 per cent. These are healthy and stable rates of growth. Importantly, they are sensible targeted rates of growth that avoid rapid, unplanned economic expansion that could outpace the ability of the country to effectively keep up. So the economy has grown well over the last two years and is expected to grow further in a sustainable fashion.

With this growth hundreds of private sector jobs have been created and overall unemployment has fallen from 6.3 per cent in 2013 to 4.7 per cent as of December 2014, rising slightly during the off-season to 5.6 per cent in September 2015. There is, though, the sore spot in the otherwise remarkable recovery of our economy. While overall employment has fallen the unemployment of Caymanians has increased marginally from 7.9 per cent to 8.3 per cent over the period from October
2014 to April 2015. While this increase may perhaps be explained by the seasonality factor, the reality is that Caymanian unemployment numbers are headed in the wrong direction. We are working with the Chamber of Commerce and the private sector to get more of our people employed and get those unemployment numbers once again going in the right direction. I believe that together Government and business can solve this challenge. But let there be no misunderstanding, while we will continue to work with businesses to help grow the economy and create jobs, this Government will not sit back and accept that Caymanians who are willing and capable of working are being passed over. We recognize and value the contributions of all who work to help us build this economy, but with almost 22,000 work permits on record, it must be possible for businesses to hire more

Caymanians.

The good news, Madam Speaker, is that we believe that by working with the private sector we can improve those numbers as projected job growth should see the unemployment rate reach a low of 4.5 per cent by 2019.

Besides unemployment for Caymanians there are other challenges we have faced with one of the most recent examples being the concern that money transfer agencies no longer had access to Cayman banks. Just a short couple of hours ago we held a press conference with GraceKennedy Money Services to announce that Western Union has reopened for business in the Cayman Islands. Once again it is possible for people to pay for overseas remittances in Cayman Islands dollars and they no longer need to scramble around to get US dollars to send overseas.

The reasons for this glitch in the money transfer business were complex, but essentially revolved around the risks perceived by overseas regulators concerned that terrorists were looking to fund their illegal efforts using money transfer companies. Those same regulators were also concerned that money transfer companies may also unknowingly be used to launder money. I don’t need to go into all of the details here, but the short of it is that the issue was hurting many people in our community and their families overseas who rely on remittances. Indeed, many people were anxious about the upcoming Christmas season and the limited ability to make those remittances. I congratulate the Minister of Financial Service and his team for working with GraceKennedy to come up with a viable solution and to the Foster family for accommodating Western Union.

The issue was also damaging what this Government has established as an improving economy that has provided stable Government revenues and I am immensely pleased that it has been resolved. Government’s strong revenue stream coupled with firm control over expenditure, has delivered, and will continue to deliver solid surpluses; surpluses that are used to rebuild cash reserves to pay down debt, and to invest in our country and our people. And so, Madam Speaker, cash reserves are projected to rise from about $173.9 million dollars at year end
2014 to an expected $340 million dollars at the end of this financial year. Meanwhile, core government debt has been reduced from about $548.5 million dollars to $503.3 million dollars over this same period.

And as the Minister of Finance has noted we are expected to be in a position to repay the US$312 million bullet bond when it comes due in November 2019. This will mean that by the end of the financial year 2019 core Government debt will be reduced to $193.6 million dollars.

In short, Madam Speaker, the Cayman Islands economy is in safe hands with the

Progressives-led Government.

Allow me to run through several of the fiscal successes that we have achieved:

• Government’s financial performance exceeded budget expectations for both Fiscal

Years 2013-2014 and 2014-1025 and will continue to do so over the next three years as demonstrated in this new SPS;

• Annual accounts of Government agencies for 2014-2015 were prepared and submitted to the Auditor General for examination within the legal deadline – and we will continue to make improvements as we go forward;

• The 2013-2014 audit opinions resulted in no ministry, portfolio or office receiving disclaimers or adverse opinions;

• Financial results for Statutory Authorities and Government-owned companies for

2014-2015 are significantly better than budgeted;

• Continued repayment of public sector debt is planned;

• And compliance with all borrowing and cash reserve ratios will be met in 2015-

2016 and beyond with the exception of 2019 when the bullet bond is repaid.

We promised the country to restore government finances and we are fulfilling this promise. We are, Madam Speaker, a Government that gets things done.

Our ‘To Do List’ shows that work on the initial phase of expansion to the terminal building at Owen Roberts International Airport is well under way and will continue with the next phase starting in January with a completed date in the first half of 2018. With the expansion and improvements Government continues to provide

opportunities for Caymanian businesses to participate in the project hence creating employment for Caymanians. These jobs will be needed during the construction phase and into the future as more workers will be required at the airport and at the stores, restaurants and other businesses that support the airport and the travelling public.

As I am sure you are aware, Madam Speaker, over on Cayman Brac we made significant improvements to the Charles Kirkconnell International Airport enabling that airport to handle international flights. The first flights began this past weekend from Cayman Brac to Miami and in just a few days on, 28 November, Cayman Airways will fly from the Brac directly to Holguin in eastern Cuba. Because of the improvements made to the airport under our watch, Cayman Brac has seen a 20 per cent increase in arrivals from a year ago. That means an increase in visitors, which is helping to bolster the economy on the Sister Islands. An increase that has spurred the Brac Reef Hotel to invest in upgrades to the property to cater to the increasing visitor interest in Cayman Brac. The improvements at the airport have provided 21 more jobs for firefighters, immigration and customs officers and at the Cayman Airways call centre and airport ramp. This is not only a starting point to trigger more jobs, but it is an investment in our people and the future of the Brac.

Madam Speaker, we took office with the promise that we would fix the George Town landfill and provide a solution for the long term processing of our refuse. We knew the task was complex and there was no magic bullet to be found – but we promptly

started down the road to come up with a holistic and sustainable solution to managing the Country’s solid waste. I am happy to say that now through the end of this month, the draft National Solid Waste Management Strategy is in the public domain for discussion. Once we get feedback from the public, the Strategy will be finalised and an Outline Business Case developed on the best options for the successful implementation of an Integrated Solid Waste Management System for the Country. As the timeline is now set we could be looking at work starting on the landfill in 2017. As I have said in this House before, the process may appear slow, but it is sure.

As I have also said previously, whatever options are presented by the experts to solve our landfill needs, we know that recycling and composting must be part of the solution. In order to jump-start this aspect, Government has already begun to encourage more recycling and composting to further help improve waste management throughout the Islands. Those of you who are already taking your recyclables to the various bins around the Islands, I thank you. You are doing your part – but in the New Year recycling efforts will be further ramped up with new recycling stations added and private sector companies being contracted to collect items for recycling.

Madam Speaker another major infrastructure project this Government had the will to take on was that of cruise ship berthing. When the people of the Cayman Islands elected us, they did so giving us a clear mandate to deliver on our campaign

pledges, one of which was to build a cruise berthing facility in George Town Harbour to help ensure the country’s continued economic success. We are doing things differently than previous administrations, which cost the Country millions of dollars for breach of contract because of an unwillingness by the-then Government to follow the rules. I believe in all sincerity that the country has never before had a Government such as ours that is this open with its projects and willing to accept challenges and consider options where practical. But that is expected of us as a progressive government. Openness and transparency – coupled with accountability – has always been our modus operandi.

I must reiterate Madam Speaker that the Cabinet has not yet made a final decision on this all-important project, but we will not be intimidated by special interest groups or individuals at the expense of the greater national good. It is said that the finest steel must go through the hottest fire and we pledge to make a responsible decision that takes into account all of the factors.

There are hundreds of local jobs that cater to and depend upon cruise tourism. It is our duty to ensure those jobs are kept intact, maintained and expanded on into the future. These jobs include Caymanian tour and taxi operators, employees of George Town merchants and restaurants, and employees of businesses of all sizes across Grand Cayman that cater to and benefit directly and indirectly from cruise tourism.

The Outline Business Case estimates that about 500 jobs will be made available during construction of the cruise and cargo facility. This will mean real, tangible opportunities for Caymanian businesses, professionals and trades people to be involved in this historic and economically important project. The large nature of the project is such that local businesses will also benefit through an increase in sales and revenues.

Once the cruise berthing facility is up and running, the increased economic impact is expected to continue, adding about $245 million to our Gross Domestic Product as well as employment for about 1,000 people over the next 20 years, assuming at least a 1 per cent growth in cruise visitors. Net benefits increase to a potential $1.2 billion if cruise visitors grow by at least 3 per cent per annum. At the end of construction, the port would have been built mainly by Caymanians for Caymanians and will be owned by the people of the Cayman Islands.

Insofar as local labour is not available, there will be a need for guest workers who will also contribute to the economy for the time they are in Cayman. They will need places to rent and they will buy goods and services from local businesses.

Hand-in-hand with the development of a cruise berthing facility is the revitalisation of George Town. Plans are under way to improve the green spaces in George Town, including a new seaside park area in South Sound and a park in the vicinity of the
old Glass House. I have seen the initial architectural renderings for the South

Sound park and it looks impressive. The adjoining landowners have all agreed to back the plans and I look forward to seeing the public make use of the park. The old Glass House should be demolished early in the New Year and a local business has generously committed to completing the new park at its cost. Both are expected to be completed next year.

Phase One of the George Town revitalisation project has started with major upgrades to Godfrey Nixon Way and Smith Road already completed. Humber Lane will soon be joined to Smith Road, connecting Smith Road to Elgin Avenue, and Elgin will later be connected to Eastern Avenue via a new road – all of which will take traffic congestion out of the town centre and allow for some roads to be pedestrianized or made one way to improve traffic flows. Other road works involve improvements to Linford Pierson Highway, giving it four lanes, widening of Thomas Russell Way and improvements to Edward and Fort streets.

The public, particularly the business sector, now has an opportunity to provide their input on how to best improve the town centre once the roads have been completed. Once plans begin to take shape it is anticipated that what comes forward will provide true economic and social renewal for George Town. This includes the introduction of mixed-use buildings in the town centre to encourage people to again make their home there and bring back life to George Town in the evenings and on weekends. The revitalisation of George Town will help bring businesses, jobs and
added opportunities back to our capital.

Madam Speaker, it also gives us an opportunity to spread the economic opportunities beyond Cardinall Avenue and North and South Church Street and into the capital’s historic neighbourhoods. Some have noted that the revitalisation efforts could be seen as the gentrifying of parts of George Town. This is certainly not the case. Revitalisation is just that – a chance for renewal and a rebirth. The planned new roads will improve more than traffic congestion – they will also improve land values and property owners will have opportunities to develop or to sell their properties if they wish. Revitalising George Town is about benefiting the entire town
– everyone who lives in George Town, does business in George Town or owns property in George Town – not just a select few. Without initiatives like this, George Town’s business centre and its historic neighbourhoods will severely decline in the coming decade. Madam Speaker, we cannot allow this to happen under our watch.

So, Madam Speaker, we have worked extremely hard at providing an environment where business can flourish and where Caymanians can have opportunities. Caymanians understand well that we cannot build this country alone and so we welcome those who come to help us work and build. But, as I have said many times, as we build Cayman and create opportunities for others to join us, it must be
understood that Caymanians will not be left behind. Caymanians must have access to the opportunities that arise from the work that Government does. And in fact many of our people have benefitted from these opportunities over the years.

Let me assure this Honourable Legislature and the public at large that every major new development that starts up in Cayman, especially if they receive concessions from this Government to ensure the project starts, are advised that Caymanians must be employed during the construction phase as well as afterwards. Additionally, concessions granted are done with a requirement that construction starts within a reasonable time or the offer expires.

Madam Speaker, it has been said that a rising tide lifts all boats, but a rising tide will not lift people who cannot get on-board the boat. So as our economic tide once again rises it is important that Caymanians have opportunities for education, training, re-tooling, and a chance to show what they can do. We in Government will do our part but the private sector must help as well.

We have had discussions with the Chamber of Commerce and with larger businesses in the hospitality and banking industries, and we will continue those discussions to ensure that the opportunities that abound in Cayman continue to be spread to all that live and work here. The conversations have been fruitful thus far and we look forward to continued cooperation and partnership with the private sector in this regard.

We all recognise that there has been a structural shift in our two pillar industries since the 2008 great recession and we cannot ignore that reality. Financial services business is growing but there has also been consolidations and some financial services businesses have decided that operations need to be leaner – and so some jobs in banking, for example, are fewer than they used to be.

We are seeing what are undoubtedly phenomenal growth opportunities in the hospitality industry with several new hotels, resorts and restaurants under way or being planned. The Kimpton Seafire alone is expected to need some 400 employees when completed. This is why we started the Hospitality School last year and are trying hard to grow the trainee student numbers this year and every year going forward. Every young person who graduated from the Hospitality School was able to find employment in good paying jobs at a hospitality employer of their choosing. We have a number of Caymanians now training in a variety of hospitality roles overseas – the opportunities abound in a whole range of roles in hospitality – and the overall salary package and benefits are also good.

Caymanians need to once again look at the good jobs in hospitality as being good jobs for Caymanians. The hospitality businesses that we have spoken with have indicated that they will continue to work with Government to not only encourage Caymanians to enter this industry but to also seek them out and to continue to provide opportunities for training and advancement. Our efforts will be redoubled in the coming years and given our track record I have no doubt we will be successful.

The hospitality training school model is proof that this partnership can pay dividends and we thank the businesses that worked to help ensure the success we have had

so far. As a consequence of this success, a cross ministerial effort is now under way to see how else we can use the hospitality school model and to work with private sector, including the Chamber of Commerce, to develop various work programmes that provide skills and educational opportunities to Caymanians that can lead to real job opportunities.

But we also know Madam Speaker, that there are some Caymanians who may need a bit more assistance than others and we will be looking over the short and medium term to see how best to move them to employment. In the short term this will include what we are terming the Caymankind work programme where individuals will be provided an opportunity for temporary employment with Department of Environmental Health and the Recreation, Parks and Cemetery Unit to assist with an Island-wide clean-up programme. This will provide some relief for as many as we can afford over the Christmas season and will mean a better Christmas for many families.

I am sure that we will see more comments from some that this is a waste of money – well that is one point of view. But in my opinion it comes mainly from those who do not know the meaning of need, of not having the means to put food on the table let alone buy their children a gift for Christmas. This programme will not be operated like others in the past.

It will also allow us to get more people registered with the National Workforce Development Agency, and to get them into programmes that can assist with longer term employment. This is not a handout Madam Speaker, but a hand up for some individuals to get back into employment for a short period and to then hopefully start on their way to full time work.

Caymanians desire nothing more than to work, to provide for their families and to have an opportunity to build a career. Therefore, we are re-focussing our efforts on preparing our people to join the workforce.

A technical and vocational education and training coordinator has been appointed and will take up his position in the National Workforce Development Agency in January next year. He will provide planning and implementation of programme activities that support a national TVET agenda. He will also provide on-the-ground support to help job seekers receive the training they need.

The Ministry of Education is exploring and collaborating with the private sector to develop and deliver community based apprenticeships and work-experience internships. The Ministry also plans apprenticeships within the Public Works Department.

The recent work of the Inter-Ministerial Committee on Employment provides insight into the various barriers to employment, from lack of transportation to a criminal

record. We are now actively working across the Ministries and with the private sector to mitigate those barriers and move people from welfare to meaningful work.

Another pledge we made was to reduce the cost of living for our people and residents alike. This is something near and dear to us all. Our people have no other place to call home. So while many boast of our high per-capita GDP, we also know that not all of us fall on the right side of the income curve. Therefore if the cost of living is not reined in, our people will not enjoy the fruits of their labour, save for their future, invest, or spend to support the wider local economy.

Our first commitment to address the cost of living was to introduce no new revenue measures. We recognised that we could not effectively tax the country out of a sluggish economy and to date we have stuck to this pledge. Government has done its part not to increase the burden, but we are now shifting our attention to where our people truly feel pain … at the pump! This, Madam Speaker, as has been explained by good friend and colleague, the Hon. Minister of Infrastructure, has the ability to impact so many areas in our economy.

Madam Speaker, since coming to office, we have been concerned that the prices at the gasoline pumps do not generally fall in line with changes in refined fuel prices on the global market. The Minister of Infrastructure has already advised that he is seeking a third fuel provider to help drive competition and thereby lower fuel prices. He has also been challenging Cayman’s two main fuel suppliers to provide

information on the cost elements, which determine the prices at which they sell fuel to the local gas stations, as prices at the pump appear to us to be too high. Additionally he set about looking at a legislative and regulatory framework that would assist with ensuring that prices for refined fuel sold locally are fair.

We are confident that all three Cayman Islands can have optimum fuel prices while allowing the petrol companies a fair – and not excessive – return on their investments. But to be able to do so practically, and to be able to seek legal remedy, Government must be in a position to know the exact cost, not an estimate, for which fuel is acquired and marketed by the fuel importers.

To this end, we tabled in the Legislative Assembly changes to the Dangerous Substances Handling and Storage Law so that fuel importers are mandated to provide Government with the actual cost of the fuel they import or risk paying a fine of $250,000. These changes have been passed into law, and as we have seen, the prices are now coming down – even before the law has come into force. Perhaps they are seeing the light Madam Speaker?

To further reduce the cost of living, this past January Government reduced the duty Caribbean Utilities Company pays on diesel by 25-cents per gallon. The savings from this is now reflected on our electricity bills. There will be an additional 25-cents per gallon reduction next January, moving us from a high of 75-cents per gallon to

just 25-cents per gallon by January 2016 under this Progressives-led

Administration.

This reduction means a cost savings to all who use electricity in our homes and businesses and equates to $8.4 million dollars annually left in the pockets of CUC electricity consumers. So you see how focusing on fuel alone can have an impact?
It is our hope that as fuel prices fall, as they should, the net impact will be felt across other areas in our economy, putting even more money back into the pockets of our citizens.

The cost of living has also been kept in check by Government reducing the import duty on most consumable goods from 22 per cent to 20 per cent – providing a savings to consumers of at least $4 million dollars annually.

All of that is proof-positive that this Progressives-led Administration gets things done.

Madam Speaker, at this year’s Fidelity Cayman Economic Outlook in February I also announced that the negotiations with Dart for the sale of the freehold of the Dragon Bay lands had begun and we were negotiating for fair market value. Dart currently holds the leasehold of this property under a 99-year lease, which has a balance of about 75 years to run. I’m pleased to announce today negotiations have been successfully concluded, and once the matter is finalised in accordance with

the requirements of the Governor (Vesting of Lands) Law, the details of the sale will be brought to this House for final approval.

The valuations required under the Governor (Vesting of Lands) Law came in at $16 million on the high side and $12 million on the low end of the spectrum. The Department of Lands and Survey successfully negotiated for a price of US$14.57 million for the sale of the freehold of the property. Dart has committed to developing the property and Government will make revenue from property sales and development as a result.

As part of the deal, which was negotiated as part of the third Amendment to the

NRA Agreement, Dart has also agreed to extend the Esterley Tibbetts Highway and make more improvements to our road infrastructure. Dart will build an additional two lanes of roadway from the Century 21 Roundabout to the Butterfield Roundabout near AL Thompson’s. This will include a new roundabout in the vicinity of the Lakeside Apartments on Esterley Tibbetts Highway, which will ultimately accommodate the Airport Connector Road. While Dart will fund the road works between the Century 21 Roundabout to and including the roundabout near Lakeside, Government has agreed to fund the extension south of the new roundabout to the Butterfield Roundabout. Dart and the National Roads Authority are currently working out the details of these much-needed road improvements.

Confidence in Cayman was evident again this past September when Government inked a deal for the construction of St. James Point, a $200 million dollar hotel and condominium project to be built in the Bodden Town District at Beach Bay. We have signed a deal with the developer that takes into account the expected large contribution to the economy and have given some duty concessions on imports of materials along with other new hotel properties. Details of this were made public some months ago. This will be returned to the Government and the people of the Cayman Islands in spades when the hotel and condos are up and running and tourists are spending and enjoying the offerings of the eastern districts. It will mean money spent in the Cayman economy, jobs during the construction phase and good jobs for Caymanians after construction. On completion, the St. James Point project will assist tourism numbers and benefit the economy.

In addition, greater demand for the services of Health City could bolster stable growth for tourism services. Indirectly, these are seen to generate economic expansion in other areas, particularly wholesale and retail, transportation and the utility sectors.

One of our top and toughest jobs when we took office was to restore investor confidence in Cayman. Our success is proven in the number of private sector projects in the pipeline. We have kept our promises. We get things done.

Madam Speaker as our business community reaffirms its commitment to hire and train Caymanians, this Progressives-led Administration understands all too well our obligation to provide well educated and work ready Caymanian employees.

Education has been and continues to be a major priority of this Administration. School reports have shown improvements, but they also show we are falling short. We are working with educators to ensure that standards continue to improve and that they are more result oriented. Government is committed to education. We are spending the money and we expect results.

Madam Speaker, the previous PPM Government laid the foundation for the transformation of our education system into a world-class structure. This year amendments will be made to the Education Modernisation Law 2009, which was never brought in to force. The revised law will, among other things, establish the starting of school age as 5 years at the beginning of Year 1, empower the Minister of Education to establish a national curriculum in government schools, establish an Office of Education Quality Assurance, require all schools to have a written Student Behaviour and Discipline Policy and make it an offence to create a disturbance on school premises.

Our focus is on long-term economic growth and developing the skills of our people for that future economy.

We know that if our people can’t find gainful means of employment, crime could increase. That could harm our reputation on the global stage, give would-be visitors pause to consider another destination and, more importantly, bring harm to our people. While the elected Government does not have constitutional responsibility for the Royal Cayman Islands Police Service, we do control its budget. To that end, we will continue to ensure police powers and resources are proportionate and effective to detect and reduce crime.

There are things, however, that we can do, and have done, legislatively to address crime. Under this Administration this House approved the Second Hand Dealers Law to protect the public from unwittingly purchasing stolen goods from licensed second hand dealers and better regulate pawn shops and metal dealers to track who has sold what to them, helping prevent them being used as dumping grounds for stolen items. It is also an additional law enforcement tool.

We successfully passed the Conditional Release Law, which will have a major impact on re-offending rates. The objective is to help rehabilitate prisoners to function in society and live useful lives, to protect society from the criminal acts of repeat offenders and to reduce costs of incarceration.

Part of that rehabilitation includes allowing some offenders in the prison system to take part in projects that aim to assist the community and allow prisoners to pay back to society. To date projects undertaken have included painting of the George Town Fire Station, refurbishing three houses and assisting on restoration work at the Botanical Gardens.

I can also report, Madam Speaker, that Government recently hired seven new prison officers.

While I am on the subject of our prisons, I must express my dismay at the fact that some of the people being incarcerated should not even be there. I am speaking about our people with mental illness.

That is why we have developed a Strategic Outline Case for a new long-term residential mental health facility.

It is time we took care of those among us who are most vulnerable. Mental illness is not a crime, but more often than not those with mental illness find themselves housed in our prisons because we just don’t have enough bed space at the hospital.

Despite this, it is at the hospital and Health Services Authority that we are making great strides, giving that Authority a sense of direction and purpose. Under the past administration the HSA had no long-term or short-term plans to effectively provide high quality, cost efficient healthcare.

We have not forgotten the dream of home ownership that many Caymanians struggle and strive to achieve. Therefore we are making it easier to buy a home for qualified Caymanians. Last month we restarted the Government Guaranteed Home Assisted Mortgage programme, which backs first-time Caymanian homeowners by guaranteeing 35 per cent of the deposit. It allows buyers to borrow up to the full cost of the home without making a deposit. This approach opens the door for many to home ownership and is a hand up, not a hand out.

Madam Speaker, this Administration has also done much to modernise our legislative framework. Members of this House and the public will recall that we passed a Motion moving us to One Person One Vote and Single Member Electoral Districts in time for the elections in 2017. The order made by the Governor establishing 19 single member electoral districts was gazetted today. At the last meeting of this House we also passed a Motion to start the process of making this Honourable Assembly autonomous, putting responsibility with the Honourable Speaker and the Clerk and we also agreed to have the Standing Orders of this House modernised. These comprised an overall package that I think is so critical in moving the Cayman Islands into the modern era of democracy with an advanced constitution, a modern parliament and an equitable electoral system.

Madam Speaker, I have highlighted only a sampling of the ways this Progressives- led Administration has tirelessly worked to demonstrate in a tangible way that the Cayman Islands is in much better shape than the way we found it when we took office in 2013.

We have kept our promises. We get things done. We have delivered on our manifesto promises of education improvements, introducing a minimum wage, delivering on electoral reform, working with and encouraging business and improving employment.

But, Madam Speaker, we are not finished.

As you will recall, in September 2014 Government received a report from Ernst Young that made more than 80 recommendations for Government reform. The report was clear that it only gave advice and analysis to support Government’s consideration as to future action.

Government considered the recommendations and used the report as a key input in our decision making. In so doing, Government recognised that the EY report was only one source of potential projects and other ideas for reform should also be considered. So, for the past year or so, the detailed work necessary to develop and analyse candidate projects has been undertaken.

We have kept our promises. We get things done.

Madam Speaker, I believe we have a duty to take a long-term view and to put in place the delivery of the reforms this country needs. If we remain bound to electoral cycles we remain bound to short term action that will not tackle some of the fundamental issues we face. Our country needs more than that. Our country deserves more than that. And that is why this Government is setting out a clear plan of future action.

We have excluded some of the EY recommendations because they clearly conflict with our policy – for example recommendations to raise fees would clearly run counter to the commitment this Administration has given the country to seek to cut rather than raise duties and fees. Alternatively, we have excluded recommendations because the further analysis we have done indicates the benefits are insufficient to justify taking the ideas forward.

As I said earlier, Madam Speaker, Phase One of Project Future includes projects already in flight and I’ve already updated the House on the Owen Roberts International Airport, cruise berthing facilities and a new sustainable waste strategy for the Cayman Islands.

We can chalk off one recommendation in Phase One as complete: The EY recommendation to move the London Office to the Portfolio of the Cabinet Office was implemented in July. While it is by no means the most fundamental of reforms, it does show our willingness to get on with things even as we finalise the full programme. Again, Madam Speaker, we have kept our promises.

For example we continue to make progress in the following projects:

• Work to develop the business cases for the creation of a new Office of the Ombudsman and a new Public Utilities Commission is nearing completion and, if approved, both will move swiftly through to implementation.

• Every parcel of surplus Government land has been reviewed and an initial portfolio for sale has been created. Cabinet has already given approval for the sale of the first of those pieces of land.

• The communications project was kick started with a Capability Review conducted by the UK’s Government Communications Service earlier this year. The next step is the presentation of the Communications Capability Review and its recommendations to Cabinet.

• We are progressing work on the business case for the potential merger of primary schools on Cayman Brac, either on one of the existing sites or a completely new site on the Bluff.

• The Portfolio of the Civil Service and the Public Service Pensions Board launched employee consultations on the proposed changes to the Public Service Management Law and the Public Service Pensions Law to facilitate raising the normal retirement age from 60 to 65. The forecast implementation date for the new retirement age is April 2016.

Another project we hope to complete in the SPS period is a review of the Cayman Islands National Insurance Company or CINICO.

CINICO provides cover for the whole civil service and their dependents, for retirees and for seafarers and veterans. The entire cost of the premiums paid to CINICO in respect of those customers is currently met by Government.

The current level of contributions is inadequate to meet future liabilities and a strategy is needed to bridge the gap. The Government has announced it will look at the issue of co-pay for some civil servants. The Deputy Governor has been asked to take the issue forward and is doing so linked to a project conducting a wider review of the terms and conditions of civil servants.

The project will review the operation of CINICO in the context of the wider health insurance market and consider the best means of providing health insurance to civil servants, seafarers and veterans. The project will also examine the scope for CINICO to diversify its range of products.

We have laid the groundwork for the remainder of this administration and into the future because if not us, then who? If not now, then when? It is time our elected representatives look beyond the narrow confines of the electoral cycle and political advantage and look to the future of our people and our country and begin laying the foundation for that future. Ours is a progressive government that looks beyond personality politics focused on self-aggrandizement and political survival as was the case in the past. We have kept our promises. We get things done.

Looking ahead

As you have heard, Madam Speaker, Project Future fits in nicely with this Progressives-led Government’s Strategic Policy Statement.

Uppermost in our priorities is jobs for our people. This Administration will continue to seek out private companies that are committed to helping us develop the country and putting Caymanians to work.

Government supports the completion of private sector labour and pension legislative reform. The Labour Relations Bill 2015 seeks to clarify the 30-year-old Labour Law
to protect and enhance the rights of employees and employers where prudent. Government has heard the concerns of the private sector and others and will consider those carefully prior to bringing the Bill to the Legislative Assembly.

The Ministry of Education will implement a new governance model for education based on the results of the Outline Business Case that is being done in this fiscal year. That model includes greater community involvement; improved communication; broader skills by tapping into the experience of volunteers, business, industry and the public sector; and improved accountability, support and challenge for school leadership.

Also Madam Speaker, the National Training Council will be operational and work with the Ministry of Education, Employment and Gender Affairs to determine current and future workplace plans including areas of future occupational demand. This will support Technical and Vocational Education and Training in schools to assure quality, sustainability, value for money and that the needs of stakeholders are met.

Youth and sports facilities will be expanded and upgraded to promote sports development and tourism opportunities including the Haig Bodden Playing Field, the Centre of Excellence at Truman Bodden Sports Complex, the boxing gym in Bodden Town, the Red Bay Primary School and Donovan Rankine and Old Man

Bay Playing fields. Over on the Sister Islands we will complete construction of the 25-metre swimming pool at the Cayman Brac Playfield as well as complete the internal works of the multi-purpose hall on the Bluff.

Work will be done with sports associations to strengthen their internal structures and processes and a more comprehensive physical education curriculum and school sports will be implemented.

Just as we are duty bound to properly train up our future generations, we are also duty bound to care for our elders and those who have a legitimate need for Government assistance. The Ministry of Community Affairs, Youth and Sports will develop a National Older Persons Policy, a Social Assistance Strategy and complete the Poor Persons (Relief) Regulations.

We also have a responsibility, Madam Speaker, as a Government to look after those who find themselves running afoul of our judicial system. I spoke earlier of the Conditional Release Law. Going forward we will work with that law in tandem with

providing the Department of Community Rehabilitation capacity to increase staffing levels and resources to aid in the delivery of community corrections services. The objectives are to rehabilitate prisoners to function in society and live useful lives, to protect society from the criminal acts of repeat offenders and to reduce costs of incarceration.

As we strive to assure that those most in need in our society have their needs met, we also keep in mind our fiscal responsibilities.

One way we will do that is to implement the Procurement Law, which will lay the foundation for all future public sector procurement in the Cayman Islands. The Law will strengthen the procurement process with increased transparency and a greater focus on value for money while providing improved opportunities for Caymanian suppliers to be successful. By setting up government-wide contracts and doing bulk purchases for commonly used goods and services, the Government will approach the market as a single entity resulting in significant savings because of larger economies of scale and improved efficiencies.

We will also implement the Public Authorities Law to provide a consistent overarching governance, financial management and personnel management framework for Statutory Authorities and Government Companies to improve consistency of approach and to strengthen accountability in the Legislative Assembly and the public.

Madam Speaker, this Progressives-led Administration is striving hard to do better with services across the public sector. To that end we will continue to improve E- Government by developing and implementing a plan to significantly increase E- Government services. Part of that plan includes the implementation of an online declarations processing system, which will allow members of the public to submit and process Customs Declaration forms and imported goods electronically.

The first new E-Government initiative to come through the steering committee is the automation of the Tax Undertaking Certificates process, which will complement the suite of E-Government services available to our financial service providers. This is now in the final stages of user acceptance testing. A more significant project for small business services is going through the business case and procurement processes. In addition the changes to support the new Trade and Business Licensing Law have been implemented.

Following the workshop with the E-Governance Academy team from Estonia, we are completing the documentation of the overall strategy, preparing the outline business case to implement the strategy and have issued a request for proposal for business process re-engineering support for the E-Government progamme.

Heavy emphasis will also be also placed on cyber security. In today’s world, as we have all seen, achieving cyber security and data protection is not a single destination, but a continuous journey and I have advised the staff in the Ministry of Home Affairs to ensure that there is a sufficient, urgent focus on data security across Government.

Bringing the Cayman Islands into the 21st Century will be the consideration of new legislation to introduce trademarks in the Cayman Islands. In fact, Madam Speaker, General Registry staff is already undergoing training and developing systems. The introduction of local registration is expected to provide additional revenue for Government from an increase in registrations and renewal activity and to increase employment opportunities in the Government and the private sector. The local registration of trademarks will also allow residents and local businesses to protect their intellectual property without the need to obtain and maintain United Kingdom or Community registrations.

We will also continue to be a force to be reckoned with on the world’s financial stage. The Department of Financial Services Policy and Legislation will develop and maintain innovative financial services products that are consistent with international regulatory standards and are intended to both increase Cayman’s market share in the global financial services and ensure positive assessments by international standard setters.

As I have said previously, Madam Speaker, Government supports the Deputy Governor in his efforts for real structured reform of the Civil Service and is looking far into the future, not just the remaining months in this four-year term. As such we

will continue with the implementation of the five-year strategic plan that will stretch from July 2016 to December 2021. Under the banner of a reimagined civil service, the five-year strategic plan will improve how the civil service operates and improve the effectiveness and efficiency with which the civil service delivers political priorities.

Just as we are working to shore up our Civil Service, I have to acknowledge and I take great comfort in knowing that our Civil Service has a proven track record for meeting challenges head on, and delivering favourable results on behalf of the Country.

When faced with the call to “do more with less”, the Civil Service has responded. Headcount within the Civil Service has gradually declined, and as a result of numerous austerity measures aimed at reducing personnel costs, each year human resources costs have come in below the approved budget, thus contributing millions of dollars toward the Government’s achievement of annual budgetary surpluses.

Madam Speaker, the Government recognizes these achievements and the sacrifices that have made them possible. While keeping a steady control of expenses, we have endeavoured to reward good stewardship. In June 2014, the Government awarded a one off 2.5 per cent honorarium to the Civil Service. This was followed in July 2015, by the Government awarding a 4 per cent cost of living adjustment to all civil servants.

In 2013-2014, the Immigration Department undertook a process of job evaluations, which resulted in pay increases for Immigration Officers. In the current financial year
2014 – 2015, other uniformed positions have also been evaluated. As a result of favourable job evaluations, Customs Officers have received pay increases and similar increases are currently being made to Police Officers.

We note, Madam Speaker, that notwithstanding such efforts civil servants’ pay has been controlled by strict policies for many years, often times to the detriment of our most loyal and hardworking staff. As at 30 June, 2015, approximately 35 per cent of the Civil Service have suffered pay stagnation where they have not seen any increase in their pay points for seven or more years. This number increases to almost 50 per cent of the Civil Service who have experienced pay stagnation for five or more years.

The result, Madam Speaker, is that highly experienced employees may now be earning less than persons who are newly hired to the same roles. In such cases, new employees have been able to negotiate higher salaries; meanwhile, the pay for long serving staff has been frozen. This has resulted in sometimes pronounced disparities been existing staff and new hires.

I’m happy to say, Madam Speaker, that steps are finally being taken to address these issues as well. The Government has commenced a phased approach to this problem. Starting in the current financial year, teachers will be the first to see pay

increases to remedy pay stagnation. Teachers whose pay has not increased for three or more years and who have received favourable performance evaluations, will receive between one to three increments based upon how long their salaries have been frozen.

In 2016-2017, this programme will be rolled out in phases across the wider civil service. The Government has approved a bespoke budget, which has been earmarked for addressing pay stagnation within the Civil Service. This will allow the Civil Service to address the internal pay inequities that have crept into the system as a result of prolonged austerity policies that froze pay for existing staff, even where those employees earned additional qualifications and proved themselves to be excellent employees.

Madam Speaker, while the Government wishes it could do more to reward its staff, it is important to recognise that programmes have been deployed in a consistent, sensible and sustainable manner. We cannot fix everything in this term. In the coming financial year, we will continue to support the Civil Service while still holding it accountable to achieve favourable results on behalf of the people of the Cayman Islands. The Government has taken a responsible approach to restoring the fiscal health of the country and it has shared the fruits of this success with those who have helped to make it possible.

Madam Speaker, please allow me before I conclude today to speak a bit more about the world around us. It is by God’s grace and divine providence that we set out these plans for our future. We have striven as a Government to put our people first, to put the long term stability, our international reputation, and our children’s future at the heart of what we do. We have worked together as a team and indeed, everyone in this country has laboured with us to turn things around. We have done everything within our power.

But as we well know Madam Speaker, there are many things that are outside of our power. Indeed our world is faced with challenges, the likes of which we have never before seen. As a country whose economy is dependent upon confidence, whether as an investor or a traveller for pleasure, we must continue to keep a watchful eye on the events of the day. Madam Speaker in this interconnected world, few places on Earth today will be immune from the impact of further escalations in this global war on terror and I’m tempted to say war of terror.
And as other parts of the world wrestle with this war and the ensuing migrant crisis, we must not forget that political and economic realities are changing right here in our own neighbourhood. We have had our fair share of experience and challenges managing our own migrant crisis. Overnight, this too could escalate. Furthermore, as we approach our very own Cayman Thanksgiving on Sunday, 6th December, we must pause to give thanks for safe passage through another hurricane season. This did not have to be the case, as every resident here during Ivan or Paloma will recall.

This is why we reached out in support for our neighbours in Dominica when disaster swept lives, livelihoods and communities away just a few months ago.

And yet in the face of all this Madam Speaker we still have hope; hope for a bright, prosperous and peaceful future. This is an Administration that has a vision and a plan. And even if the world goes through a rough patch, we will still benefit by taking the steps we have to maintaining sound fiscal management and placing the well- being of our people at the centre of all that we do. This is what each of us took an oath to uphold and protect as Premier.

So as I present this motion for approval of the Strategic Policy Statement, let us continue to look to the future – not just the challenges, but the opportunities that will also come through technology and other breakthroughs in health care, energy, transportation, agriculture, education, management of natural resources and communication. We must ready our people and our children not just for today’s economy but for the economy of tomorrow. If we are wasteful and saddled with debt, we might not be able to afford the future.

In conclusion, Madam Speaker, as I said earlier, let the naysayers spout vitriol all they want. I am reminded of the words from American essayist Ralph Waldo Emerson who said, “Whatever course you decide upon, there is always someone to tell you that you are wrong. There are always difficulties arising which tempt you to believe that your critics are right. To map out a course of action and follow it to an end requires courage”.

The Progressives-led Administration has that courage. We’ve proven it time and again during this term. It has so far been a good season for the Cayman Islands and Caymanians and all who work here and invest here under our Administration. So I am confident, Madam Speaker, that in their full wisdom, the people of the Cayman Islands will continue the season of the Progressives-led Government.

Throughout our tenure we have been transparent, open and honest, sharing with this House and the wider public milestones – and there have been many – that the Progressives-led Administration has made from Getting Back on Course and Staying the Course. Now is not the time to change that course. We can never, ever go back to things as they were.

We knew when we took office that we would not be able to leap frog from where we were – a time of grave concern and uncertainty, a weak economy, failing businesses and dire unemployment – to where we needed to be in a single bound. We have made progress and we are determined to keep our promise to the people of a brighter future. We are and have been a Government of transparency that has restored the confidence of the United Kingdom, restored stability to the country, restored confidence in the Government and restored the economy. We are good stewards of government’s money and we will remain disciplined in our approach to public expenditure.

I want to personally thank my elected colleagues on this side and you Madam Speaker. I especially wish to thank the Minister of Finance, the Financial Secretary and the entire team in the Ministry of Finance for their hard work in preparing the SPS. It would be remiss of me if I did not also thank those public officers who are committed to the change that is required to move our country forward and who work hard every day to ensure the success of our policies. I appreciate everyone’s contributions.

Madam Speaker, everything this Progressives-led Government does is for the betterment of the Cayman Islands, her people and those who call our shores home. We are looking far down the road, not just the remainder of this term. We are laying a solid foundation for a Cayman that will continue to have strong economic growth and sound public finances. A Cayman that will provide a safe and attractive living environment, economic opportunities and employment, a high standard of living and good quality of life for all our people.

We have kept our promises. We get things done.

May God continue to guide us and pour his blessings on these beloved Cayman Isles.