Lost tourism revenue only small dent in public purse
(CNS): Despite missing out on more than nine months of tourism tax revenue during 2020 as a result of the lockdown, the government still managed to navigate public finances last year based on the financial services sector and stamp duty. Finance Minster Roy McTaggart said government collected $3,273,000 in cruise departure taxes last year, more than $8 million less than budgeted, and took in just over $10.2 million in accommodation tax, which was over $25.7 million less than had been expected without the border closure. But despite these significant losses, the lack of tourism tax was not the cause of government’s $38 million deficit, McTaggart said.
The deficit was due to government’s unexpected direct and indirect spending on the consequences of the pandemic itself, such as testing, prevention, quarantine and healthcare costs, as well as the financial support for those who were forced out of work or their businesses stalled, the minister said. This additional spending added up to more than $65.
Despite this extra spending and the loss of almost CI$34 million in expected revenue from tourism, the government ended the year with a much smaller hole in the public purse than expected.
“The unaudited CI$38 million deficit is after… a significant level of COVID expenditures being incurred in 2020. Were it not for this… necessary expenditure, government would have produced the normal, usual surplus,” he said.
The year-end figures for core government, excluding its authorities and companies, show operating expenses at $827 million and revenue of $789 million. The debt balance at the end of the year was $248.6 million, giving Cayman a GDP debt ratio of 5.2%. Government has secured a line of credit with a consortium of local banks of around $375 million, but so far it has not had to use it. The government also has $447.6 million in the bank. This will help the country navigate this year when people will still need help from government, the minister said.
“The pandemic is not over, not by a long shot,” McTaggart warned. “Government continues to be challenged by the extraordinary demand for assistance and services from our people who are experiencing unprecedented hardship.”
He warned that despite bearing the significant tourism losses last year, at least in 2020 the government collected revenue in January, February and part of March, but in 2021 there is no revenue at all. “We are starting from a position of zero,” McTaggart noted, but said he was hopeful that, once tourism returns, the growth in the US indicates that economically we should benefit from that.
McTaggart pointed to the success of the offshore financial sector, which had around 13% growth last year following an even better year in 2019. He said Cayman collected over CI$5.7 million from one new fund sector alone.
See the full press briefing on CIGTV below:
Category: Government Finance, Politics
The port can still work, it could be cutting edge and enrich the sea life if done properly. The doubters have no sense of what technology can do beyond their cell phones.
Someone remind me, why did we need this dreadful port? According to Roy now, the little 11 million per year are nothing to the public coffers,. Makes me also wonder why we need to give concessions to build concrete monstrosities as hotels, according to him we can do without the 36 million accommodation tax easily too. I also happen to remember over 350 million on unfunded pension liabilities for Government employees published in 2019, what happened to those in his balance sheets? Roy has not a lot of credibility, seems to be Alden’s choice of a puppet for the puppet master to retain his power!
Vote them out!
So exactly why do you need free vaccines?
because sick people cost way more than healthy people.
Cost? Generate revenue
Vote this joker out – tis man supports violence that was made clear when he remained silent on all matters related to McKeeva!!!1
⛔️ Those who condone violence agains women must not be elected. Roy including.
🛑 DON’T FORGET THAT!
1.17pm One track mind. So protecting you from Covid doesn’t matter, effectively handling the economy counts for nothing?. Then someone who doesn’t condone violence, who knows nothing about the econnomy and does nothing to protect you from a pandemic is just what you are looking for. Of course when the new guy fails you will complain..again.
We will hear a different story after the election. Just trying to cover up their (PPM) slip-of-their-tongue announcement of implementing taxes shortly.
Wait WHAT!!! When did you hear that?
And we wonder why the EU is on our backs. 2019, the great Premier announces the largest government budget for the year 2020 and 2021…”Two Billion Dollars”… this genius above, now announce this.
Bloody hell, he’s aged.
Dealing with political slime and adjusting to their ways can do that.
He did not stand up against Speaker. He lost my respect.
Commenting on the person’s appearance is childish. The person may have health issues.
If they have health issues affecting how they look, running in an election for a 4 yr term isn’t real smart.
If they all had Cardiac IQ test which includes Lp-PLA2, it would have shown very high CVD risk.
This man is a joker.
Thousands have lost jobs
Why do we allow these jokers?
Roy McTaggart is just another Lodge afficianado.
Bollocks Roy. When you put your stupid apron on, do your dodgy handshake and vow to your fake god, remember the people that cannot afford a week’s groceries.
You totally suck. Alden McLaughlin totally sucks and I cannot understand why our Governor gives you right.
Thugs, all of you. In costumes.
Which fake god? Aren’t they all fake?
All except the right One.
What are you taking about??? He is reporting on accounts. Not job losses. He acknowledges the Tourism losses but the Govt finances are holding up. If they were not the Govt would not be able to give stipends to various persons.
No more cruise ships!
Using the figures given:
3.3 mil + 10.2 mil = 13.5 mil additional loss for 2021 (hotel and cruise tax)
If the current deficit is $38 mil then $13.5+$38= $51.5 mil deficit for 2021 (all things being roughly the same).
Cash less the current debt leaves $199 mil available for covering the shortfall.
$199 mil/51.5 mil deficit/year= 3.9 years.
If this is accurate, then the CI is in an enviable position.
However, can someone explain how with the loss of $34 mil in 2020 plus the unexpected spending of $65 mil (I assume million but the article didn’t specify) would result in the deficit of $38 million?
Looks like it should be about $100 million. In that scenario – 2 years will be when the surplus runs out. Like everyone says – Cayman is a rich place.
2020 Budget had a surplus (budgeted). So the budget surplus, minus COVID under-revenue, minus COVID unplanned overspend, plus some budget underspend because some things didn’t happen because COVID, equaled a final deficit of ‘only’ $38mil.
There are those who will say anything do anything to get elected it took a $30,000 payment to a Bodden Road Election Fixer the last time now we have a building consultant/Food expert running around now with way more $$$$$$$$ from the Developers Guild Mafia! The choice is yours Cayman ??
It’s all about selling the jobs and effectively futures of Caymanians right Roy? No more opportunities for them like you had coming through the accounting industry.
Disagree. I know several young Caymanians making a nice career for themselves in accounting. A few have had their entire tertiary educations paid for by firms with a guaranteed position when they return. I see them moving up the ranks. If you have the brains and the drive you still have excellent opportunities in this field locally as a Caymanian.
But God help you if your talents are in legal services, rather than accounting, right?
Totally agree.
Can’t help but wonder what all those COVID related expenses were.
Couple of hundred dollars in food vouchers here, $1000 there for tourism workers which we know wasn’t enough.
Half the people left the bloody island!.
It’s shocking that this Government makes a surplus so often by taxing the living daylights out of it’s population and visitors and yet can’t fund a real social safety net (read, not willing because it takes the USA approach to poor people) such as an NHS, or state pension, or proper unemployment benefits, or proper annual leave, or a proper living minimum wage, or a proper, proper, proper, proper and so on.
All this money even with COVID and we still have people on this island without running water and / or mains electricity?
Absolutely outrageous. But hey, the civil servants and politicians are fine, as are the accountants and lawyers.
This Government is correctly in an enviable position, just a shame they don’t make good use of it. It’s easy to have a surplus every year when you neglect the basics such as pavements, beach access, paving roads, well funded schools etc.
Tourism people should have been earning their money and doing NICE work (even along with NICE people).
One thing you can say about Government schools is that they are well funded.
I bet the individuals in tourism jobs whom have been without income for a year, think it’s a pretty big hit to THEIR purse! It’s not all about the government purse!
nonsense… in reality its around $150m reversal in cig year on year figures.
and this is not sustainable.
whats the plan from no-plan-ppm except spend-spend-spend????
So CIG have just inadvertantly admitted that there is no need for a new Cruise berth facility in George Town. So now just focus on the ‘High End’ Tourist product with stayover arrivals.
Why inadvertently? It has been reported for years that tourism accommodation charges only 3% of core government total revenues.
https://caymannewsservice.com/2019/05/government-coffers-overflowing/
They overtly admitted it too, see the Premiere’s latest remarks on the topic
For years I’ve been wondering how tourism was the major asset to Caymans revenue. Now, once and for all tourism has been outed. It isn’t. Forget the huge hotels – we don’t need them thanks..Mr Dart.
why were you wondering for years if you read CNS daily? Reading comprehension problems?
Look at the chart in this article, hard to miss the chart.
https://caymannewsservice.com/2019/05/government-coffers-overflowing/
Over the years hundreds of comments on numerous articles were pointing to the fact you just discovered today. It was never a secret.
https://www.caymancompass.com/2018/01/25/financial-services-industry-caymans-invisible-giant/
“We were able to show government that they spend twice as much on tourism as they do on financial services. And for every dollar they spend on financial services, they roughly receive around $18 from financial services. Comparably with tourism, they receive less than $2 in revenue,”
Don’t the forget the $7 million dollars saving in personell costs by our world class civil service.
I wish to also record my thanks to everyone in the financial sector who worked hard to bring in so much revenue.
We are blessed to live in these islands.
Cobblers.
Keep the Stipends coming until we get on our feet🙏🏽
Let’s ban tourism. All it does is create minimum wage jobs that are mostly taken by non Caymanians while the profits are sent back to non Caymanian owners. These islands have no need for it.
I have lost all faith in Roy now..Somebody has to be lying..Alden and Moses told us that without the Port tourism was doomed and now without it for an entire year and in the midst of a pandemic, we are still making a surplus..
Did Alden call this press conference to try to solidify his PPM party being elected again? You can’t make this stuff up.
How we could have spent so much money with no income from either stay over or cruise tourism and still make this size of a profit?
People you will hear the PPM spouting this off at every one of their meetings but you wait until a new government is formed and this gets audited and you will know the truth.
Why is it that Caymanians are so gullible and continue to believe that these people are so credible. Does anyone really think that these numbers would be so rosy if there was still a year or more to go before election? Does anyone believe that this press briefing was timed for anything else but to boost the PPM’s effort to win the election.
In my opinion, Roy has sold out to the PPM propaganda machinery and is now willing to to do anything they say..Does he really think that Alden and McKeeva are going to give him free reign as Premier or as head of the party. No, they will be his handlers until he can take it anymore and either quits or walks across the aisle or they chew him up and spit him out.
Politics produce fair weather friends. we have seen so many that have left both the PPM and UDP Parties because of the corrupt policies and personal attacks by the heads of both parties..
This is so wrong, it is not being truthful, it is not being Caymanian like and it needs to stop.
Caymanians, I beg you this time around to free us of the chains of the remnants of these two good for nothing parties. We can do better!
This is just the final proof that it was always about loudmouth taxi drivers and Rolexes. Always.
This is a very wealthly place to live. Money everywhere! Just take a drive and look at how good we live. Construction booming.
Very expensive place to live. Very good living for some. Construction booming is not always a good thing.
8.05pm Constuction booming for Jamaicans not Caymanians
Importing poverty from Jamaica to build large-scale developments for wealthy foreigners to move into. Because that benefits the average Caymanian so much…
so if the accommodation tax doesn’t affect the gov purse why are more hotels being approved? is it because they mostly hire work permit holders which gives gov. more money ? not disapproving just trying to figure out why more hotels are being built
Firstly like to say congratulations to Cayman and its residents for doing such a great job stopping the coronavirus from getting in. That being said…if no government stimulus cheques then there should be another pension fund WITHDRAWAL!!! Cayman is one of the very few countries in the world with annual Government surplus and yet even during this pandemic refuse to provide stimulus. Ultra right wing country at its finest! I want my motherf*cking pension money to invest wisely on my own instead these BS pensions grossly underperforming the markets and 1.5% annual fee. White collar blatant theft of all pensioners. I bet the heads of those pension funds are living large fat bastards living at the Ritz. Almost as big of a rip off as getting your car repaired at GT Automotive.
Fantastic performance from a truly responsible government. We are so lucky to have this position in our wonderful Cayman Islands, the envy of the world.
Yes, our DUMP is something we can really be proud of.
World Class Dump.
… and our honourable speaker
…. and our public education system
…. and the high gas prices
… and cost of living
… and the dump!
Roy. Keep the large cruise ships away. They are simply not worth it!
So without the Covid expenses we would have had a surplus without cruise tourism. Can someone please send this messge along to M0$e$. Thanx.
7:19Pm I will personally get message to Mo$e$ today, I see him wandering all over Cayman Brac right now – figured he would have a public meeting to try and convince us to get cruise tourism on Brac – LOL cruise tourism on Brac -LOL.
You don’t want to do that. There are plenty US citizens who won’t be coming back for a while, if ever. Take everything you can.
Why won’t the said people be returning? Financial reasons? Otherwise?
If you think it is because of economic conditions, you may want to consider these two links and predictions. The two largest tourist markets for Cayman are forecasting 5%+ growth in 2021- despite a slow start in the first half of the year. A common reference has been that North America will experience another version of the Roaring ’20s that was experienced last century. Stay over tourism demand may exceed airline capacity as it will take them time to rehire pilots and get planes back in service. The residents in North America have received significant Government supports and have been hoarding cash.
https://www.conferenceboard.ca/press/newsrelease/2021/01/12/the-conference-board-of-canada-forecasts-economic-growth-in-2021-and-2022#:~:text=Ottawa%2C%20January%2012%2C%202021%20%E2%80%93,per%20cent%20in%202022%20respectively
https://conference-board.org/research/us-forecast#:~:text=March%2010%2C%202021,over%2Dyear)%20in%202021
You people are in LaLa land totally delusional. Your average stay over tourist coming from the USA has a fairly high disposable income. They are vacationing in the Caribbean as we speak. Believe it or not there are other islands that are great places to visit and a good share of your past visitors won’t be back after finding new islands that welcome them. I suggest you stay closed for another couple of years or until COVID is totally gone in the world and every single person in Cayman is vaccinated.
This is happening already! 😢 I know several people that used to ONLY vacation in Cayman….weeks at a time, big spenders….that were forced to try new places while our borders are closed. They’ve fallen in love with those places and plan to continue vacationing there instead. In the year that our borders have been closed, these people have already taken multiple trips to their new spots.
A couple of them said the growing anti-tourist sentiment here plays a part in that decision too.
And new people will replace the ones who switch. Cayman’s air arrivals are relatively low.
I also remind you that new people who try Cayman, arrive with a fresh set of eyes and dont know what it was once like. They may find the convenient airlift more desirable than Anguilla or St Barts.
There is also the largest ever generational transfer of wealth occurring in North America for the next 15-20 years and many families are being endowed with large amounts of money and property.
I think the future remains bright for Cayman and the Dart Group obviously do too. It has its challenges for certain, but for many it remains an appealing tropical paradise for expats and tourists.
Exactly – we are 50 years old will both be retired next year, planning to spend the winter somewhere warm. Cayman was our first choice. But we wouldn’t want to spend 10 days in quarantine and moreover we have a son who who wouldn’t be able to visit in the university holidays without spending most of that in quarantine. So relieved we didn’t buy a retirement property before the pandemic as now we can choose somewhere else. Cheaper as well!
I would like to know what Govt spends on the medical expenses on the thousands of our civil servants plus all their dependents.
Dependents cost additional.
How will CIG decide it is safe to allow mass travel from the US without the risk of importing large numbers of COVID carriers – and what testing and quarantine protocols will they implement for visitors.
You PPM lot are a bunch of oxymorons!!! Remind us again why we needed the port???
Vote them out.
What’s with all the dislikes on this comment? This website never had a large presence of PPM drones until recently… must be close to election time.