Introduction Speech

"Ladies and gentlemen, we're in for a real treat tonight. Our guest speaker is a man who has been the
driving force behind this project for many years. He is the person who knows the whole history of how
we got to where we are today: the stories, the challenges and the little known secrets. Not only that but
he's a very entertaining speaker. Please join me in giving a very warm welcome to Stan Smith".
Opening and Closing Remarks
I join with our cosponsors in welcoming all of you to our annual workshop on state-federal interactions. 
The Pew Center on Global Climate Change is delighted to be working with the Georgetown Climate
Center, the Pew Center on the States, and the National Association of Clean Air Agencies to present
what we hope will be a very engaging and informative program over the next two days.
It’s wonderful to be here at the Newseum. The Newseum, of course, is home to such exhibits as the
News Corporation News History Gallery, the NBC News Interactive Newsroom and the Cox Enterprises
First Amendment Gallery. I understand that the Newseum has plans for several new exhibits in the
months ahead.  These include:
 The Fox News Gallery of Fairness and Balance … except you’re the one who has to keep your
balance because everything is a little bit slanted to the right. 
 The Hall of Cheerleading Journalism … brought to you by CNBC and its friends on Wall Street. 
Led by the cheer: Two, four, six, eight … how much can we make stocks appreciate! 
 And then there is a great exhibit on the Future of Newspapering … it’s sponsored by the Boston
Globe, although I understand that the New York Times is trying to shut the exhibit down. 
In all seriousness, as we consider the innovative approaches to climate change policy that are the focus
of this workshop, I want to set the stage with some observations about where we stand on this issue
right now, how far we’ve come, and where things are headed in the months and years ahead. Given the
focus of this workshop on state-federal interactions, I also want to talk about the varying yet
complementary roles of the state and federal governments in addressing this issue, especially given the
increased appetite for real action on climate change here in Washington. 
Last year, I opened this workshop with the observation that states were beginning to act on the climate
issue because of an absence of federal leadership. Well, it’s one year later and the tide is turning. Now
we are entering a period when the federal government is finally moving to address this issue. And we
need to think about what this means for the states. 
Does it mean the states will have a smaller role now in addressing climate change, presuming that the
federal government comes through with a serious program? Or does it mean something else? Well,
count me as a vote for “something else.” Because I continue to believe the states have an essential role
to play when it comes to addressing this issue. 
I will be discussing the intersection of state and federal roles in more detail, but first I’d like to share a
couple of observations about the science of climate change. Because every week, it seems there is new
data or a new study that adds to our understanding of the seriousness of the problem we face. U.S.
Energy Secretary Steven Chu recently gave a commencement address at Harvard and in that address, he
said: “For the first time in human history, science is now making predictions of how our actions will
affect the world fifty or a hundred years from now.”
And what science is predicting is something that should be of grave concern to each and every one of us.
According to the Intergovernmental Panel on Climate Change, the earth is on track to warm by as much
as 2 to 11.5 degrees Fahrenheit over the next century – that’s in addition to the 1.5-degree rise we
already experienced in the century gone by. As Secretary Chu pointed out at Harvard, a few-degree rise
in temperature may not sound like much on a given day, but the Earth was only 11 degrees colder
during the last ice age than it is now – the same amount of warming projected at the upper range for
the end of this century. Clearly, a few degrees can and will make an enormous difference.
Scientists also have reached a high level of consensus about what the temperature projections mean,
and the federal report released last week, “Global Climate Change Impacts in the United States,”
confirms this. Whether it is increases in the number and intensity of rainstorms (in the northeastern
United States heavy storms have become 67% heavier over the last century); or sea levels, which are
already rising and are projected to rise from two to three feet along the Eastern seaboard of the United
States, the risks to our health, environment and economy are huge. And every region and sector of the
country are vulnerable.
Without immediate and aggressive climate action, the West will experience reduced snowpack, less
available water, and more wildfires. More intense heat waves will plague the Midwest while the water
levels in the Great Lakes will decline. Extreme weather, including more flash floods and longer droughts,
will hit the Great Plains. And in parts of the South, the average number of 90-plus-degree days could
jump from 60 to 150 by 2100. And Washingtonians complain about our muggy summers now.
Clearly, the science tells us we have an enormous problem on our hands, and have no choice but to take
action to reduce these very real risks. And it is largely because of the science that public opinion on this
issue has shifted in recent years. 
A national survey conducted earlier this spring found that 77 percent of voters now favor action to
reduce greenhouse gas emissions. Further evidence of the shift in public opinion came in another spring
poll showing that 59 percent of voters believe efforts to tackle global warming will create new American
jobs. 
Now, my intention is not to stand up here and paint a completely rosy scenario of public support for
climate action. While public opinion has shifted, there is still some pretty significant polling that shows
we have a ways to go. 
For instance, earlier this year, in a widely touted poll, global warming ranked last in a survey of the
nation’s top 20 policy priorities. Among Republican voters, only 16% considered it a priority. And while
this polling has gotten a lot of mileage in particular policy circles – what is important to know is this: In
the same survey, 60% identified energy as a top policy concern – a 20% increase from six years ago. And
as we know, energy and climate change are inextricably linked – so I am OK with 60% of respondents
listing energy among their top priorities – a win for energy could well be a win for climate. And the
climate-energy connection is being made by more and more policymakers at the state level and in
Washington.
We’re meeting in Washington at a crucial moment for this nation’s efforts to address climate change.
We have a President and Cabinet that are fully committed to action on this issue – with cap and trade
legislation being their preferred approach. We have an EPA that is poised to regulate greenhouse gas
emissions – in response to the recent Supreme Court ruling in Massachusetts v. EPA. And we will be
hearing more about the EPA’s approach to these issues later today from EPA Assistant Administrator
Gina McCarthy, and tomorrow from EPA Administrator Lisa Jackson.
The White House’s commitment to action on this issue is matched at the other end of Pennsylvania
Avenue. Most recently, on May 21st, the House Energy and Commerce Committee achieved something
extraordinary – passage of a climate and energy bill out of committee that has the potential to set the
United States on a path to tackle climate change in a serious way. This bill will be debated on the House
floor beginning Friday, when it may reach a vote by the full House. (The bill passed the House on June
26, 2009 by a vote of 219-212). 
Looking beyond Washington, we have teams of negotiators around the world preparing for a December
meeting in Copenhagen. Their hope is to reach agreement this year on a new framework for global
action on climate change. And, of course, in addition to all of these other developments, we have a
number of state and regional initiatives moving forward around the United States – and we will be
talking a lot about these in the course of the next two days. 
I believe the states have an essential role to play in the nation’s effort to address climate change. As the
federal government begins to assert itself as a force for change, I believe we are entering a new phase in
the state-federal relationship where the two levels of government are working as partners to tackle our
nation’s energy and climate challenges. It’s not about one level assuming control over the other, or
about one level filling gaps that are there because the other level isn’t doing its job. No, it’s about the
two levels working in tandem, working together … with each side playing to its strengths.
Which then begs the question: What are the strengths of the states as we enter this new phase in our
nation’s effort to respond to climate change? What is the role of the states in addressing this issue when
you have the federal government on the verge of making cap-and-trade the law of the land, and on the
verge of adopting other national policies aimed at reducing emissions and spurring the development of
cleaner sources of energy?
As I look at it, I believe there are three ways to think about the role of the states in this new
environment.
First, states are laboratories for learning about what works (and what doesn’t) as we develop policies
and programs aimed at reducing emissions and spurring the development of clean energy technologies.
In fact, states have played this role quite well in influencing federal cap-and-trade legislation. For
example, the Waxman-Markey bill draws heavily from the northeast Regional Greenhouse Gas
Initiative’s auction design and standards-based approach to offsets, that under the federal bill will be
administered by EPA. The federal bill also takes an economy-wide cap-and-trade approach, much like
the design put forward by the Western Climate Initiative.
Now that we are poised to enact a national cap-and-trade program, the role states play as learning labs
will change. This is not to say their role disappears. Rather, I see ample opportunity for states to
continue to serve as centers of innovation and learning. But going forward, the most critical information-
sharing will occur between states themselves – not between states and the federal government.
Because it will be states that are responsible for setting building standards, reducing vehicle miles
traveled, ensuring  renewable electricity and efficiency goals are achieved, and adapting to climate
change. And when the time comes to reauthorize federal climate legislation, states will again be in the
best position to help shape an effective policy.
The national renewable electricity standards being debated in the House and Senate are also modeled
on renewable portfolio standards enacted by 30 states and the District of Columbia. But until federal
climate and energy policy is enacted, states continue to pursue a broad range of initiatives. For example,
on June 8th Nevada Governor Jim Gibbons signed a comprehensive energy bill that increased the state’s
renewable portfolio standard. Nevada is now set to generate 25 percent of its electricity from
renewables by 2025. 
And on the same date, June 8th, members of the Midwestern Greenhouse Gas Reduction Accord
released their draft final recommendations for the design of a regional cap-and-trade program covering
six states and the Canadian province of Manitoba. Tomorrow, Governor Jim Doyle of Wisconsin will
share his thoughts on actions being taken in his state and across the Midwest to address our climate and
energy challenges, and what the Midwest needs from national climate and energy policy.
The second way to think about the role of the states in addressing climate change is to think of them as
offering a Plan B in case federal actions fall short. Regional cap-and-trade initiatives like RGGI aim to
achieve real, verifiable reductions in greenhouse gas emissions. In the case of RGGI, the states involved
are committed to reducing CO2 emissions from the power sector by 10 percent by 2018. These states
are already working toward this goal, and they will continue doing so if we can’t get quick agreement on
a national cap-and-trade program, and if the national program does not deliver the reductions it
promises down the line. 
The same goes for other state policies such as renewable portfolio standards. As federal lawmakers
continue to haggle over the details of a national standard, many states already have ambitious RPS
programs in place. For instance, Texas is expected to avoid 3.3 million tons of CO2 emissions annually
with its RPS, which requires 5,000 megawatts of new renewable generation by 2015. This is going to
happen whether or not we ultimately have a national standard. What’s more, if the national standard is
not sufficiently strong or ambitious, Texas and many other states will have their own stronger standards
to assure that, within their borders at least, folks are doing what’s needed to develop and deploy
renewables. That’s an important fallback, a Plan B, as we try and calibrate the specific elements of a
federal climate and energy program. 
The third and final way to think about state roles is to remember that states have the authority to take
action in some areas where the federal government cannot. And states also are better suited than the
feds to do certain things. For example, states can promote clean electricity and energy efficiency with
policy tools such as net metering, green pricing, and public benefit funds. States also have authority to
adopt building efficiency codes, which can have a major impact when you consider that energy use in
buildings produces about 38 percent of U.S. carbon dioxide emissions. States also have great control
over smart growth policies and transportation policies aimed at reducing emissions from cars and
trucks. These are examples of things that fall within a state’s authority and in many instances, outside
the authority of the federal government. 
States as a laboratory for innovative solutions and information-sharing, especially between each other.
States as a Plan B in case federal actions fall short. And states as entities with unique authority to take
action themselves on these issues. These are three ways to think about the role of the states as we
enter a new phase in the state-federal effort to address climate change.
But, of course, a national role is important as well. It’s crucial. For example, certain actions, if they are
taken nationally, can be more cost-effective. And we also have to keep in mind that there is no
guarantee that all states would act individually. In order to reduce emissions of greenhouse gases, and
to do so both cost-effectively and to the levels scientists say are necessary, I believe we need the federal
government to step up to the plate at the same time that the states are doing their part.
Let’s look at cap-and-trade as an example. This is a solution that works best when it covers many
emission sources. The more states, or the more countries, that are part of the system, the more you can
achieve efficiencies of scale and the more you can lower the cost of reducing emissions. This is why
many states are reaching across their borders to establish regional cap-and-trade programs. They
understand that the economics of cap-and-trade get better when more states and more communities
are involved. But if regional approaches are better than going state-by-state, it is also true that a
national approach is better than doing this on a region-by-region basis.
Ultimately, we need a national cap-and-trade program. And this is why the developments in Washington
over the last several weeks are so important. Last month’s vote of the House Energy and Commerce
Committee on the American Clean Energy and Security Act marks the first time that a serious climate bill
has made it this far in the House.
The Waxman-Markey bill combines ambitious but achievable greenhouse gas emission reduction targets
with a market-based cap-and-trade program. It is a good bill that protects consumers and provides the
certainty businesses need to make substantial investments in clean energy technologies. 
Of course, the Senate is an entirely different matter. Majority Leader Harry Reid and Senator Barbara
Boxer, who chairs the Environment and Public Works Committee, have made cap-and-trade legislation a
priority for 2009. Last week, the Senate Energy and Natural Resources Committee approved a broad
energy measure that among its many provisions includes a 15% national renewable electricity standard.
But action in the Senate on a combined energy and cap-and-trade bill will be far more difficult than in
the House, and while Senator Reid has said he hopes for a vote this year, it’s nowhere near certain this
will happen. Although a bill can pass the House along partisan lines, this is not a possibility in the Senate.
Sixty votes is a high hurdle, and bipartisan leadership will be needed. I also believe a bill can only move
through the Senate if there is active engagement from the White House in mobilizing support from both
Republican and Democratic senators.   
But it’s hard to dispute the fact that serious climate legislation is on the move and that the United States
will have a cap-and-trade policy in place before long – maybe not this year but perhaps in 2010. When
this happens, Washington finally will be doing its part to begin to build a true partnership with the states
on climate and energy issues.
As passed by the committee in the House, the American Clean Energy and Security Act enables states to
reserve the right to take action to reduce emissions should federal efforts fall short. More specifically,
states must suspend any cap-and-trade program until 2018 … but they are within their rights to act after
that date if the federal program is not getting the results states had hoped for. States and businesses
and others overwhelmingly prefer a federal program to a patchwork of state efforts, and the idea of
suspending state efforts is to provide an incentive for the federal program to work.  But if the federal
effort is not working as promised, then the states can step in after 2017. States can be Plan B.
The legislation also includes many other provisions that highlight how both the federal government and
the states have important roles to play in this work. For example, the bill supports state and local
adoption of advanced building codes, it supports state building retrofit programs, and it instructs states
to submit goals for transportation-related reductions in greenhouse emissions. 
At the beginning of the cap-and-trade program, states will receive 9.5 percent of federal emission
allowances for investments in renewable energy and energy efficiency – this figure would decline over
time and hold at 4.5 percent after 2021. In addition, funds raised through the federal efficiency and
renewable electricity standard in the bill would be given directly to states for use in renewable energy
and energy efficiency programs. 
Last but not least, the House bill allows for the exchange of state and regional emission allowances for
federal allowances. This is limited to allowances issued by California, the Regional Greenhouse Gas
Initiative, or the Western Climate Initiative. 
In conclusion, I want to say that U.S. states are acting in the best traditions of federalism by advancing
an array of solutions to climate change that showcase the states as laboratories of democracy, as a Plan
B solution when federal efforts fall short, and as entities with unique authority to bring about real
changes in energy use and emissions. Today, as we anticipate a more active federal role in addressing
this issue, the challenge is to create a more balanced state and federal partnership. If we can do it right,
such a partnership will bring much-needed certainty to the question of how we as a nation are going to
address the most critical global issue of our time.
Thank you very much. 
Welcome Speech

Good morning ladies and gentlemen and welcome to the Eden Roskill cricket club and I am Mr.
Grant, the chairman of this club. I have been working here as a chairman for the last 3 years. I used to
work as a coach of under 18s for Cornwall cricket club before I joined eden Roskill. I have played for
Wellington firebirds and met many professional players.
The reason all coaches and parents are gathered here is because the club is reopening after some
renovation. We have added extra cricket services as more and more people are joining this cricket club.
Eden Roskill is the home of the most cricketers and it was first opened in 1923. Since then it has given
New Zealand great cricketers.
We have made the whole of this indoor facility from scratch. Behind me are the new cricket nets we
have just replaced because the old ones had some holes in them. These have a bit of extra net on the
top so that the ceiling will not get damaged. We have built a bar and it is open on Fridays and the
weekends from 6pm till 11 pm.
After dinner Speech
All of us have seen the movie where the detective jumps in a cab and says "Follow that car." Tonight,
however, the forces of law and order will have to jump on bicycles because all the cab drivers are here
and they are certainly not for hire.
Tonight is a night to switch off our meters and to relax and enjoy ourselves with our friends. We won't
be talking about fares or the dangers we face in our work because tonight is a night for fun. That
definitely means a night for telling stories about the people we carry in our cabs.
There can be no doubt about it, all human life is there at one time or another. We have drunks singing
"Show me the way to go home." There are lawyers who have to be there on time to sign on the dotted
line. Then there are the patients who are going to hospitals and the happier ones who are going home.
We have tourists who are doing the sights and who expect us to give potted histories on the Statue of
Liberty and cab drivers have to be philosophical because much as they would like to they can't do
anything about traffic jams. So it's either a question of high blood pressure or just sitting back and going
with the flow. If everyone really has a book in them I reckon cab drivers have a whole series of them and
they would all be best sellers. After all, they have all the ingredients needed. There is drama, romance
and danger in the back seat
Tonight we are catching up with our friends and, hopefully, making few new ones. We are dining in style
which makes a change from takeaways. We deserve it. In fact, when you think of the unsociable hours
we work and the dangers we face I think we deserve more than a night out. I think we all deserve a
world cruise. The only cruising most of us will do is around the city,
So we had better make the most of tonight. If you feel like singing, feel free. If you want to dance on the
table, don't let us stop you. If you feel like painting the town red, be our guest. Tonight is your night and
it's up to you to make sure it is a night to end all nights and we don't even mind if you want to have a
drink or two. Being the law abiding citizens we are we've arranged for a bus home.
So tonight let us raise our glasses in a toast to the folk who keep the city moving, The Cab drivers of
(Name of place).
Today we've gathered together
To have a good time and a chat
To speak of the people we've met on the job
To discuss this and, of course, that.
We're dressed in our very best tonight
And our spirits they're very high
No counting out change for us tonight
Or gazing way up at the sky
As we sit in the traffic it seems for hours
Muttering just what we think of the powers
Who allow this bedlam day after day
But tonight, "Forget it" is what I say
We're gathered together so let's have fun
And leave, till tomorrow, those guys on the run.
Farewell Speech
Welcome, everyone, to this very special occasion. And a bitter-sweet occasion it is to us. It's very sad
to be saying goodbye to Mrs. Jane Smith who is closing twenty years of military service.

In 1995, she was one of 1, 200 American women deployed to Haiti for peacekeeping duties. She
successfully fulfilled her mission. For twenty years, she has had the privilege of serving our great nation
with duty, honor, courage, commitment, vision, tenacity, and spirit that all of us, her male and female
colleagues, value so much. She has served our country with distinction. She pursued the career and
lifestyle of the military, making them the main meaning in her life.

As you know, the official history of American women in the military began over a century ago. In the late
1980s, when Jane began her military career, the percentage of women in the military was quite small,
especially in the navy. In many ways, women who wanted to be in the Navy were discriminated. They
were not considered to be strong enough to serve equally with men. This view has changed since then. I
am proud to say that two million women have served our country. Of the 540, 000 Americans who
served in the Desert Storm operation, nearly 41, 000 percent were women. It was the largest wartime
deployment of American military women in history. Women in the military have great achievements.
Nobody doubts that they are playing an important role in peacekeeping missions.

Today, women make up 15 percent of enlisted each year. When Jane began her military career, very few
women were prepared to stubbornly move from our profession's periphery towards its heart. It was
very hard, for we, men, dominated in the military and were not ready for any female competition. We
thought that girls in the military would give up, unable to be qualified as our equals. But the more they
trained and the more they buried their heads over textbooks, the more admirable they became to us.
They taught us, with all persuasion and overwhelming willingness to serve our country, to pursue long-
term goals, and, despite hardships and obstacles, realize them.

When we were together in the Naval School, we failed to see competitors in women in the military.
Now, due to such women as Jane, our predominantly male service has been changed. Jane has
succeeded in doing her military duty, and she was several times awarded for her excellent military
service. It is almost incredible to believe that she is Mom to these two boys, her sons, who want to
follow in their Mom's footsteps and continue the family tradition in the military. Sleepless nights, far
away from her sons, never did Jane complain, never did she show how hard it was to be at the head of a
single household and in the military. More than that, she always helped us, men, to overcome
separation from our families, with her own example. At the rare moments off our duty, she found warm
words that strengthened us. She became our friend with whom we were able to share happiness and
troubles. She has become a valuable asset to our military team, qualified, reliable, trustful,
understanding, and brave.

We will be missing you, Jane, a lot. We will be missing your sense of humor, your ability not to lose your
head in a difficult situation, your friendliness, your open-hearted personality, your good nature. For you,
this moment is crucial: you have to alter many things, which is not easy, in order to get adjusted to your
new life on land.

From me to you, dear Jane, thank you for inviting me to speak and take this memorable opportunity to
wish you the best of luck in your future endeavors. You can explore more horizons, here, on land. I am
sure you will find new opportunities and pleasures in your civil life.
Happy retirement!
Speech of Presentation
It is a pleasure for me to speak to you this evening about a subject that affects all of us, in both the
public and private sectors, namely the financial services industry. When I was considering drafting my
speech for tonight, several thoughts went through my head as to what message I would try to get across
to you tonight.
I know that over the past year, most of the speeches in this area have revolved around the all too
familiar "buzz" words such as OECD, FATF, black lists, Tax information exchange agreements and I could
go on. This of course, in my view, has created a "doom and gloom" mindset and has led to much
speculation as to the state of play of the economy and questions being raised as to where do we go from
here.
I of course could not premise my speech tonight without some mention of these initiatives as they have
significant implications for the financial viability of our economy, but I will not make this "doom and
gloom" picture be the main focus. The reason being is that I am a firm believer in the saying that "As you
think, so you become".
Instead, I am therefore here to tonight to categorically state that in spite of all these international
challenges, Cayman is still a premier international financial centre and still has a story to tell, now even
more so than before.
Therefore, ladies and gentlemen, tonight I will attempt to address the concerns raised by many of you
by outlining to you where Cayman is now with regards to the state of its financial services sector as well
as government's finances and where do we go from here.
For the past several years the Cayman Islands financial services sector, like the financial services sectors
in many smaller economies has come under scrutiny and been subjected to pressures applied by the
leading industrial states.
There are three broad groupings to the international initiatives:
1. Those related to international cooperation on anti-money laundering activities led by the Financial
Action Task Force ("FATF");
2. Those related to taxation led by the Organization for Economic Cooperation and Development
("OECD") and the European Union ("EU"), and
3. Those related to regulation of financial flows led by the IMF.
While all of these initiatives are interrelated and the government is actively monitoring events in each of
these areas, over the next few months it is anticipated that the particular initiatives which will occupy
the government's time will be the EU's draft Directive on the Taxation of Savings Income and the IMF's
Level 2 assessment of the Cayman Islands financial services sector.
In respect of each of the international initiatives, the government is committed to doing what is in the
long-term best interests of the Cayman Islands.
Regarding the various sectors within the financial services industry, the banking sector continues to
consolidate.
While the first half of the year saw the issuance of eight new banking licenses, there was a decline in the
total number of licensees. One Category "A" banking license was issued to CIBC Cayman Limited during
the first half of the year resulting in 32 Category "A" licensees. There will likely be some rationalization
amongst this class of licensees during the second half of the year.
The Insurance Sector, similar to the Mutual Fund Sector is probably going through its best year in history
and more importantly, given the current global environment, the quality of the applicants continue to
meet our high standards.
The number of captive licenses issued is38 at the end of June 2002 and another 26 are under review.
This growth is double that of previous years and is partly attributable to the comfort that overseas
business take in doing business in Cayman. The domestic market, as expected, has seen no decline or
increase since 2001.
Likewise, the mutual fund sector continues to be buoyant, particularly in respect of registered mutual
funds, which increased by over12% since December 2001 from 2,937 to 3,301 at the end of June2002.
Growth indications from fiduciary service providers of the Cayman Islands continue to demonstrate
steady growth in the wake of legislative changes. The last six months of 2001 indicated a 20% growth in
this industry with a sustained momentum of 20% continuing for the first half of 2002. This represents an
increase of 40% over the period of June 2001 to June 2002,which details an increase of Companies
Management licensees from55 to 77.
We continue to offer competitive financial products in an environment that is compliant with
international standards.
On domestic economy and budgetary matters, the clarion call of the Chamber has always been for the
Government to reduce expenditure. While the Government understands and accepts the position taken
by the Chamber, it is our view that it is unwise for Government to make drastic expenditure reductions
because this could have the effect of worsening the current slow-down in our local economy which is
reflective of worldwide conditions.
The Government needs to be careful how and where it cuts expenditure to ensure that the social and
infrastructure support that the government provides to the business and wider community is not
compromised.
Furthermore, the public's desire for government services is always increasing which always fuel an
increase in government expenditure. Expenditure cutting is therefore as low business and government
cannot undertake a major fiscal correction overnight.
However this Government is committed to reducing the operating expenditure of government. This is
being done in the context of the new Public Management and Finance Law, which is wholeheartedly
supported by both sides of the Legislative Assembly. This Law requires the Government to act in a
fiscally responsible manner, which means:
· running an operating surplus;
· ensuring a positive net worth for the Government;
· maintaining borrowing within designated debt ratios; and
· building our reserves.
To accomplish these goals, Executive Council is using a budget targeting and allocation approach. In
short, this method allows government to decide how much it can afford to spend - taking into account
likely revenue inflows and, then allocates that total amount between its Ministries and Portfolios. We,
like other businesses, have to cut our suit from the cloth available.
Already the budget for Government's operating expenditure is starting to decline. In 2001, the operating
budget of government was $276.4 million. In 2002, it was $269.7 million; a reduction of $6.7 million and
we are planning a further reduction of $2.9 million in respect of the half-year budget that will end on 30
June 2003. This is equivalent to $5.8 million if a full-year budget was being prepared to June 2003.
Whilst the reductions in operating expenses are a good start, ongoing effort is required to monitor and
control expenditures. As I speak, the Civil Service is looking at ways to reduce their budget expenditure
for 2002 with the objective in mind of achieving, at a minimum, a balanced budget position at 31st
December 2002.
This Government is committed to working within these fiscal principles.
For the 2003 half-year budget, Executive Council has reviewed the economic and financial projections
produced by the Portfolio of Finance and Economics for the next 3 years. In simple terms, this was done
to give Government an indication of its likely revenue inflows over that 3-year period.
The financial targets, which were established, are based on the following strategies:
· One: No new borrowing - to ensure that the borrowing limits set by the Public Management and
Finance Law are not exceeded;
· Two: Making the required annual payments into a sinking fund when it is established - to ensure the
Government's borrowing repayment obligations are met;
· Three: Limiting capital expenditure to levels that can be financed by operating surpluses - to do
otherwise would require new borrowing;
· Four: Generating operating surpluses. This will be done by allowing revenue to increase in line with
economic growth (rather than additional new revenue measures);and by controlling the rate of growth
in recurrent expenditure.
This means no performance based increments or cost of living increments for civil servants, continuing
them oratorium on the filling of vacancies and also continuing with the reform of the civil service, which
we started.
· Five: Building reserves by leaving existing reserves untouched and committing to allocate any
unforecastor unexpected revenue to reserves.
This strategy means that the target for capital expenditure is determined by the level of the recurrent
surplus less the amount of that surplus that will be used for debt repayment.
The key strategic decision for the Government is therefore the trade-off between the level of the surplus
and the level of capital expenditure the greater the capital expenditure the greater the recurrent
surplus needs to be.
In this context the Government has again focused on keeping expenditure down and the aggregate
targets for capital expenditure are relatively modest: $10.3 million for the 2003 half-year, $13.3 million
for 2003/4, and $13.6 million for 2004/5.
The financial targets result is two very positive fiscal indicators:
· Firstly, a reduction in government expenditure (when measured as a proportion of GDP) reducing from
24% to 20% between 2001 and 2004/5;
· Secondly, moving from being a net borrower to a net repayer of public debt. In previous years we were
borrowing more than we were paying back.
These trends are a powerful indicator of the Government's fiscal stewardship. However, I must caution
that as with most governments worldwide, the 2003 half-year budget is being prepared against a
background of an uncertain economic environment.
Uncertainties surrounding the stock market and the current accounting scandals have left investors
extremely hesitant to make commitments. This is bound to slow down the global economic recovery.
However, government is committed to charting the best course through these stormy waters and is
asking for your support. The government is committed not to introduce any fees on the financial
services sector.
The Government is also committed to continue a policy of open communication and transparency in our
fiscal policy.
The tabling in the House shortly of the first Strategic Policy Statement is a clear example of this
commitment. That Statement outlines, in detail, the policy and fiscal parameters on which the next
budget is being developed.
It provides an opportunity for the Legislative Assembly, and the community as a whole, to debate the
strategic direction of the country. I hope that the Chamber will take advantage of this opportunity as
well.
And so I believe that the public and private sectors will continue to build on the gains we are making in
2002,supported by government's focus on controlling government expenditure and efforts to further
reduce government without sacrificing government services.
The Government's responsible approach to fiscal management is an important part of that strategy.
Responsible financial management is not only desirable, it is essential.
What I have said so far outlines what this Government inherited, how it improved the budgeting
mechanism it inherited and, our plans for the future.
Government's financial position is being monitored very closely. A forecast of the possible year-end
position is presently done shortly after the close of each month and this will continue to be done for the
remainder of the year.
Once again, let me restate that this Government is determined to keeps its books balanced and to
produce a surplus where possible along with building our reserve levels.
Before I close, I have a challenge for all of us here. I'll pose it in the form of a question: Where shall we
go from here? The answer, I believe, is captured in the phrase "thinking outside the box".
For example, who are our competitors? I know many of us here in this room are probably guilty of
responding to this question by saying Bermuda, Bahamas, BVI and other such "offshore" jurisdictions in
the Caribbean and perhaps Jersey and Guernsey. But how many of us would actually say that our
competitors are the likes of London, U.S, Ireland, Switzerland and other such first world countries as
they are termed. They are our competitors as well.
The result of the international initiatives has meant that Cayman is now competing on a global scale. The
advantages that offshore canters once had are no longer. We therefore must think and act as a first-
world country; in this respect, we must become more innovative. So I submit to you that we focus on
three key things, knowledge, skills and investment.
In terms of knowledge, we know that Cayman has a small population base compared to many of our
competitors.
Furthermore many persons are compelled to go abroad for tertiary education. The other side of this coin
is that we still have to import knowledge.
We must therefore create more of an "open door policy" to expand our knowledge base. I know many
of you have complained about the bureaucracy in obtaining work permits for persons who had the
knowledge you required to make your business succeed. towards work permit applications, particularly
those from the financial services industry. We must change attitudes for us to be successful.
But to be innovative, one must also have skills. There are many skilled persons here in Cayman, but we
need to improve on what we have. I encourage you the industry to ensure all of your staff are equipped
with the skills necessary to provide top-notch service that is better than our competitors.
This Government is a listening and new-business orientated Government. We constantly receive and
I can say that this Government will do everything within our power to ensure that, this situation no
longer applies. We will cultivate the business environment by taking a
welcome new business ideas. As an example, the Government has a preliminary sketch of a new
investment vehicle that would boost the real estate and financial services industries. It is intended to
put this vehicle in place later in the year, but government welcomes any new, viable idea that will
strengthen our economy.
We have always prided ourselves on the strong partnership between the Government and the private
sector. This partnership only served to grow stronger in the light of the challenge sand the many hurdles
that have been put in our path particularly over the past year. The Government encourages you, the
experts, to share your views and proposals with us and therefore continue to have a voice in the shaping
of the industry.
To summarize all that has been said tonight, government's goal is to build a secure and prosperous
Cayman Islands that will afford a proud legacy for all our children and grand children. An important
strategy in achieving that goal is to promote a vibrant and growing economy that provides opportunities
for all. And again, we look forward to strengthening the partnership with the private sector to this end.
I have spoke forthrightly tonight because the time is now for government and the business sector to
reason and work together for the good of us all. I appreciate your kind attention ; thank you and good
night.
Hencel Anne B. Rodriguez
08-25-136
BM-32
Ms. Galvez
(Professor)