No sign of deficit at 2021 halfway point
(CNS): With the release of the government’s unaudited accounts for the first six months of 2021, there is still no sign of the anticipated deficit by the year-end, as government revenue continues to increase. The results for the first half of the year show a government surplus of CI$155.8 million, which is $23 million better than expected, and more than half a billion dollars cash in the bank.
Core Government revenue has increased by $125.6 million compared to last year, which was directly impacted by the COVID-19 lockdown. This increase is largely from financial sector fees and stamp duty. While government is still collecting more cash, its total expenses have risen by $45.6 million, which was largely due to the support given to displaced tourism workers and businesses impacted by the border closures.
Government’s cash position on 30 June was $211.5 million higher than anticipated in the 2021 Plan and Estimates. The accumulation of cash is a result of higher than expected revenues together with a delay in capital projects. The debt situation is also very stable, with a balance of $231.4 million. Scheduled repayments are being easily met and $34.2 million is due to be paid off within one year.
“While the second quarter’s performance has positioned the government to be optimistic about its performance for 2021, this will be greatly impacted by the continued economic effects of COVID-19 expenditures and fall-off of tourism related revenue and local economic activity due the extended closure of the borders,” government stated in the report.
The overall fiscal performance reported for all of government, including the statutory authorities and government companies, continues to look good, as the surplus stands at $142.5 million, almost 20% more than what was forecast in the current budget, because even though expenses are increasing due to the pandemic, revenue is continuing to grow.
A new unbudgeted revenue stream from the registration of Private Funds contributed a whopping $48.5 million, while stamp duty raised $33.8 million, as property transactions grew, as did the prices.
While import duty and other fees brought in more cash than expected, there was no revenue from tourism, and some other areas underperformed against projections, such as partnership fees, security investment business licences and work permit fees. But despite falling short of expectations, all of the categories still performed better than in 2020 and the financial sector still funds more than half of the government’s earnings.
But as government collects most of its offshore revenue at the beginning of the year, revenue is likely to fall further in the next quarter while expense are expected to rise. So far this year, spending is being fuelled largely by the support being offered to displaced workers and small businesses.
Transfer payments have grown by $35.5 million, or 140% this year so far, as almost $61 million has been spent supporting people through the border closures, and Parliament has already approved supplementary funding of $55.9 million to ensure the cash does not run out.
See the results in the CNS Library.
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Category: Government Finance, Politics
It is clear that mass market tourism was a noose around our necks. We are literally better off without it. Keep it away. Move upmarket Cayman!
At the rate PACT is burning through the cash we better tighten up our belts
What are they burning it on? I believe they are being very conservative?
11.47pm Try their salaries nd allowances, time now for another increase with the Civil Service added to the trough.
What about the public service pension liability ? Was that deducted ? Or we just not paying that this year ?
I suggest you listen to Minister Saunders explanation on that during the last sitting of the House. It’s on YouTube…
You are either extremely naïve or extremely stupid.
Don’t worry about it, 11:27 am….. Some of us are both….. but we ain’t worrying!
That might be what they call “voodoo accounting”. It works well until the tide goes out… then you will see who is swimming naked
Obeah accounting actually…Voodoo is Haitian.
They best try look a bit harder
That’s all fine and dandy but how is this helping your average Caymanian? Can government please try and do more to reduce the cost of living for the average Joe!? The prices of food and fuel are unsustainable and I cry a little inside every time I go to the chekout.. I know that to a certain extent it’s driven by supply/demand issues and transport (all made worse by COVID) but surely more can be done to make cayman more affordable? Una get enough revenue from us having to order things in and paying stamp duty because you won’t let us leave…
At the time I am reading this, 29% chose “angry”. I guess they are pi$$ed off that the public purse is still healthy four months after the PPM’s demise. Suck it up, buttercup!
Just wait for wote buying pay raises for all kinds of workers, stipend increases for friends and family board appointments , and complete abandonment of fiscal responsibility for the sake of keeping the best paid jobs these unprincipled politicians could ever dream of.
“abandonment of fiscal responsibility” – LMAO. You obviously do not understand how hard it would be to that, @23/08 at 4:37pm.
@ 4:37pm You do realize that the PPM is not in power anymore, right?
Obeah accounting actually…Voodoo is Haitian.
You mean the public purse is still healthy because of the PPMs actions.
Guess we are pissed off paying through the nose for everything as government skims off more money than it needs, and then instead of looking to hand it back and reduce the cost of living and doing business, looks for more things to spend it on.
24/08/2021 at 9:47 am: “Handing back money” does not help people. Poverty is a state of mind; someone could win $2M today and be penniless by Xmas, simply because they do not have the know-how to handle 2M! Teach a man to fish…
Would anyone like to give me $2 million? I think I can
handle it very nicely!!!
This country is financed by stamp duty, import duty but the biggest of all is the expat led offshore finance industry. Cayman could actually easily survive without tourism. Now open the border to fully backed residents – they deserve holidays and to see family and they fuel the economy.
And if financial services staff cannot travel on business, get their kids to school and periodically visit family and have an off island holiday, we are going to see that industry migrate to our competitors who provide all that as well as the tax free income. You think the hedge funds, the accounting firms and the law firms have particular loyalty to Cayman? Hell, even our home grown firms like Maples and DMS have extensive operations on other jurisdictions, and if it becomes too difficult to do business here, they will switch the focus of their activities in a heartbeat. Good luck with maintaining that surplus then.
Cash from foreign investment and real estate stamp… Two of the most reviled and criticised sources. Hmnnn, let’s beat up the expats publicly while we take their $$ privately: “Give me your $$, then leave as we don’t want you here…………..”
12.29 “We don’t want you here”. Only the mean ones like you.
How is 12:29 being mean? Because they tell the truth and you find it uncomfortable?
Thank you Progressives. The same will not be true three years from now.
Thank them for the crap, too. They earned it.
#creativeaccounting
cayman economy…a house of cards….
Actually, steel reinforced concrete and 130 different nationalities choosing to be here and for the most part working with Caymanians to make it stronger. Without tempting fate, we are also the ONLY country on the planet without Covid circulating. There is plenty to be proud of, and to celebrate.
@11:24pm..I guess you didn’t read the headline..We have one of the best economies in the world right now…and covid free to boot..
Show me one country nearby that can say that…
Yes thanks to Alden and his Government. PACT should make him a national hero and thank God they inherited this economy from his Government. Look at all the pay raises and bonuses and money for cleanup all of that didn’t happen since April.
This is no time to try to be funny, 10:02 am!
Thanks for the laugh, Anon 10:02 am…. I like the way things are going now. Poor Alden just couldn’t get things together.