PACT forecasts CI$15M deficit for 2022 budget
(CNS): Government is expecting a net deficit of CI$15.8 million for the Entire Public Sector in 2022 as a result of an anticipated loss by public authorities, but Finance Minister Chris Saunders is predicting an overall surplus of over $8.5 million in 2023. In the Budget address delivered Friday, he said it was not ideal to start off with a deficit but the UK has given permission for Cayman to go into the red, given the global pandemic and based on the return to a surplus the following year.
The losses are expected at the airport, Cayman Airways, the Cayman Turtle Centre and the port. The budget forecasts earnings of $940.9 million and core government spending of $906.8 million next year, while in 2023 it is expecting to collect a whopping $978.1 million and spend a record $933.4 million.
Setting out PACT’s spending plans in Parliament on Friday, he said that there were no new fees or taxes but government was cutting some duty on baby food, formula and other products, including diapers, as well as feminine hygiene products and adult protective underwear.
The minister said government was expecting to see these duty reductions passed on to the public but revealed that PACT would be bringing a consumer protection bill during this session of Parliament that would make sure that these savings were passed on and retailers were prevented from exploiting the public.
He warned of challenges ahead as a result of the global pandemic, but said PACT had a clear plan to manage the financial resources to use them prudently while achieving its main objectives. “This budget is about providing our people with the opportunities and tools necessary to build the best life that they want for themselves and their families,” he said. “This is not going to be an easy process.”
Saunders said that one of the major expenses for the next two years would be personnel costs for public sector workers, which is forecast to be almost half of all public spending — $437.2 million in 2022 and $459.3 million in 2023, which will include spending on more teachers, police officers, fire fighters, CBC staff and prison officers, as well as an increase on civil servants’ health premiums.
The finance minister said the government would be dipping into the line of credit negotiated by the previous government to help cover the continued additional spending on COVID-19. While government has been able to fund the pandemic costs to date from its reserves, it will need to borrow over the next two years to fund capital projects and prop up statutory authorities and government companies. Saunders said he expected to borrow $299 million next year and $50 million in 2023.
But despite the borrowing, the finance minister said the country will remain within the net debt ratio provided for in the Public Management and Finance Law.
CI$61.5 million will be spent on social welfare programmes and support for young people, including 2,500 scholarships per year, as well as financial assistance costs, such as the continued tourism stipend, cash for the most vulnerable families as well as seamen and veteran benefits.
He said government believes that public sector capital investments are an important and necessary catalyst in the development of the islands and it will be pumping well over $300 million into public projects over the next two years, including schools, the waste management project, the acquisition of land for conservation, infrastructure, upgrades to the prison and the courthouse.
Money would also be invested in the Housing Trust to build affordable homes for local people to address the national problem relating to excessive property prices.
Check back to CNS for much more on the budget, further the details of where cash will be collected and spent, and the current state of public finances.
See all of the budget documents in the CNS Library.
Watch Saunders deliver the Budget address on CIGTV below:
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Category: Economy, Government Finance, Politics
Government is a real mess. Some areas not enough staff, and others more than needed, rebalancing this is really required for greater efficiencies of scale. Plenty of arbitrariness, there is no rational reason for many things. The PACT administration has a huge wheel to turn and get moving after the PPM who were not for the Caymanian people, except for the Minister of Education.
What a mess they have to clean up, and it will not be done overnight so Caymanians you have to be very patient.
PACT – I guess none of you though of looking into new streams of consistent revenue? Inviting light, clean-energy industries? Regulating marijuana and making it a revenue stream (at least taking away the legal-related costs of minor marijuana offences – RCIPS, Courts, incaceration), etc., etc.,
Tourism and finance have been the two pillars of our economy for almost 60 years. The only structures which can stand on two columns are very THIN ones!!
PACT let’s just give you all greenhorn and barely capable Cabinet the benefit of the doubt this year – pandemic impact, “we’re new and don’t know the processes yet”, “we inherited a mess” (typical excuse of any new Govt), etc. but from next year’s budget on you all better come with some good forward-thinking, innovative and broader-scope goods!!!
Nobody starting any legitimate business in the Cayman Islands can even open a bank account these days. Any USA investors, and forget it! You might as well all be Lex Luthur in the eyes of the banking new accounts onboarding depts. All of our class A banks have paid fines and signed settlements for THEIR misdeeds, which effectively penalizes and snuffs any new endeavour before it can even get started paying its bills, unless you are willing to pay some extortionate monthly “compliance” fee along with a non-disclosure agreement. Insane.
So that sounds like the last nail in the coffin for that “our economy is 50% tourism and 50% financial services” bullsh#t. It’s more like 20% tourism, if that.
Just shut down Pedro, The Turtle Farm, Cayman Airways and there would be a surplus. Which could be used to train Caymanians for better paying and more rewarding jobs. And support social programs. And be better for the environment. Are you listening Wayne?
For starters, CIG can’t afford to continue to use itself as the employment agency of last resort for far right creationists, misc. unemployable, double-dipping, and least accountable. They need to lay-off dept heads that continue to fail to deliver proper accounting for our money. They need to dismantle the culture of opaque stand-alone SAGCs acting out their business conflicts. Franz isn’t going to do it.
There was always going to be some sort of recession caused by shutting the island down(Except Civil service). The only questions unanswered are when will it hit, how bad will it be, how long will it last, and most important will the Civil servants survive? We know CIG will.
Great, probably a good time for a raise for the MLA’s
They’re probably already awarding themselves “hazard” benefits without telling us about it.
Get rid of the turtle farm! budget balanced.
Can’t get rid of it until it is payed off in about 100 years.
Or sell more turtle meat.
yes! Lets eat all the turtles for Christmas.
Again
As a Caymanian, I’m not sure if I want to stick around and see how this will inevitably end. Thanks PACT for ruining our country.
What??
The PPM were expecting a 98.3 million dollar deficit for 2021 and a 59.6 million dollar deficit in 2022
Pact are living off borrowed money, “surplus” is misleading.
If I borrowed $10,000,000 I could brag that I’m a multi millionaire, forgetting that I owe $10, 000,000.
Instead of suggesting trying to close the Turtle Farm, we have an opportunity to open more business in helping the environment. We could create a conch, lobster or shrimp farm. Close the pools and use infrastructure already there. This would help children in the future to still maintain our culture. 10% could be released to the sea. We could use the swampland to produce other types of farms such as crabs, crayfish or rice farming.
Cruise tourism is dying, sorry. Most people who are in tour and transport business are older than 60 years old. Average life expectancy is 83 yo.
I can’t believe all children need to be fed breakfast and lunch, going to a free school? It’s embarrassing that 2 parents have an average of 2 children, cannot make 2 hard- boiled or scrambled eggs with bread with butter. 2 sandwiches and a fruit, plus money for a drink?
People who are young but have issues could be employed by Gov’t to maintain public places or beach properties with a minimum $10 per hour. That gives back to the community while bringing down crime and mental issues.
The economy is doomed to fail as they didn’t keep up with technology and finance. Bitcoin should have been adopted years ago, just look at El Salvador.
Too many children are born to low skilled, poor people whose only hope is State support and welfare.
They’ll be even fewer jobs over the next 15 years.
Big Picture:
Government forecasting to collect almost $1Billion in 2022 and 23, yet will show a deficit in 2022 and a mere surplus of $8 million in 2023. Just imagine when we have a sharp downturn in government revenues – it Will happen.
Government is drunk on spending and losing control, sliding quickly down the slippery slope of “handouts”. Yes some people need support, but many are taking advantage of the opportunity and dishonestly lining their pockets. Cayman is fast turning into a Social Welfare State (driven by better chance for re-election) without direct taxation to support. Guess what’s coming in the the not too distant future?
Missed an opportunity to increase GOL for real estate agents. Make it the same as a senior partner in a law firm. That is in keeping with their income potential based on the ridiculous rates charged. They are a great part of our high cost of living.
Shame I’ve only got one like for this. Cartel pure and simple.
I dont think this is how Wayne ran walkers.
Its pretty amazing. Almost 950 million in revenue and exactly that amount in spending. I know its government and its not meant to be ran ‘lean’ like the private sector but OMG they are not leaving much room for any economic downturns!
You actually think that Wayne ran Walkers?! 🤣🤦🏽♂️
What you talking about Willis ?
Sometimes “who you know” makes a world of difference.
Dear Lord.
Please keep us safe and help us as this pack of novices make us as poor as Job’s turkey.
The PPM were expecting a deficit of of $98.3 million at the end of this year and an operating deficit of $59.6 million in 2022.
So the ‘novices’ seem to be doing just fine
What about increasing the monthly pension payment from $1,000 for retired workers to a liveable amount. Its our money and we should not have to live like paupers.
And when it runs out too soon because you increase the amount, you live like beggars instead?
If you invest less than $500 each month in your retirement, you are unlikely to ever get more than $1,000 each month. You want more, invest more. Funny how that works.
Time to stop the bonuses for civil servants and pay increases for all the politicians.
We are living well above our means.
They are living well above our means. Like to see them survive on 1,000 per month.
2:19, What percentage of politicians and civil servants are surviving on $1,000 a month?
Also, many are running businesses and rent out apartments on the side.
You voted for them
Big Bobo know NoNo about how national economies actually function
Better punctuation is needed here!
You, me, and everyone else that spends money in Cayman Islands are working for the survival of the Civil Service, Cayman airways, and the Turtle farm period. When the going gets tuff (and its heading there) they won’t even feel it. Your welcome.
Interest rates are forecast to increase, perhaps significantly. This will raise the cost of borrowing for government, and everyone else.
Property sales are forecast to slow, perhaps dramatically. This will dramatically curtail governments revenue from stamp duty.
Hundreds of financial services executives will become Caymanian over the next couple of years, resulting in a significant reduction in work permit revenues.
The levels of construction will diminish greatly in a couple of years. Thousands of construction workers will have little to do. Many will leave, and this stop paying rent to hundreds of Caymanian landlords. Tens of millions in import duties on construction materials will disappear.
Cruise tourism will never return at anything like its former levels. This is good, but many on stipends will require ongoing government support.
Prices will climb significantly, most often not because of greedy businessmen, but because of global inflation we are powerless to confront. More and more Caymanians will need financial support from government.
The pandemic is far from over. Planning for anything like normal tourism over the next two years is fantasy.
Meanwhile we continue to undertake the mass importation of poverty, fill our schools with the expatriate children of foreign civil servants (for free), employ hundreds of people in roles that can and should be automated, and spend more than we have in what are fundamentally good economic times for Cayman.
How does this end well?
As it always does in every economic downturn.
Economies all over this world go through CYCLES.
Nothing new.
Dart will be dancing – have his own Island as always intended
With Dart dancing all the way on his ‘own’ island as intended.
It would help if CIMA doesn’t assist in the destruction of the financial services industry which can sustain the economy in the event that some or all of your predictions come to pass.
Not sure Chicken Little, you tell me…. How does it end??
Jamaica and the Bahamas are good indicators.
Wow. Really got it in bad for have you.
You must be the life of the party growing up.
While you are at it why don’t you predict a tsunami or asteroid hit.
Some of what he/she had said is true, some partly true and some all but total speculation.
Tourism will take 3 to 4 years to get back to some semblance of normal and this is only if Covid and the stupid unvaxxers amongst us let us.
Financial Industry could be impacted by the new global tax system. This depends on what counter measures we can out in place to offset this. Never doubt our creative minds.
The part that I say is speculation is in the Real Estate and construction sector. No doubt I feel some slowing coming but slowing not all but complete shutdown as being predicted.
The underpinning of this whole write up is a “Cayman for Caymanians” rant where the writer pushes the envelop a tad too far.
Yes. Top jobs should have Caymanians moving towards filling them and not just coverting foreigners to locals. But this is something we do at policy level.
We need a strategic plan that works with education to immigration. All about educating tomorrows business leaders today and rewarding businesses who strive to hire and promote Caymanians and penalize ones that don’t BUT this takes testicular fortitude some many of our politicians do not have to stand up to the CI Chamber and others.
I just think the writer spelt out dramatic doom and gloom to create some fertile ground for his/her point that is a bit over the top.
Tsunami’s are very unlikely, and the lack of a continental shelf around us provides some additional protection. Even less likely is an asteroid strike. We could do nothing to counter that anyway, other than wishing NASA and Musk well.
Everything else the poster listed is a near certainty – and all apparently being ignored by the government.
This Government lacks what the previous had and that is evident in these figures. They are not going to be good stewards of the economy. To support all of this spending and massive social support agenda I would expect to see some of the money directed towards the the average middle class adult who have slipped below the poverty line. More training in those areas where we have the highest demand for work permits, more initiatives to support Caymanian entrepreneurs, more initiatives to get people off the NAU and into self sufficiency but so far I’m only seeing spending of money the Government does not have. Where is the welfare to work support? Where are the improvements that put Caymanians in focus ? When will they start breaking down the cement ceiling? When will they start demanding that Caymanians fill the many managerial positions in our Tourism industry? The majority of these are still occupied by permit holders ! Where are the changes to help Caymanians become homeowners? Where are the changes to make certain occupations Caymanian only ? The deputy premier campaigned on that ? All I see is spend spend spend and very little building of people. Truly disappointed with what I have seen so far !
Amazing how you expect the CIG to give Caymanians absolutely everything. You already have most things in your favour and quite rightly so.
The best thing they could do would be improve the schools and provide specific training for Caymanians in the industries which are most prevalent. But they don’t.
It also requires that people get off their backsides instead of sitting with one hand out asking for stuff and the other hand pointing at the evil expats. But that’s easier in most cases.
But let’s raise the pension contribution when we are barely surviving. Get rid of it waste if money and time
There’s a certain Eastern avenue restaurant forever in ciurt for not paying employee pensions.
Perhaps Mr Saunders would care to address that …but wait.
There’s a certain one next to the fish market too…
Not paying employee pensions, it would seem, is a prerequisite for consideration of PACT appointment to any of the many Boards with good pay for attendance at meetings; no knowledge required.
They’re all related so don’t expect any changes during a PactUDP
Reign.
Meanwhile….has PACT identified any cost-trimming or cost-savings anywhere? Especially at CIAA and other public-funds vaccuums like TAB, CTC. At least CAL delivers !
Just close the Turtle Farms and we’re even.
Where are all the ‘keep the borders closed’ people who stated ‘the economy is thriving’ now?
Can’t blame us for PACTs nonsense budget
Hey NIMWIT. We still here.
Don’t worry. Things not start to get bad yet. We just reopened. The delay is always 3 wks behind and the closer we get to Christmas the worse it will get.
These geniuses chose FLU SEASON to open back up. You can’t make this sh!t up.
So just wait for it. You remember the movie the perfect storm? We start with rampant community transmission and we sprinkle foreigners bringing in the flu and more stronger covid and lets top it off with OMICRON. Yeah how could this ever go wrong. Ooh wait. Lets throw in a Cruise Ship for sh!ts and giggles.
Yeah. Perfect time to open up. Brilliant.
Ooh and the problem is not necessarily reopening but when and how.
I am for reopening. Just done smarter.
Dumdum position. Fees collected increased this year. That was reported months ago.
It is thriving. These guys have income of a billion dollars.
The spending is so out of control it’s laughable.
‘.. as well as an increase on civil servants’ health premiums.’ Is it 1 April? Still nothing for seniors!
And the increase is so unnecessary. I can tell you that some civil servants prefer to go to private doctors.
I am a civil servant and go to a private doctor. I would happily co-pay insurance if I were able to choose private health care. Most of services that I have used at HSA are sub-par and I have still ended up having to go to a private doctor as the HSA doctors failed me.
Madness. This real estate and construction boom is not going to last forever. Government should be saving for the inevitable rainy day. It is squandering our future.
They should have been saving for that rainy day since the boom first started under Jim Bodden in the late 70s, 10:59.
27 @ 11:53 am – You mean the first “sell-out” started under Jim Bodden! National Pirate!
I disagree. Expatriation is growing globally and this is a business friendly country. Hopefully, this will drive development of truly affordable housing and job opportunities for the Cayman people in the process
Why do we keep ploughing money into the turtle farm? It’s really just for tourists and cone on it’s nearly 2022 why not ban turtle meat like virtually every other country. I I hear 1 more it’s our heritage excuse …. Anyway I thought burger king or kfc should be Cayman’s heritage food the amount that gets eaten + the trash on the road.
Cayman Airways, can’t believe they loose so much as well, Yes during the pandemic there were none or very few flights but Cayman gouged those who needed to travel for medical reasons $900 return to miami each in economy. But they also want hand outs on top…. crazy.
There would be a riot if anyone seriously considered banning turtle here.
How much turtle is really eaten? If so why not just go back to an actual farm rather than the White Elephant tourist experience.
They “invested” millions to lose more while being able to hand out jobs for a select few.
It hasn’t been able a farmed supply of turtle meat for a long long time now.
Just another one of McKeeva’s follies!
As long as McKeeva is elected in West Bay he will never allow the turtle farm to go. Lots of wotes for him in the Turtle Farm.
Our cultural identity is built on turtles and turtle stew.
Without turtles we are nothing. All Caymanians know that simple fact.
Clearly.
29 @ 8:09pm – Please! Unless you’re a toll (perhaps) your comments are strictly yours, not all Caymanians by far.
I’m a 60+ year old multi-generational (since mid-1700s) Caymanian and I’ve never eaten turtle stew, the Caymanian traditional dish as opposed to turtle steak, which I’ve eaten/tried only once knowingly and tricked by my late mother once or twice. So, turtle does not identify me. Turtle meat has never been cooked in my own household and only my wife and one child eat it, and not even regularly. So I can fairly say “turtles and turtle stew” do not determine my cultural identity, nor most of my Caymanian-born nuclear family. At the same time, I respect what the “turtling industry” days meant for Cayman and I cherish my own personal memories of seeing the turtles offloaded on the GT dock and butchered up the street at the market.
But I prefer to attach my identity to memories of those same times when turtling meant so much to Cayman and even before my time, when the true cultural identity of a Caymanian was hard work, integrity & honesty (a person’s word was their bond), more care and empathy for our neighbours, TRUE Caymankind, respect for and acceptance of others and more hard work!!
Turtle meat aside, if you’re genuine, that’s my take and if you’re trolling then be schooled. We changed just like anywhere else in the world.
Agree. If we acknowledge CAL is strategically important to the country, and it has been particularly during covid, why couldnt they have priced return tickets at something reasonable like $500. Why take the money out of the pockets of residents. We all know the losses they make are just going to be handed back to them anyway.
I wonder if the Biden 15% Global Tax impact is included in those calculations………
You mean the G20 tax that basically every country on earth supports?
in the face of on an oncoming global recession, pact will not even pretend to address the out of control government spending….?????
welcome to wonderland.
shame on roper …is this good governence???
as i said a few days ago:
things that should but won’t be in the budget:
reduction of cig spending
redcution of civil service numbers or salaries
measures to control inflation
measures to control cost of living
measures to reduce cost of doing business
any stimulus measures that will help business and create employment.
these idiots will spend us into bankruptcy and severe recession
And yet, you call for government stimulus spending while cutting other areas? Capitalism is in the late stage end game. A system built on infinite growth with finite resources is destined to fail
I dare bet $15M is on the low side with an error factor of at least plus 500%. Minister Saunders, instead of bellyaching, no pun intended, why not kick your ministry into high gear and start thinking outside the box on how to reduce the shortfall without crippling the economy and the lower middle and poor classes even further? This might take some brass balls and backbone to though, do you have what it takes?
The Turtle Centre, CAL, and other CIG subsidised white elephants need to be reigned in so they at least break even or fully privatised. These entities cannot be allowed to continue to be the chain around our necks as we slowly drown to death.
Stop giving the free lunches and you got 4 million surpluses.
If you’re referring to free lunches for school children, that is cruel.
There is no such thing as a free lunch.
For all you PACT supporters, a deficit means they are spending more money than they are making.
Governments aren’t a business, no matter how hard the business community spins the narrative. Countries like the U.S. regularly have deficit spending and they are still one of the world’s most powerful economies.
Has more to do with fact that whole world economic system is run on the U.S. $$$$.
United States has trillions of Dollars in debt…$15M for Cayman..meh.
The US can literally print money out of thin air. Cayman – not so much.
Also, when you buy somthing down here you get the option to pay in CI and … US Dollars!!!!