Government’s finances better than expected

By Staff Writer

Deputy Premier and Minister for Finance and Economic Development Chris Saunders presented a better than expected set of financial statements to Cabinet this week. For the 1 January to 30 June 2022 period, central government recorded a surplus of $159.0 million, which is $14.0 million more than the projected year-to-date operating surplus of $145.0 million. The central government surplus was also $3.1 million higher than the surplus for the same period last year.

After the first six months of 2022, the entire public sector (EPS) had a surplus of $145.6 million, which is $18.2 million more than the projected year-to-date operating surplus of $127.4 million. The EPS surplus was also $3.1 million higher than the EPS surplus for the same period in 2021.

Revenues were also up, amounting to $636.6 million, which was $34.8 million more than the year-to-date projection of $601.8 million. Revenues collected in the first six months of 2022 were $56.6 million higher than those collected for the same period in 2021, and $100.7 million higher than those collected to the end of Q2 2019 – which is the last pre-Covid year on record. Financial services and work permit fees made up the bulk of the increase in revenue collection, especially those fees collected by General Registry which were higher by $4.0 million due mainly to a favourable variance in partnership fees of $3.5 million, which was due to levels of registration outperforming the anticipated increase. Compared to the actual results for the same period in the prior year, there is a $10.2 million positive variance or a 7% increase with respect to fees collected by General Registry. Financial services fees collected by CIMA for government were also higher, by $5.0 million.

Work permit revenues were higher by $6.5 million, representing increasing demand for workers as the economy moved into phase five of the border reopening plan. Compared to actual results for the same period in 2021, these 2022 fees are $12.2 million or 31% more.

With property prices going through the roof, it is no surprise that property-related revenues were also higher, by $18.2 million.

On the downside, expenses for the six-month period ended 30 June 2022 were $477.6 million; this amount was $20.8 million more than the year-to-date budget of $456.8 million. Compared to the prior year-to-date actuals, total expenses are $53.4 million higher. This was mainly due to extra costs of $13.9 million for tertiary health care costs; $1.9 million for the public schools meals programme; and $21.5 million more than the initial 2022 budgeted expenditure for the ex-gratia tourism stipend programme.

As far as government’s cash is concerned, total cash and fixed deposits as at 30 June 2022, were $486.2 million.

Deputy Premier Saunders said he was pleased with the government’s financial performance for the first six months of the year and said they were fortunate to be in a surplus position, which allowed them to continue with their programmes to alleviate cost of living concerns for local families.

He went on: “The revenues at the end of the second quarter were $34.8 million better than budget and an improvement of $100.7 million or approximately 19 per cent over pre-Covid 2019. This continues the overall trend of better than expected revenues since the start of the year, and particularly demonstrates ongoing confidence in our financial services sector and the post-Covid recovery of our economy.”

He acknowledged, however that there continued to be challenges to overcome – especially with regard to current global economic trends.

“And closer to home, while our tourism sector continues in its recovery, it will be some time before we get close to pre-pandemic levels. The silver lining in all of this is that our revenues and surpluses thus far will help us to ride out any upcoming bumps in the road,” he stated.