CIG sees $180 million surplus due to record revenues

Deputy Prime Minister Chris Saunders at Thursday’s press conference

(CNS): The outlook for public finances “remains sunny”, Finance Minister Chris Saunders said on Friday as he released the Cayman Islands government’s unaudited financial results for the first five months of the year. Saunders revealed record revenue for the public purse and a surplus more than $30 million better than expected, mainly due to stamp duties fueled by soaring house prices and the financial services sector. The extra money will be used to help people cope with soaring electricity costs, the minister said.

Total revenue had surpassed the half-billion mark by the end of April 2022, which is an unprecedented achievement. Total central government operating revenue for the four-month period ended April 30, 2022 totaled $509.5 million, marking the first time revenue exceeded half a billion dollars in the first four months. of a financial year.

While inflation helps fill government coffers, it cleans out ordinary people’s bank accounts, but Premier Wayne Panton said the surplus would help Cayman navigate the choppy waters of the global economy.

With an operating surplus for the public sector as a whole of more than $179.5 million, the government is well ahead of the budget forecast, which projected a surplus of less than $150 million. However, the CIG has already raised the bulk of the financial services money for this year, meaning the government is on track to maintain the cash cushion. The minister said this would allow the government to easily fund the energy aid package announced in parliament earlier this month.

“With oil, and therefore energy, prices showing no sign of any significant reduction in the local market and indeed globally, we will use some of the surplus to help our people meet the challenges this cost of living has caused,” Saunders said. said. “We are fortunate to be able to take this initiative and others as announced by the Prime Minister and we look forward to offering this additional support during such a difficult time to provide much needed financial assistance to our people.”

He said May’s numbers followed this year’s trend for higher-than-expected earnings. “I maintain cautious optimism as most government revenue collected in any given year occurs in the first half due to various financial service fee structures. However, the May year-to-date figures reinforce our positive position heading into a historically leaner second half.”

Inflation may also at some point affect spending, which so far is largely in line with the planned budget outlay of $381.6 million. Actual expenditures were $381.7 million, a figure that exceeds last year by $31.3 million.

But performance has been much better than expected in several areas, including financial services, where fees so far are more than C$11.5 million higher than expected, as well as land-sharing fees and rights. stamp. With the tourism sector beginning to recruit again, an additional C$5.5 million over budget was also collected in work permit fees.

The government’s cash position as of May 31, 2022 was $469.4 million. This amount is represented by cash from operations of $304.5 million, of which $284.2 million is held in fixed deposits, and reserves and restricted cash of $164.9 million.

Government operating revenue is much better than last year, which Saunders says reflects confidence in Cayman’s financial services sector, a high volume of real estate sales and steady growth in permit fees as tourism is beginning a slow recovery.

“The tourism sector is obviously not recovering as quickly as we had hoped, particularly due to the late start following the emergence of the Omicron variant earlier this year,” Saunders said. “However, I expect tourist numbers to start to increase once further travel restrictions are lifted and we enter peak season towards the end of the year. Despite some shortfalls in some revenue items, the overall outlook Public finances remain supportive, and we are monitoring the numbers closely and monitoring upward and downward movements on a monthly basis in order to be as nimble as possible and react quickly to any unexpected issues.

Panton said the PACT government’s commitment to fiscal discipline, a strong and resilient economy and continued investor confidence led to the surplus, also helped by the civil service which is keeping spending under control.

“This larger-than-surplus fiscal surplus will help us navigate the choppy waters of the global economy that lie ahead while allowing us to responsibly help members of our society who need support,” said the Prime Minister. “We intend to continue to be fiscally disciplined as we aggressively build on our existing strengths to realize Cayman’s potential as a global sustainability leader and one of the best places of the planet to live, work, visit and invest.”

Breakdown of revenue collected over the first five months of the year into several categories with a comparison with previous years:

2019 2020 2021 2022
Revenue from import duties $76,739,000 $67,488,000 $76,597,000 $90,044,000
General registry fees $140,223,000 $136,467,000 $148,508,000 $159,088,000
Fees collected by CIMA for the government $89,369,000 $81,728,000 $133,358,000 $143,554,000
Income from work permits $35,611,000 $21,906,000 $31,770,000 $44,255,000
Property income $30,775,000 $28,339,000 $50,734,000 $44,616,000
Tourism-related income $26,419,000 $9,768,000 $539,000 $7,412,000
Other coercive income $32,177,000 $27,367,000 $38,666,000 $42,453,000

May 2022 year-to-date financial performance comparison vs. previous 3 years:

2019 2020 2021 2022
Revenue $481,095,000 $408,618,000 $517,946,000 $568,857,000
Operating expenses, financing costs and non-operating costs $274,461,000 $308,614,000 $350,341,000 $381,685,000
Central administration operating surplus $206,634,000 $100,004,000 $167,605,000 $187,172,000
Surplus/(Deficit) Achieved by Statutory Authorities and Public Enterprises $4,174,000 ($190,000) ($12,893,000) ($7,715.00)
Total public sector surplus $210,808,000 $99,814,000 $154,712,000 $179,457,000
Total bank account balances $711,387,000 $603,209,000 $549,803,000 $469,445,000

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