CIG forecast to close the year with $22M surplus

| 15/12/2023 | 29 Comments
Financial Secretary Ken Jefferson and Finance Committee Chair Juliana O’Connor-Connolly

(CNS): After tracking huge surpluses for the best part of 2023, the Cayman Islands Government is set to finish the year with a surplus of $22.7 million, some $5.1 million less than originally forecast and far less than the $116 million it was sitting on at the end of the third quarter in October.

The finance ministry’s final predictions for this year’s earnings and spending by core government were presented in the 2024/25 budget this week. With less than three weeks until the end of the year, the CIG is expecting to have earned over $1,034 million, which is $56 million more than expected. However, it has also spent over $60 million more than was budgeted.

Speaking at the start of Finance Committee, Financial Secretary Ken Jefferson said he was confident that by 31 December, the government would meet the surplus, even after paying out the civil service Christmas bonus, as the revenue collected in December could be more than predicted.

The CIG’s predicted spending has been hit, as always, by the increased funding to the Health Services Authority and the Cayman Islands National Insurance Company (CINICO). In addition, it had to pay for transfer payments for higher than budgeted overseas undergraduate scholarship costs and the increase in Permanent Financial Assistance monthly payments from $950 to $1,250, as well as the recent increase in the ex gratia pensions.

Despite mounting healthcare costs, increased operational expenses for Cayman Airways and subsidies to the turtle farm, overall, the statutory authorities and government companies are now forecast to have a net operating surplus of $1.7 million for the year ending 31 December 2023 compared to an originally budgeted loss of $19.1 million

If those predictions had been accurate, it would have almost wiped out the year-end surplus. CIG accountants said this anticipated surplus by the SAGCs was a result of the economic recovery from the COVID-19 pandemic.

The economy in Cayman is expected to have grown by 3.1% by the end of the year. However, inflation is forecast to have run at 5.2%, which follows a rate of over 9.5% in 2022. This means that, although the rate of inflation may be slowing, it is still causing prices, already at record highs, to go up even more, putting a significant strain on regular working families.

In her Budget Address, Premier Juliana O’Connor-Connolly said that the government had tried to address the issue of inflation, even though it is fuelled largely by the global economy and external forces that the government can do little about.

“These inflationary pressures have become a heavy burden on the shoulders of our people, increasing the cost of living for them and their families. We have seen the unsustainable situation and have taken action to relieve this burden,” O’Connor-Connolly said, as she outlined some of the actions the PACT Government had taken to help the community tackle the cost of living, from free school meals to subsidising residential CUC bills.

Core government’s cash balances are expected to be $497.9 million by 31 December, which is $185.7 million better than the $312.2 million that was originally budgeted in 2021, when the 2023 budget was prepared based on revenue from investment, tourism and property-related earnings.

The Debt Service Ratio is projected to be 8.3% of core government’s revenue, which is less than the 10% maximum allowed, and the Net Debt Ratio is forecast to be 9.3% of core government’s operating revenue, which is a fraction of the maximum allowed 80%. This means that, as the year closes, the CIG should be in full compliance with the Principles of Responsible Financial Management, as prescribed by the Public Management and Finance Act, and the Framework for Fiscal Responsibility.

Documents relating to the government’s current public finances and the details of the 2024/25 budget are now available on the government website here.

See Wednesday’s Finance Committee proceedings below on CIGTV:

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Category: Government Finance, Politics

Comments (29)

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  1. Anonymous says:

    The easiest way to sell the public on a positive surplus, is to avoid discussing the stealing of tens of millions from the Environmental Protection Fund, drawing it down to just $37million.

  2. Anonymous says:

    Oh Nellie. Padlock the surplus. We’ll have to wait for Juliana to get an itch to spend all of this.

    Let’s see what our resident dictator dreams up next. Caramel apples? Gingerbread houses? Trips to Europe? Bonuses to the jury members that acquit armed robbers?

  3. Truth says:

    Talking about a small surplus but not talking about the HUGE debt says it all.

  4. Two Cents says:

    I’ve listened to many Finance Committees consider budgets but I don’t recall ever hearing a Chair quoting seven million eight hundred and forty-three thousand six hundred and seventy-four dollars as seven eight four three six seven four.
    I kept having to try to picture in my mind what the string of numbers was going to become – like $7,843,674.
    Can someone ask the Chair to please spare us her mathematical innovation; just tell us seven million eight hundred and forty-three thousand six hundred and seventy-four dollars. We don’t have the book in front of us like her and the members of the Committee.
    And if we were smart like her, we’d be making $300,000 a year too

  5. Anonymous says:

    Juju gonna gift the civil service brand new ski pants to zero this down.

  6. Anonymous says:

    $1B in revenue and only $22M expected to be unspent of that amount! Says it all about the financial management of these clueless stewards of the islands’ finances. We should all be very concerned.

    • Anonymous says:

      They’re raiding the national coffers to stuff their own pockets while they can….and leaving us, and the next government to deal with it.
      Uneducated and corrupt unemployables should not be allowed in positions of authority…hopefully voters will,remember.

  7. Anonymous says:

    I hope it is a surplus but even so 22 million is not really a lot! One national disaster like a category 3 hurricane would blow that out in a few hours. That is really not much to boast about. I guess 2 negatives could result in a positive!

  8. Anonymous says:

    I worked in government for a long time in another jurisdiction. If you had a surplus it meant you weren’t doing your job because that money was assigned for a reason and you were held accountable. In Cayman it seems to be an accomplishment

  9. Anonymous says:

    Being lucky isn’t the same as being smart. Tough lessons that cocky dummies have the opportunity to learn (sometimes the hard way) over time. In Cayman we call it: “time longer than rope”. Humility and smarts win over the long run.

  10. Anonymous says:

    You can say anything you want in this government, hell call it $50 million because at the end this bunch will blow every bit of it and more.

  11. Anonymous says:

    I came here a while back, saw a beautiful country which was the pride of those that came before me. Welcoming people, warm and ready with a rum and a plate of food. I sat with the old timers and heard the stories and felt their warmth.
    Now it’s gone. I get the glances like someone who’s done nothing and cares nothing. Take it from driftwood. I love your country. Get a hold of it. Stop this rot.

    • Anonymous says:

      Thank you. You sound like those whom we once welcomed here, and even courted. I am glad you love the place as we do. I don’t feel like the Cayman Islands still court your level. you care about the people…. therefore you aren’t part of the elite who fly here on private jets and expect to be catered to.

      Nope. You sound like the kind of people who we once cherished — those that weren’t born here, but fit in well, and loved the place and belonged.

  12. Anonymous says:

    how does spendmorekenny keep getting a million dollars for the dream bartender teaching plot of land next to the launch ramp in George Town when nothing has been done for almost two years when it was paid for…at what cost was that…a few million. joke…not woke. backhanders welcome by spendmore wastemore build a new dock honorable Kenny B. if you think your children have a future here…you best learn to swim fast cause ‘da island is sinking mon. stop the carnival new edition 2 2023. facts jack.

  13. Anonymous says:

    I’d prefer to here the Auditor Generals report than anything spouting from this latest rabble.

  14. Anonymous says:

    Ken Jefferson you should be ashamed of yourself.

    • Anonymous says:

      If Ken Jefferson has admitted that he cooked the books by not accounting for unfunded pensions and healthcare liabilities (amounting to Billions), how is he allowed to continue as gatekeeper of finance? It seems like the last several regimes have been openly colluding in deep breach of FFR by excluding this data. The ACC should be all over this, yet in Cayman, these shockers continue to be met with crickets.

  15. Anonymous says:

    one of the main reasons the government has a surplus is because the civil service personnel costs were managed so efficiently that $60m was saved.

    who do we blame for this?

    thank you civil servants. because of your savings the Government was able to spend money on pensioners and others persons in need.

  16. anonymous says:

    How can they say there was a surplus? Outrageous! The PACT took over with an ‘Emergency Loan Facility of over $300 million. The budget shows that all but $100M of it is spent. So that’s new debt of $200 million. The new UPM lead by Julia has added $150 million of new borrowing, and will be increasing taxes and fees by $130 million. So $200M +$150M+ $130M = $480 Million dollar shortfall. Sadly we are reverting back to UDP style finance. There is NO SURPLUS. And furthermore there is NOTHING to show for where they spent the money. The new Premier has just been named ‘Listener of the year’ in some competition no-one has ever heard of (Pay2Play).If she was listening she would hear 75% of the people begging for a fresh election so they can get rid of this bunch. Every last one of them made their demands for dozens of pet projects for their districts 2 million dollar parks (Kenneth) new schools at $120 Million. The list is long – all padding their budgets with vote buying opportunities.
    How can this even comply with the FFR? I’m sure it doesn’t. In a blink of an eye what this country has built will disappear. The crime is already started. Pay attention people!

    • Anonymous says:

      Brilliant 4.22. Thank you.
      And there we have it folks……..Lies, damn lies , and upm.

    • Anonymous says:

      Not to mention the unfunded Pension and Health Care liabilities.

      JuJu is truly in wonderland and Cayman is doomed to financial ruin.

    • Anonymous says:

      They could care less, as they will spend no matter what. Hell just go get another loan as big bucks Bush is there to lead the way.

    • Anonymous says:

      A small Budgetary surplus is relative to the Budget plan, not a reflection of the debt load, service, or retirement. There are billions in unfunded liabilities that CIG hasn’t put on the balance sheet because we’d breach FFR if we did. The UDP and PPM have proven through this ritual dishonesty that they are not good stewards of Cayman’s future.

    • Anonymous says:

      Because you account for the interest and repayments scheduled in the year it is due, not the lump sum.

  17. Anonymous says:

    That’s like one trip to Target for JuJu and Kenny.


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