Revenue rolls in but public spending set to increase
(CNS): The government headed into the final quarter of this year with a healthy and better than expected surplus, but while revenue is still rolling in, expenditure is now rising. As government entities make a final push to meet planned objectives for 2022, the current surplus is likely to be “significantly reduced” over the last three months of the year, according to a press release on the latest financial report. Costs will have to “be diligently monitored to ensure spending is not incurred unnecessarily” in the remaining quarter.
According to the government’s Unaudited Quarterly Financial Re,port for Nine-Month Period Ended 30 September 2022, the surplus for this year is currently running at $81.8 million for the Entire Public Sector, which is almost 50% more than had been forecast in the budget. Actual revenues have run higher than expected all year, with the government racking up almost $54 million more than expected for the public purse. This has offset increased spending and the losses by some statutory authorities and government companies, such as the health services and Cayman Airways.
In the report, officials said the third quarter’s performance had positioned the government to be optimistic about its performance and the state of public finances. However, “during the final quarter Ministries, Portfolios, Offices and Statutory Authorities will all make a final push to meet planned 2022 objectives and deliverables”, the report said. With planned increases in activity in both operating and capital, the current surplus will be significantly reduced.
Public spending is already higher than this time last year and officials said the savings over the first three quarters of this year are unlikely to remain at the current level in this final quarter. Vacant posts that are being filled, cost of living adjustments and delayed projects now underway will impact costs. The report also notes that the government continues to incur costs associated with the mitigation of COVID-19.
Government’s cash position remains solid at almost $394 million, but this is around $117.7 million less than anticipated in the 2022 budget after the finance ministry purchased over $280 million of US Government Treasury Notes, which is not counted in cash or cash equivalents. The cash position is due to the delay in projects as well as extra revenue, which means the bank balances may also fall during this final quarter of 2022.
Over the course of the nine-month period, the government’s extra revenue came from a variety of sources, not all of them beneficial to the wider community. Coercive Revenue alone has accounted for $162.2 million, an additional $44.4 million over budget, which includes $7.6 million in duty on cars due to the volume of vehicles being imported and congesting the roads.
Once again, stamp duty brought in around $21.7 million due to the continued high demand for real estate, which is pushing prices beyond the reach of ordinary people and excluding Caymanians from home ownership. The level of stamp duty revenue did fall below the amount collected last year, though it still exceeded budget expectations.
Meanwhile, work permit fees increased by $10.6 million to $12.2 million over the same period last year, as expatriate workers have returned in record-breaking numbers as the Islands moved beyond phase five of the border reopening and saw a stronger economic performance than expected. Revenue from the financial sector has also remained strong, with mutual funds and private funds alone bringing in a combined $8.7 million, or 14% of the government’s coercive earnings.
See the full report in the CNS Library.
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Category: Government Finance, Politics
I think I should take my family to Singapore.
Just a matter of time before good time revenues fall, expenses are at unsustainable levels and the UK will step in and put the breaks on.
There is a limit to the fines on financial services companies before they up sticks and move.
so you think “if we have to operate in accordance with the rules we’ll leave” should work? You should leave…you are incompetent and giving our financial industry a bad name.
Did they ever do anything to clean up their own government?
Ooh do tell what you think UK will “put the breaks” on?
You do know we have far greater clarity and policies than US & UK.
Tired of hearing that garbage.
Now PACT are spending like money can’t done not planning for the incoming recession that is about 1yr to 2yrs away.
SO TIRED of hearing that garbage… zzzzzzz
Caymanian Ministers are out-of-their-league: they have no clue what has happened, what is ongoing, what will come in the future. This does not bode well for our territory’s future – complete incompetence from our elected officials. BUT, these morons keep getting elected; fault lies with the electorate – US!
If you look all around the world you will see the same thing right now. It is the time of morons and morons are large and in charge. This is a normal human cycle and will change in time. Have patience and save up your money for the hard times this will cause and you will be fine.
And meantime PPM and now PACT have abandoned the well developed immigration system developed over decades to ensure Caymanians have preferential opportunity in their own country. Now we relay on handouts. Alldumb is a greedy stupid man….Squanders is just stupid.
Of course public spending will increase. Hand-outs increasing!
The like to keep the population “dumb and dependent”
Maybe an opportunity to work on a more social and objective social security system.
And single peer health insurance, eliminating for profit companies.
tax and spend it’s all pact know how to do (and pretty much what ppm did too)….zzzzz
read miller shaw or E&y reports….how many recommendations have been implemented???
Taxing?? You sound like a Democrat..They maybe spending but sure not taxing..They should never get too comfortable that the revenue will keep rolling in as taxing may have to start and then you will hear the complaining..
indirect taxes and work permit fees….never forget wp fee’s trebled las time cig could not balance books.
I remember that under Mac’s government. My WP fee was tripled.
omg are you that thick? You don’t even understand what you are saying or the original posters comment.
You seem to have a short memory because PPM and UDP were equally disgusting. We need new blood.
Not called taxes here. Duty. And the reason why Cayman Islands are one of the most expensive places to live on the planet. Especially for growing non Government sponsored Caymanians with a third world edumacation. It’s only going to get worse along with traffic, crime, etc, etc as Caymans leadership is already way over their heads. Plan accordingly. Good things coming up for those with money and intelligence. Bad things for those without.
The level of spending for such a tiny place is crazy. Whilst our revenue is so strong we should be saving for a rainy day. We should, by any rights, already have a huge wealth fund built up. Instead we seem intent on spending everything that comes in. On what? God help us if our financial services revenue takes a hit, an event that seems inevitable in the long run.
“…duty on cars due to the volume of vehicles being imported and congesting the roads.”
It isn’t the importation of cars that is causing the congestion; it is the increase in the population.
Things are going to get a lot more congested in January, as the accounting firms bring in their new recruits, the hotels continue to staff up etc.