Government coffers getting back on track

For the first quarter of 2022, Government has recorded a surplus of $220.965 million, $18.624 million better than the budget of $202.341 million. Government attributed this extra cash in its coffers mainly to better-than-expected revenues of $12.997 million. The results were the highest ever for a first quarter and surpass pre-Covid levels, Deputy Premier and Minister for Finance & Economic Development, Chris Saunders, advised Cabinet this week.

At the end of the first three months of 2022, the entire public sector had a surplus of $215.718 million, which was $22.178 million better than the projected surplus of the period of $193.54 million and an increase of $12.040 million over the same period in 2021. This puts the first quarter 2022 results on-par with the last comparable pre-pandemic period of 1 January – 31 March 2019, which showed a surplus of $216.747 million.

While still above pre-pandemic levels, expenses for the first quarter of 2022 came in under budget, with actual expenses amounting to $225.941 million, while budgeted expenses were $231.568 million for a positive variance of $5.627 million. Never-the-less, while the first quarter of 2022 expenses compared favourably to the budgeted figure, they were significantly higher than those for the same period in 2019, which amounted to $158.256 million. This is an increase of $67.685 million.

Cash positions for government are also looking healthier, with the actual cash position being $83.676 million greater than budgeted expectations for the first quarter of 2022. Actual bank account balances at 31 March 2022 were $535.374 million, while budgeted bank account balances at 31 March 2022 were $451.698 million.

The Deputy Premier said he was pleased with the actual results for the first three months of the year, as it demonstrated the financial prudence of the PACT Government and their commitment to improving government’s financial position as Cayman recovered from the effects of the global pandemic.

Some of the standout revenue earners for government were Import Duty Revenues at $53,677,000 (compared to $45,110,000 same period 2021), General Registry Fees of $151,231,000 ($139,288,000 for 1st Q 2021), and fees paid the Cayman Islands Monetary Authority of $138,890,000, up from $125,885,000 as at last year’s 1st Q, indicating that the financial services industry was continuing to be the backbone of Cayman’s economy. Property-related revenues were down to $21,806,000 from $24,141,000 for the same period last year. However, work permit fee revenues were up to $26,694,000, that is considerably more than $17,974,000 same period last year, indicating the economy was once again growing at a pace. Tourism revenues still had a long way to go to reach pre-pandemic levels of $15,302,000 in 2019, but were slowly improving, bringing in just $169,000 in 2021 but $3,186,000 (all first quarter figures).

Deputy Premier Saunders said revenues for the first quarter were better than budget and an improvement of $73 million or approximately 20 per cent over 2019 (pre-pandemic).

“The more detailed results tell the same story when broken down by the various revenue categories. When we examine the revenues driven by the financial services sector that are collected by the Registrar of Companies and CIMA, we see that the confidence in our financial services sector remains strong despite the many global challenges,” he stated.

Mr Saunders acknowledged that Cayman’s tourism sector - while recovering - still hadn't achieved pre-pandemic levels and duties on fuel and alcohol, were below 2019 levels.

“The silver lining in all of this is that overall confidence in our economy and our stewardship of government finances remains high. The results speak for themselves,” he said.