Mr Jefferson revealed that by 30th June next year, the government expects to have a 90-day cash reserve that will be sufficient to pay for a quarter of a year of government expenditure.

Mr Jefferson highlighted that this reserve would be a first for the Cayman Islands.

The reserve is a requirement of the Public Management and Finance Law (PMFL), which governs spending across all government entities.

This accomplishment would be a significant one, given the constraints of the present global economy, which also impinge on Cayman, Mr Jefferson noted.

In keeping with the PMFL's requirements, the budget would enable a net operating surplus of USD13.5mn, which would also be used to fund capital expenditure. In part, the surplus would be possible because of belt-tightening by government agencies, he said.

Mr Jefferson presented a 08/09 budget that envisaged spending USD164.4mn on infrastructure development, but no new revenue measures.

Borrowings for the year would total USD154mn; if fully drawn-down by 30 June 2009, this would take total borrowing to USD412.7mn. However, it would not reach USD700mn, as mentioned sometimes in public commentary, the Financial Secretary emphasised.

The borrowing is intended mainly to fund government's planned capital investment programme, which includes rebuilding George Town Primary; and building three high schools, government offices, a multi-agency emergency response facility, and vehicle licensing headquarters.

It also includes purchasing medical equipment for the Health Services Authority.

Mr Jefferson indicated that as a direct result of the economic situation, revenue forecasts for the coming fiscal year will be down USD11mn from what was predicted in the 2008/9 Strategic Policy Statement that he unveiled last year. Operating revenue is now expected to be USD528mn.

Focusing on the performance of the financial services sector, Mr Jefferson stated that company registration had grown significantly, by 5%, for the 12-month period ended 31st March 2008, with exempt companies growing by 9%.

Exempt companies account for nearly 80% of the revenue generated by the General Registry.