2021 public spending $186 million over budget
(CNS): Government was supposed to have spent no more that CI$764 million over the last twelve months, but largely as a result of the COVID-19 pandemic, public spending has soared. As of 25 November, the finance ministry was predicting that by the end of the year core government spending will have exceeded $950 million, some $186 million over budget.
However, the operating deficit for central government for 2021 is much lower and is expected to be around $29.7 million, given the increase in revenue, as well as expenses, which has offset the worst of the additional spending. But when government authorities and companies are placed in the equation, the entire public sector is in the red to the tune of almost $84 million.
Collectively, the statutory authorities and government companies (SAGCs) have run losses of more than $54 million, which is well over the original budgeted deficit of less than $17 million. This hole was originally expected to have been easily covered by an anticipated core government operating surplus at the end of this year of almost $75 million.
The news of the impending deficit comes after the third quarter unaudited results still showed government running a surplus at the end of September. But it appears the pandemic-related spending has adsorbed the record-breaking revenues that will be collected in 2021. Government will have earned some $82 million more than expected, but this is not enough to plug the hole created by COVID-19’s impact on the public purse.
The overall result is that for the first time in several years, the pandemic has driven the government to fall foul of the Principles of Responsible Financial Management, requiring the UK to step in to approve next year’s budget, which is also set to product a deficit.
However, Finance Minister Chris Saunders told his colleagues in Parliament on Friday that the UK had given the government approval for both the $29 million deficit for 2021 and the CI$15 million deficit budgeted for next year, given the situation relating to the pandemic, the fact government has cash in the bank, a low debt ratio and will be back in the black by 2023.
Despite the losses, this forecast operating deficit is still $69 million less that the PACT government, when they were first elected to office, had predicted could be the case by the year end, Saunders said.
“Starting out with the prospect of an operating deficit is not the most preferable financial result to be facing a new government,” he said. “Admittedly it has posed some challenges for the PACT government and has required us to refocus some of our planned goals and commitments,” he added, noting that a deficit was a breach if the public finance law.
“The United Kingdom is aware of the likely deficit for the 2021 financial year but has not sought in any way to control the government’s budget because it understands the deficit… is realistic in a global pandemic and has given is support,” Saunders told Parliament, adding that PACT was committed to prudent management of public finances as well as delivering on its promises to the people.
Deficit earnings were fuelled by import and stamp duties as well as revenue from the financial services sector, mitigating the shortfall from tourism, but Saunders said that it was the pandemic that was undermining the finances.
COVID-19 expenses account for some $115 million in spending that was not budgeted for when the 2021 spending plan was drawn up by the last government. The stipend alone has cost the public purse around $60 million, testing and Travel Cayman cost over $47 million, while another $2 million was spent on benefits for the vulnerable and $5 million for businesses.
Tropical Storm Grace ran up a bill of over $10.5 million that had not been budgeted for, and government has also given away an additional $23 million in public cash to charities and NGOs doing social work in the community.
He said the losses by the SAGS are led by the airports authority, which is expected to lose $28 million, and the Cayman Turtle Centre, Expected to lose $10.7million. The Health Services Authority and the Port Authority are both set to run deficits of more than $7 million. CINICO and Cayman Airways will lose over $3 million each.
But even though these authorities are losing money, they were necessary for the “Cayman miracle to work”, and while they have inbuilt challenges, they provide essential services and were economic enablers, Saunders said.
However, with a cash balance at the end of this year of CI$304 million, which is CI$20 million more than originally forecast, the final deficit will be covered and government remains compliant will all the other requirements of the law. Saunders said like all countries, Cayman had suffered as a result of the pandemic and there would be new challenges ahead in 2022 and 2023.
See the full details of expectations of the 2022-2023 budget starting on page 19 of the Plan and Estimates document here in the CNS Library.
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Category: Government Finance, Politics
Fix the damn dump!
Stop wasting paper Mr Minister! Save a tree or two. Email the information. You know all on a don’t read that much paper. They are piled high for looks like big ring binders on all onna office shelves.
A great WAY to help include:
1. Reduce the MPs salary by at 10% or more like yesterday.
And equally important
2. Stop ALL GOVERNMENT WASTE OF THE PUBLIC FUNDS.
These debts were incurred by the appointed Deputy Governor who helms the deficient administration of civil service operations, aided and fueled by decades of predictable unaccounted PPM and UDP debt-financed largesse. Bad as it is, it still omits unfunded civil service pension plan and healthcare funding liabilities.
Are we going to gloss over the mountain of paper sitting next to these “stewards of the environment”. A picture is worth a thousand words. They could start by taking away Kenneth, Sabrina, Bernie, Jay and Heathers stack because they won’t even bother reading them!
Agreed the idea that any of them including Saunders read even half of that is laughable.
Giving developers millllions of dollars in tax breaks also affects the income for the Islands as well folks… This has been going on for years. Those tax breaks, I am sure, trickle down to those who are offering them as well. Gov’ts sadly have forgotten, they work for the people…
Especially when there’s the added jaw-dropping admission that nobody is bothering to keep track of scandalously loose waivers and developer incentives. Former presiding Finance Minister is now leading Public Accounts Committee!?!
Pompous Popinjays – all but Roy, Wayne and Andre are (financially) illiterate.
The rest must wake up every morning (afternoon?) wondering how they won the lottery to end up where they are.
They are so far out of their depth (and debt, no doubt) playing monopoly with our and our generation’s to come’s REAL money. But hey – this is what you get with Single Seat/First Past The Post/Winner Take All/One Man One Vote promoting “West Kingston” style politics. The voters are to blame for electing what is sitting in the “Parliament” – no one else, but the electoral system sets the whole thing up to fail/embarrass as is on Full 4K UHD display with this budget introduction speech.
NONE of the class of 2021 have a clue about the real economy, the island’s international (financial services) business that directly drives CIG’s coffers but indirectly drives the construction industry and upper end tourism and how fragile it all is, precariously balancing on the knife edge that is CIMA and their every expanding (unnecessary, irrelevant and counter productive) regulatory overreach.
Our “MPs” keep shuffling the deck chairs in hopes that the band keeps playing….
I’d agree with you, but Wayne has shredded any notion that he has a level of competence in finance or any other matter.
He really has been that bad. Maybe he still understands but he doesn’t have the leadership ability to manage his “party”. But that is what happens when you make a PACT with the Devil(s).
Wayne needs to play his fiddle harder or he will never get his soul back…
29 @ 11:12pm – Populism! Please note that Cayman’s political system is solely based on popularity – and that is gained by how many favours one can proffer supporters. Nevermind that one could be a crook or a moron (as presently evidenced)!
There is no idealism, no core principles, no political or civic platform followed. So, apart from the cash, nepotistic jobs, fridges, turkeys, bicycles (let’s not forget the kids), all the other promises are simply lip service!!
PACT is the worst collective of moronic populism in a long time, though!
I love Cayman, my home where I was born 60+ years ago. Thank God I’m in my down-hill years and may not have to witness what our little Cayman will be like in a few decades! Anyway, who will care? Where will the accountability be? These morons will all be rewarded!
Jim Bodden the pirate sold out Cayman, introduced Lodge control of Govt, introduced populism & hand-out politics, created the ‘entitlement’ mentality (“because you’re Caymanian” – yes he did), introduced political interference, nepotism, introduced hate of foreigners (esp. Jamaicans and “Limeys” he liked to call Brits) by some Caymanians (yes he did), and he was rewarded with being made the first National “Hero”. McKeeva Bush did that and also completed Jim’s sell-out by giving away status to 3500 people and approx. 15,000 of their dependents (yes he did) and he’s waiting in the wings to become a National Pirate as well (God forbid).
The families of the other Heroes in the square should relinquish their status – being paired with Jim Bodden!!??!! I speet at the sound of theese name…Ptuu!!
You do know the financial industry pays for everything right…!? Not sure what the rush is on opening for tourism but to keep greedy developers fed. We have more than enough to take care of our own even with stipends to ex-tourism workers. Happy the borders are opening but this government is a piece of work for sure.
How much did they spend on Travel Cayman? Multiple accounts of them failing. This is ridiculous.
What does Marco Archer
Maxine Bodden
Gilbert McLean
Have in common. They all ran against members of PACT and are now on Government Boards.
Yup! PACT making sure they eliminate competition by wrapping them in the PACT blanket … none of this is coincidental
125 people allegedly employed, still not keeping up, leaving travelers stranded, like that woman who was refused to board, and blaming HER for not getting email they didn’t send on-time. It is easy for even an entry level independent IT professional to find out when the email was sent. That woman’ expenses must be reimbursed and apology offered. At least.
Now unna gon’ see some shit! Open season on public funds!!
Unna thought Big Mac was bad?? Just Little K and Big J alone with their populist handouts (gift scholarships, free pilot training, farm grants to grow a few pepper trees in your old bathtub, etc., etc…) will broaden the entitled class, and of course Lady S and Mr. B from West will be on board…looking at them then at each other…”Well..if that’s what dey gon’ do, we betta keep up”.
Meanwhile, the wise Mr. A will be grimacing and trying to butt in and Hon. Wayne will be waving his hands and shouting “slow down guys, slow down guys, that’s not how this is supposed to work. Remember the T in pacT? What we should do is…” “Yah Wayne, da what you think! I promised my people in (insert constituency here) dat I gon’ take care o’dem. Wha’ you mean? I not worried ’bout Winspear! Me and de Guvna cool, man!”
“Anyway, please excuse me Mr. Premier but I have to go inspect a new fleet of Suvs for MY Ministry and the Minister here asked me to join her and her CO for lunch at dey friend restaurant….we got’ go! Ah….by the way, I not get my Cabinet credit card yet so I guess we can just get a purchase order for lunch, right? I’ll get MY PA to get it. Later!”
And the band played on…
Total mess and will only get worst!
How many people would still be with us today if the governmernt spent 187 million on cancer and heart related disease treatments?
Zero
The best comment!
Exactly!
and fight obesity
You seriously need to look within your own walls and let a lot of top earning driftwood go.
Save a fortune there. Yes im serious, look around you.
but someone has to do the work, and its the driftwood that ends up doing it all.
get rid of them and we might end up having to do it and then have work late everynight to 4pm.
Does anyone really believe the loss at CAL is only $3M? Is that before or after they write-off the landing and airport fees that get “paid” to the CIAA.
Add a zero to that figure and then double it.
For 186 million dollars they could have built 1000 residences for 1000 families that are living in poverty. They could have chosen to remove duties on food to help the needy. Instead they choose to flush money down the toilet. Shame on this government and anyone that works for them, I am not sure how they sleep at night.
they sleep at night on king size beds……..
I do realize this is a typo on the part of CNS, the third quarter auditioned results but when you give a job to the first incompetent who auditions for it this is the type of results you get.
Gilberts sudden $4,000 per month pay rise for the job of Chairman of UCCI doesn’t register as a blip in the overall scheme of the total losses, but PACT’s response and their attitude and approach to governing is indicative of the entire problem. Throw away $5 million here, and $10 million there, and pretty soon it adds up to real money.
CNS: Apologies! Corrected now.
I haven’t audited them.
CNS: Sorry again. It’s now correct (hopefully).
Never been a better time to drop Turtle farm.
No we don’t need tourism dollars. Leave the borders closed forever it will be fine. Financial services and construction will fund everything. Idiots. Do you really think they just now figured this out?? BS, they have known this for months.
These guys would be out of their depth in a puddle and ya’ll threw them over the drop off. Seriously, you voted for these people, most of them have ZERO financial or legitimate business experience. What did anyone expect?
However, some may have illegitimate business experience!
“He said the losses by the SAGS are led by the airports authority, which is expected to lose $28 million”
Found where the parking fees are meant to go bobo.
When Payrise?
One question why $47 million for testing & travel Cayman. Seems a bit high!
why does Travel Cayman still exist?
125 people are employed there at Cayman Travel…. imagine what that manpower could do elsewhere where needed. Overstaffing in government is a joke. What do those people do? It’s all make-work projects, the Cyaman Islands specialt.
How can they possibly have 125 people working for Travel Cayman?
This is crazy. This should have been farmed out to the private sector and could easily be done with 25 people using the correct software.
Reading about Travel Cayman today and tourists at JFK Airport sounds like a total disaster.
You said working, you mean employed. There is a difference.
Saunders has to pay his BFF wife for pretending as though she is doing something. Shut Travel Cayman down, as it is NOT NEEDED now. It never really was needed at all, as HMCI could have been the resources that was used. But I will give credit that it served some kind of purpose up to Sept. 30th- now it’s just an overloaded agency with red tape and inconsistencies.
Listening to the MP from NS, is there any wonder they have to borrow. This group has no clue and no moral compass, and lack any degree of common sense.
Add another $500 million to the cost of covid covered by pension funds meant for retirement and that doesn’t include lost contributions.
It’s reasonable that covid cost the government a lot more money than was anticipated. It’s also lucky that it coincided with a large bump in revenue.
That said, these guys spent 60 million dollars on handouts without requiring people to demonstrate that they were unemployed. And they continue to do so!
That is absolutely staggering financial mismanagement.
Put in place by the previous government, PPM. And they didn’t even ask questions just gave it out.
it is if you think if 1,000 people were given handouts, they would have received $60,000 each!
Not bad for sitting around
When I plan my finances I budget for unforeseen expenses and if I’m lucky enough not to bed it then it’s a bonus. Yes, “Grace” was unforeseen but seriously? We should ALWAYS plan for storm related expenses…SMH
I wonder if the reason could be the 34 or more people this government has hired since April and the high salaries which are being paid to many such persons. How many Deputy Chief Officers are there? How many people have been promoted with huge salary increases? Inquiring minds want to know. We have a bonus of $500 being given to many people who do not work because the government does not compel them to. How many employment settlements has the DG and POCS made? One which recently cost government nearly three quarter million dollars.
Civil service is controlled and managed by the DG, not the elected Government.
The Civil Service is neither controlled nor managed, so I think you may be wrong on all counts.
Blame it on the ‘rona.
No. Blame it on the Civil Service. They are wasteful and inefficient. They will literally bankrupt us.
Blame it on the elected government. It’s their chosen policies and projects that gets funded.
I prefer to blame it on the boogie…
or the Lodge!
Or Dart. Don’t forget the cabal too.
Expats…..it’s always the expats!
Just the Canadians though!
As always a predictable comment from a conspiracy theorist, who is either jealous, mischievous or plain dumb and ignorant.