Gov’t surplus surges to record high in first quarter

| 12/05/2023 | 78 Comments

(CNS): The unaudited financial results for the first three months of this year show that core government has racked up a record surplus of $235 million. The Cayman Islands Government collected $22.6 million more than expected, and public spending was lower than forecast, putting it in an optimistic position, according to a release. But the first quarter is always the best for the public coffers due to fees from the financial sector, so officials said that costs would be “diligently monitored”.

After the earnings and costs incurred by statutory authorities and government companies are factored in, the Entire Public Sector (EPS) reflects a total surplus of $231.7 million. As of 31 March, CIG’s net assets stood at $2.2 billion, with overall bank account balances of $512.8 million in cash and deposits.

The EPS surplus is $24.4 million higher than the 2023 budget anticipated for the period, a positive variance of 11.8%. While the SAGCs had a negative impact of $3.3 million on the overall surplus as a result of the unfavourable performance of Cayman Airways and the HSA, the combined first quarter performance for the SAGCs was $1.5 million more favourable than the expected deficit of $4.8 million.

This means that the EPS surplus increased by $21.7 million when compared to the first three months of 2022.

The money came largely from coercive revenues, as the government collected $455.9 million, which was $16.2 million more than it had forecast and $20.2 million (4.6%) more than it collected during the same period last year. The financial sector saw a better-than-expected performance in the registration of mutual and private funds, leading to an additional $8.1 million in fees from these two areas alone.

Tourism accommodation fees were $7.1 million higher than budget expectations as stayover guest numbers continued to grow. An additional $4.5 million more than predicted was also collected in work permit fees, which officials said reflected an increased demand for workers after the borders reopened and a stronger economic performance than had been expected.

Although expenses were on target, just $400,000 less than budget expectations, staffing costs were $8 million less than predicted and supplies were $6.1 million less. But spending by SAGCs was over $14 million more than budgeted. The government paid over $4 million more than expected to the Cayman Islands National Insurance Company (CINICO) and the Health Services Authority (HSA).

“The variance with respect to CINICO is due to higher-than-expected actual costs for Health Insurance for Civil Service Pensioners,” government officials said in a release about the first quarter results. “The adverse variance with respect to the HSA is due to actual costs for the Care of Indigents of $3.8 million exceeding the budget for this category.”

The budget line item for Tertiary Care at Local and Overseas Institutions was also well over budget by some $4.8 million more than was allocated for the start of the year, with total costs currently at $10.2 million, exceeding prior year-to-date spending by $1.9 million, officials from the finance ministry stated.

The CIG also spent $5.4 million more than it had forecast on Scholarships and Bursaries and an additional $1.3 million on Financial Assistance.

The government’s cash position was $512.8 million on 31 March, which included operating cash and deposits of $339.3 million, and reserves and restricted deposits of $173.5 million. The accumulation of cash comes from higher-than-expected revenues as well as a delay in capital projects. Meanwhile, the government’s debt balance stood at $496 million.

See the first quarter unaudited Quarterly Financial Report here.


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Category: Government Finance, Politics

Comments (78)

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  1. Concerned citizen says:

    Surplus on paper, not actually 235 million in a bank account somewhere right?
    I am suspicious of and confused by their accounting.
    One year every one has a qualified opinion, next year they all have unqualified opinions and surpluses.

  2. Anonymous says:

    How about saving some for a rainy day?

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  3. Anonymous says:

    and not one serious issue is being addressed by pact:
    traffic
    dump
    cost of living
    immigration mess

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  4. Anonymous says:

    Remove import duty on food.

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  5. Anon says:

    Yet there are stories of multiple non-profits owed duty rebates by Govt. Can’t get the $ legitimately due them, nor a reason why.

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  6. Anonymous says:

    Fix the damn dump.

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  7. Anonymous says:

    Never been a better time to build a cruise berthing facility

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  8. Anonymous says:

    Any unexpected surplus should be used to pay off the debt.

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  9. Anonymous says:

    More money, more ministerial sojourns.

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  10. Anonymous says:

    maybe buy another mosquito plane and hire a pilot

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  11. Anonymous says:

    Rising food prices a priority concern for UK, according to Bloomberg.

    Grocery inflation surged above 19% in March, according to data from the Bank of England.

    “The sustained higher price level represents a long-term cost for households and businesses, and this is one driver of subdued economic activity over the forecast horizon,” the BoE’s recent Monetary Policy Report said.

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    • Anonymous says:

      Ok then! I guess the Minister of Health can now implement the free healthcare for seniors and children. I am a senior, paying CI$501 to CINICO each month and receiving a mere CI$ 400.00 coverage for the year! Oh by the way, eye care and most dental care is not included. PLEASE FIX CINICO so I won’t have to line up at NAU. The savings I managed to squirrel away is almost finished!

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    • Anonymous says:

      Imagine what might happen when true ecological costs of meat and dairy are factored and government subsidies end, as they must. The ecological cost would be over $200 per hamburger patty just for water footprint. Add another $200 for the C02, and probably $50-60 for the land waste. We can’t afford to be meat eaters in so many ways, even with agricultural subsidies in place.

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    • Anonymous says:

      This is great news as now seniors can get free medical.

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      • Anonymous says:

        Why should they/anybody get anything for free, if they can afford to pay for it?

        Nothing, nothing is for free – someone must pay for it.

        In the Cayman Islands we can rely of the international financial services (IFS) industry directly (CIMA/ROC etc fees) and indirectly (bank fees, construction of offices, house, condos for employees, work permit fees, hotels and restaurants for business visitors etc, et al), but that may not always last – especially the way CIMA is killing the IFS Golden Goose……Maples’ decision and “Sterling insurance row back” is just the tip of the ice-berg….

      • Anonymous says:

        Maybe……………. at some unknown date.

  12. Anonymous says:

    Actually I simply don’t believe these figures. I fear some creative accounting is being done.

    There. I’ve said it.

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    • Anonymous says:

      Never believe everything a politician says. It is said that they hardly ever tell the truth.
      Well, that isn’t hard to believe!

  13. Anonymous says:

    And still they can’t manage to introduce a basic bus service. Unreal.

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  14. Anonymous says:

    Of course, with the amount of illegal fees they apply!

    Example 1. 1% duty CBC charges as INSURANCE on every single item imported! HM Customs (CBC) is in the Tarriff business, not Insurance. It is the responsibility of the transporter to ensure the safety of the shipment. When an importer has a loss or damage claim, it’s addressed by the transporter, not CBC. Illegal!

    Example 2. CBC Immigration section illegal retention of Repatriation fees paid for Work Permit holders! The employer of every single WP holder in CI is required to pay, to Government,the work permit fee PLUS a repatriation fee. The intent of the repatriation fee is that, should/when that WP holder leave CI, alive or not, there will be no public costs to the person returning home.

    Upon that WP holder leaving the islands, the fee already in hand to facilitate the said purpose is NEITHER refundable to the employer who paid it, nor to the holder to which it applies! If the holder uses it, he/she CANNOT return for employment in CI!

    So, Government with a “Repatriation Fee” in hand, it still falls on the employer or invariably, the returning ex-employee to fund their return!

    ALL of this I learned in protracted dealings with Immigration Horificers in regards to the roll over of two different domestic helpers! Illegal and absurd!

    I haven’t applied for a WP in a few years but if that has changed, someone please enlighten. I imagine if there has been any change, they probably ‘absorb’ it into the WP fee, inflating that and keeping the difference. Sounds like that would be a CIG “strategic objective”. Theft anyway!

    Those are only 2 examples, scouring our Laws would reveal dozens such illegal fees.

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    • Anonymous says:

      My pet peeve is they charge the same work permit fees to small and micro businesses as they do to legal and financial services. We wanted to bring in one specialist trainer so we could focus purely on training and recruiting locals, but the permit was over $7,000. Paired with salary, pension and health insurance commitments we just can’t afford it as a tiny local business.

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      • Anonymous says:

        You’re bringing someone in to focus on hiring locals… hmm. In any event the point is ridiculous, either you need the person and they add enough value to, at the very least, pay for themselves and their WP, or they don’t. The economics are no different if there are 3 of you or 300. Same job same WP fee. The FS firms pay huge WP fees for lawyers, accountants, managers etc…

    • Anonymous says:

      CBC charges duty on insurance whether it existed or not. Most often the carrier doesn’t insure the items – that’s on them, not CBC. Agree, a bit cheeky to charge duty on something like that though…then tailgating and warehousing fees.

    • Anonymous says:

      I brought goods on clearance from Home Depot which were discounted by 60% CBC REFUSED to accept the full 60% discount. Their policy is they only accept up to 50% discount so charged me duty on a value that was MORE than the purchase price. Highway robbery!

  15. Anonymous says:

    PACT might consider deploying part of this surplus as a one-time “inflation reduction” distribution to every hard working enumerated Caymanian voter as of a certain record date. Watch the voter register bloom. For the rest, pay down debt, relocate GAB to BT, sell GAB and glass house properties, fund the holes in public service pension and healthcare.

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    • Anonymous says:

      Uh and what do you imagine showering people in spare cash will do to prices? “inflation reduction” distribution? 😆

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    • Anonymous says:

      handouts are the Caymanian way

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    • Anonymous says:

      5.22pm Most voters are no longer native Caymanians so no.

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    • Anonymous says:

      Great, you want a freebie for Caymanian’s on the dole. Why not instead – fixing actual issues: The Dump; a Glass Crusher/recycler; traffic issues; poor education; etc… YEA, lets push for an “Inflation reduction distribution to every hard working… ” I simply couldn’t finish the sentence it was so repugnant. So typical of Caymanians. “Oh please, give me free money so I can sit on my a.s and do nothing.”

      You care about your country? – Stand up and WORK!

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  16. Anonymous says:

    Oh goody. Another excuse for politicians to spend even more of other people’s money. Can’t wait to read about a new million dollar study contract to one of the international accounting firms to tell them which government departments need to have increased budgets.

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  17. anon says:

    PACT government forever!

    • Anonymous says:

      “PACT government forever” you do realise we the public have paid for the higher cost of living in every category to help subsidize the government with this increase.

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  18. Anonymous says:

    Taxing imports at maximum inflation is a great way to boost profits!

    Bidenomics is great for governments!

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    • Anonymous says:

      Although expenses were on target, just $400,000 less than budget expectations, staffing costs were $8 million less than predicted and supplies were $6.1 million less

      So the two areas that are the direct responsibility of the civil service are showing huge savings. You have the nerve to criticize our hard working civil servants who take care of you every day.

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      • Anonymous says:

        There are many excellent civil servants – but for every excellent civil servant, there are two who are acceptable, and five who are are inept, wasteful, lazy and/or corrupt.

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      • Anonymous says:

        Take care of me..? LMAO

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    • Anonymous says:

      idiot

  19. Anonymous says:

    Ofcourse, the amount of duty they collect in exchange for nothing.

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  20. A Caymanian says:

    The reality of Government finances as they stand today is largely based on the groundwork and establishment of laws that cater to an offshore industry. This was done decades ago therefore neither; the PPM who have largely given away revenue in the form of Concessions for which no records are available (hmm sensitive) and who knows what else, or PACT who seems hell bent on imploding prior to the next General Election.

    Until any of these groupings and those to come can show a plan of action that decisively brings in wealth that flows in equal from the top to the bottom of the populace providing the ability to earn to all , then credit will be due. So you little Ministers who are rubbing your hands in glee your accomplishments to date are nothing to speak of so start working for your salary which will be taken away in just two years if we don’t see real progress from your governance over these precious Islands that is overcrowded and not really progressing.

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    • D says:

      Yeah progress for these politicians is cement and asphalt everything, destroy the mangroves, increase taxes for the average guy, make Caymanians homeless, robbries and sit in traffic day and night! Our way of life is diminishing so these same politicians can get their fat checks and pensions every month.

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      • Anonymous says:

        Don’t forget to take care of the special developer friends and give them lots of duty concessions!

    • Anonymous says:

      Yeah progress for these politicians is cement and asphalt everything, destroy the mangroves, increase taxes for the average guy, make Caymanians homeless, robbries and sit in traffic day and night! Our way of life is diminishing so these same politicians can get their fat checks and pensions every month.

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  21. Anonymous says:

    There is a huge issue here, ask anyone at a senior level in the Civil Service, every dept is being forced to make serious cuts to their 24/25 budgets. These cuts effectively impact the services they provide, whether it’s Health, NAU, Fire, etc etc. it seems as though the PACT Government is setting themselves up to be able to brag about having huge surpluses whilst not delivering key services to the public.

    This unfortunately is typical of a Government that is only interested in clinging to power and then getting themselves reelected to the trough again

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    • Anonymous says:

      That’s called fiscal responsibility and should be done everywhere all the time. You act like we get top dollar world class service from these guys and we don’t. So time to sharpen the pencils and tighten the belts.

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    • Anonymous says:

      CIG doesn’t fail on delivery of service due to lack of funds! You have the most funding per capita of just about any public sector in the world. You don’t fail to deliver service due to lack of head count. You have the highest number of employees per capita of just about any public sector in the world. You just fail to deliver. Every day.

      You work at a snail’s pace if you work at all; WORC and BCU are particularly abysmal. When you do decide you need to be seen to be doing something, far from serving these islands you make such utterly inane decisions you have to be stopped in court; hello CIMA. You have a billion dollar budget for 70 square miles and your public transport effort would be unacceptable in Sub-Saharan Africa. You have the second best funded education system on the planet and over half the kids you supposedly educate are illiterate or innumerate. Simple decisions that should take literally minutes take months. The inefficiency is simply breathtaking. You’re damn right budgets should be cut, and head count. These huge fiscal revenues aren’t going to last forever, not if the likes of CIMA ever have their way.

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  22. Bird says:

    It surging alright but for who ?A very tiny corrupt political cabal and their disciples and friends and family and that’s why their is no accountability or responsibility on how its been spent or wasted.

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  23. Anonymous says:

    How would you know if the is a surplus when half government departments don’t report…..jokers

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  24. Squealer says:

    Let’s not be like the UK and North Sea oil. Every penny spent and nothing to show for it.

    Please send Andre to Norway for a lesson.

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    • Anonymous says:

      You know they are just going to give it away…

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      • Anonymous says:

        Be fair. Corrupt and impoverished Jamaicans and Hondurans need our help! And the churches. Them too. We are a Christian country and love our neighbors.

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  25. Anonymous says:

    Yet insurance is going up. The cost of living is going up. Yet our way of life is deteriorating. Traffic is appalling and the dump gets higher. Do you think bragging about record surplus is making your average person happy? Deluded.

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  26. Anonymous says:

    But still can’t buy redundancy and ensure resiliency in MRCU mosquito control and weather radar🙄

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  27. Anonymous says:

    has to…taxes increased…pay renain same..lol…more money to build roads…ha ha ha

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