Government’s year-to-date surplus above budget

Coming in at $30 million over budget, government’s unaudited results for the first five months of 2022 show a $179.5 million operating surplus for the entire public sector, with total operating revenues of core government exceeding half a billion dollars by the end of April alone. This is a record for government, which has never seen its revenues go above a half a billion in the first four months of a financial year.

Government has said that they were going to put 20% of that $30 million surplus towards the energy assistance programme announced a few weeks ago, which will help people who are struggling to pay their energy bills.

In presenting the figures to Cabinet, Deputy Premier and Minister for Finance & Economic Development Chris Saunders said the May numbers followed a similar trend as prior months, with higher than budgeted revenues and surpluses.

“I maintain a cautious optimism as most of the government revenue collected in any given year comes in the first half of the year due to various financial services fee structures. However, the May year-to-date numbers shore up our positive position heading into the historically leaner second half of the year,” he stated.

The main reason for a higher than anticipated budget surplus came from better-than-expected performance in a several areas, the main ones coming from the real estate and financial services industries, along with higher-than-expected work permit fees.

Land and holding companies share transfer charges were $2.2 million better than budget, relating to higher volumes of property transfer. Stamp duty on land transfers amounted to $13.2 million more than projected, as there continued to be higher than expected volumes of property transactions coupled with high property values.

Mutual fund administrators licence fees surpassed projections by $3.9 million due to an increase in the volume of funds registered, and partnership fees were $4.1 million better than budget, due to the level of registration outperforming the anticipated increase. Private fund fees were $3.5 million over projections, due to a higher number of private funds being registered than anticipated.

Work permit fees were $5.5 million more than anticipated, representing an upturn in demand for workers as the economy moved into phase five of the post-pandemic border reopening.

Deputy Premier Saunders said the May year-to-date figures continued to show improvement when compared to previous years’ monthly YTD results, which “showed strong confidence and performance in our financial services sector, a high volume of sales in our real estate sector combined with high property values, and steady growth in work permit fees as the hospitality industry and the Islands continue to re-strengthen post-Covid.”

There were, however, areas still performing below expected projections. These included ‘Other Import Duty’ which came in at $11.2 million less than expected but compared to actual results from the same period in the prior year, there was a $10.9 million favourable variance, government acknowledged. In addition, expenses were on-budget but above the prior year, with actual expenses amounting to $381.7 million with $381.6 million being budgeted. However, compared to the prior year-to-date actuals, the 2022 total expenses were $31.3 million higher.

government’s cash position at 31 May 2022 was $469.4 million. This amount is represented as operating cash of $304.5 million, $284.2 million of which is held in the form of fixed deposits, and reserves and restricted cash (all held in the form of fixed deposits) of $164.9 million.