PACT predicts future surpluses

| 14/07/2021 | 59 Comments
Cayman News Service
Finance Minister Chris Saunders delivers SPS statement to Parliament on Wednesday

(CNS): The finance minister has predicted that the government will be able to cover its operating costs throughout this administration, with 2021 being the only exception. Addressing Parliament on Wednesday as he tabled the 2022-2024 Strategic Policy Statement, Chris Saunders has said there will be no new revenue raising measures in the coming years but government is expecting to increase borrowing this year and next, as it accesses the line of credit negotiated by the previous administration to steer the country out of the COVID-19 pandemic.

As a result, government debt is forecast to increase to just under $500 million at the end of next year but will fall to less than $400 million by the end of 2024, and with the exception of 2021 when there will be a significant deficit, government will adhere to all six principles of responsible financial management and compliance with the Framework for Fiscal
, including the debt ratio in each year from 2022–2024.

Saunders has also predicted a quick return to positive operating surpluses, with a forecast surplus of $25.5 million in 2022, then of $34.3 million in 2023, and finishing with a $65.2 million surplus in 2024. He also plans to ensure there is cash in the bank over the next three years.

Despite the impact of the COVID-19 pandemic, Saunders said the PACT Government was committed to maintaining fiscal prudence. The more than $2.7 billion of public spending during the three-year period covered by this SPS would be financed by the performance anticipated in the financial services sector, the local real estate market and the reopening of the borders to stay-over tourism. He said the financial services sector alone is expected to contribute revenue of $1.1 billion over the three years from 1 January 2022.

Among the numbers in the SPS, officials point out the uncertainty however about the economic impact of the COVID-19 pandemic on this year’s financial targets, including restrictions imposed to slow the spread of the virus. As a result predictions for 2021 call for a deficit of $15.8 million, some $90.5 million lower than the $74.7 million surplus originally budgeted.

The fall-off in revenue from tourism is countered by the financial services, which means the deficit will be less then previously anticipated. But with the increase in spending on tackling the pandemic and supporting the tourism and other sectors comes the ever-growing spending on healthcare for the under- and uninsured.

The line item “NGS 55 – Tertiary Care at Local and Overseas Institutions” is sucking up most of the $15.3 million in additional spending to non-government suppliers, while the Health Service Authority will be receiving the bulk of the $25.2 million in additional spending to Statutory Authority and Government Companies.

But in 2022, Saunders has committed to getting public finances back on track, with a year-end surplus of over $25 million.

“The revenue forecasts do not include any new revenue measures during the SPS period,” the document states. “The forecasts assume the ongoing successful prevention of the transmission of the virus and are therefore more dependent on assumptions about future developments than normally is the case. Revenues are expected to increase over the SPS forecast period (2022 to 2024), surpassing pre-COVID 19 levels.”

Saunders also said that the policy statement underpinning the budget predictions was built on the PACT Government making the necessary steps to make people’s lives better in meaningful ways. “The PACT Government has crafted this SPS on strengthening our pillar industry of financial services, rebuilding and improving our tourism industry following the devastating impact of the COVID-19 pandemic, and diversifying our economy through new and developing industries.”

See the full SPS document and the minister’s speaking notes in the CNS Library.

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Category: Government Finance, Politics

Comments (59)

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  1. Anonymous says:

    Here we go; no government wants to use an “inherited” initiative and so, the public purse continues to pay for studies to fix this or that problem when we were already told how to fix it. I am not paying any politician- past or present – to have battles of wit. I want children to get a solid education! Health care that I can afford on my middle income salary and a pension income that will last longer than 3 years. I don’t care who commissioned the study that showed us how to go about achieving all that – I paid for the study, anyway.

  2. Anonymous says:

    What about the dump?

    • Anonymous says:

      What about it? fAbout a week after the election PPM signed with DECCO to cap it and get the plant going. Now we’re waiting for that to start.

  3. Say it like it is. says:

    Not a word from Mr Saunders on how much taxpayer’s money is being gifted to CAL, why all the secrecy, do they have something to hide?. No accounts for 3 years!.

  4. Anon says:

    PACT are living off the progressives stance on pro-development and the preconstruction projects now coming into fruition
    Stamp duty income to government has never been greater
    Now that the policies of PACT to destroy the tourism industry are known .They better be careful that they don’t bite the hand that feeds you, with their anti development rhetoric.
    You can’t lord around saying how wonderful you are when it was the previous governments policies that kept the money flowing in !

  5. Anon says:

    Who does the government borrow money from?

  6. Anonymous says:

    Will believe it when it happens. Good talk is just that, good talk.

  7. Anonymous says:

    garbage from saunders with no detail provided on how his magic future suplusees will come from.
    all i know is cayman is losing $15-20m per month right now and gig has no plan except borrowing.
    tax, spend, borrow….the no-plan-pact plan.

    • Anonymous says:

      Yes. But once foreign nationals stop receiving stipends and support from NAU, the books will balance just fine.

      • Anonymous says:

        It is a National scandal and almost certainly illegal. So much is being given to those not qualified, all while Caymanians in need are being told there are inadequate resources to help them.

      • Anonymous says:

        11.15 you mean Jamaicans their children and grand children and recently quietly added Hondurans.
        Say it like it is .

        • Anonymous says:

          Sure. Poor (and some not so poor) people from all over who are imported, unable to sustain themselves, and getting a free ride on our backs, all in breach of Cayman law.

  8. Anonymous says:

    Mister McSpeaker – please enforce a “respect” rule for ALL Members of Parliament. Respect the persons doing ANY presentation and STAY AWAKE!!

  9. Anonymous says:

    14@8:05pm – Do you really believe most Cayman politicians pay much attention to global affairs? Especially this bunch of novices? Perhaps they MAY read a bit about pandemic situations worldwide but international policies which will/may affect global economies? Really?

    I was told by a former Minister that he (read they) did NOT read the posts on this and other local commentary forums so as to know the pulse of the people locally. So you really think they keep up with world affairs??

    Morons in charge!!

    • Anonymous says:

      Yes, and they have been around for years! And one told you he never read people’s comments. That sounds like it might be an untruth !

  10. Concerned native says:

    I am appalled at the insensitive and uninformed commenters! The PACT hasn’t been in office 100 days yet and we are ranting and raving. Well the PPM has been in fir 12 years (8 consecutively) and they have surprised the local people to the extent we’ve lost 100s of people to other countries and a massive and unsustainable development give away that is screwing the locals. PACT please develop a long term development plan and move away with this hit and miss development stupidity!

  11. Anonymous says:

    Chris, please start that sovereign wealth fund. Cayman needs it for the future!

    • Anonymous says:

      Some of us pleaded for a Sovereign Wealth Fund to be created back in the Jim Bodden days when the money started flowing in from condo development but Bodden and his team paid us no mind. It could have had billions in it by now.

      • Anonymous says:

        It might have had millions in it, but it would not have helped me. Just the big shots. You know who gets the money here.

    • Anonymous says:

      Imagine If they invested in Bitcoin

      There’s no point collecting.US $, the Americans just print it from nothing.

  12. Anonymous says:

    Who knew lock downs and travel bans are the key to economic recovery.

    Obviously we should lock down forever!

    These guys are clearly more brilliant than world economists.

  13. Anonymous says:

    Can anyone tell me why the “independent” not-a-party PACT is all wearing matching ties and clothes in the LA?
    If it looks like a duck…..
    Fool me once!

    • Mallie says:

      They went online and got them ties in bulk from Ross Dress for Less.

      Didn’t the Finance Minister say a few weeks after they took office that the PPM had left the country broke? If so, where now has all of this money come from to be projecting surplus and not knowing what the future holds i.e. possible lockdown again with the rising COVID cases or God forbid another major hurricane. Add to this, the proposal to give civil servants a one-off payment of half their salary sometimes at year-end. Would it not be more financially prudent to adjust salaries up by 5%? Just asking as I am no accountant.

    • Anonymous says:

      It’s absolutely necessary when you appeal to the lowest common denominator. Most party “supporters” have to look at the clothing to decide whether they have to applaud or boo after hearing a speech.

    • A. Decker says:

      WTF! You got something against ducks?

  14. Anonymous says:

    Que the PPM bloggers…

  15. Anonymous says:

    Well now we get the real picture from the PACT and the promises they will make good on. Max out the credit line that PPM secured for emergencies and dig this country into a $500 million dollar debt .What happens when we actually have an emergency like a hurricane, earthquake, disturbance like we are seeing in neighboring countries.
    No new fees, dozens of new social programmes that are free for a third of our population and no additional revenues to pay for it. Spend it quick Mr.Saunders while that loan is hot!

  16. Anonymous says:

    Joe Biden 15% global corporate tax is going to have huge repercussions on Cayman starting 2023. I’m shocked they are not talking about it

    • Anonymous says:

      It’s not going to be that big of a deal. Calm down and focus on real issues.

      • Anonymous says:

        It won’t be if CI ignores it and tells Biden to mind his own business (country).

        • Anonymous says:

          Ha-ha! Biden has no idea how to mind his own business………… or anything else, although he got his son a high-dollar job at an oil company in Croatia, if I’m not mistaken.

    • Home grown says:

      Blah blah blah.

  17. Anonymous says:

    Adopting Bitcoin would bring so much wealth and jobs to Cayman.

    • Anonymous says:

      I’d love to know why anyone would downvote this. Most of you are peasants who have to work for a living. Haven’t you done so well in life.

      Stay humble stack sats

      • Anonymous says:

        As caymanians we are very much slaves to tradition and refuse to break out and try new things. Also, the big finance players here will never want to implement a decentralized approach to anything so as to never lose grip on the control they have, but eventually it will come to pass and more than likely this country will be struggling to implement things rushed and without proper understanding.

        I’m pretty sure most people have no idea about blockchain and the benefits it can bring to the financial sector. Cayman can look to be the one chopping down the bush instead of waiting to travel the path someone else made, but thats asking too much for this country. DeFi can completely change the game as we know for the benefit of the people instead of those who have sold their morals to gain centralized power.

        I always found it strange, that most humans understand money makes the world go around but then choose to never educate themselves on financial systems. Maybe we need proper financial education in schools at the 4th-5th form level.

        I would urge everyone to read up on blockchain and understand what it is. It will take root whether its done above ground with the acceptance of the elite or underground. Educate yourself and stop relying on other people to take care of you.

      • I am a PROUD Peasant says:

        Anon 1:17PM- you arrogant and obnoxious piece of shit- how dare you call people peasants. Don’t ALL people work for a living?? What have you done to earn yours? You are a racist asswipe at the very least. I could give a rats ass where you are from but suggest that if this country is so bad, that you pack yourself up and jump on the next available flight out of the ‘peasant’ country.

    • Anonymous says:

      Powell (head of the federal reserve) said yesterday on live TV: when the US CBDC is ready, there will be no need for stablecoins or cryptocurrency.

      Let’s stick to real tangible things that don’t have ML,TF and PF connotations – I.e. that do not bring the jurisdiction into disrepute on the international stage.

      We are already stained with Binance’s parent co being registered here.

    • D. Truth says:

      Sounds like bullhockey to me!

  18. Anonymous says:

    If Chris Saunders adds one and one and gets a result of two I would suggest that you get a reputable accounting firm to verify it because more than likely it’s wrong!

    • Anonymous says:

      If it’s anything to add, JuJu seems quite unenthusiastic, caught her napping again CNS!👍There are many instances of “expected to bring in” in that report, might help to run it by an independent sage as they might have a better crystal ball.

    • Anonymous says:

      Be objective, can you count past the dollars in your own pocket and look after the country you live in? If Chris Saunders counts yours pocket he will need a accounting firm. Build not destroy

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