Pandemic cost a third of a billion dollars

The Office of the Auditor General has just released a report that estimates the cost of the Covid-19 pandemic to government to be at least $333 million.

The report, ‘The impact of the Covid-19 pandemic on Government finances: Update to March 2022’, provides an estimate of the total financial impact to the government of the pandemic in the two years from March 2020 to March 2022.

The Auditor General, Sue Winspear, said that while the public welcomed the government taking measures to supress the spread of the virus, it had come at a great cost financially to the country.

“I, along with the rest of the citizens of the Cayman Islands, welcome the actions taken by successive Governments to suppress the spread of the disease. There is no doubt that governments have succeeded in preserving life during the pandemic. However, the actions taken, while sheltering residents from the worst effects of the virus for a significant period of time, have had a substantial financial impact, which we estimate to be at least $333 million over the two years to March 2022,” she stated.

The report highlights that by 30 September 2021, the total financial impact of the Government’s response to the pandemic was around $248 million. Of this total, the Government spent $132 million and had foregone revenues of at least $116 million.

“The actions taken by the government, particularly the closure of the border, had a huge impact on the tourism industry, and this has contributed to the financial impact. Half of the additional expenditure was to support individuals and businesses, particularly those in the tourism sector, and the majority of foregone revenues were also because of lost charges and fees from tourism,” she detailed.

The report also states that from 1 October 2021 the financial impact had continued and was estimated to be a further $85 million. Government had incurred and committed an additional $70 million in expenditure and had continued to forego revenues of around $14.6 million.

The Auditor General said that the financial consequences of Covid-19 could be with Cayman “for some time”.

Deputy Governor, Franz Manderson, welcomed the publication of the report, which outlines figures relating to the Covid-19 activities of core government entities, the Heath Service Authority and the Cayman Islands Airports Authority. The report documents a total financial impact of at least $333 million, with the largest proportion of expenditures going to support for businesses, healthcare, and quarantine and social-distancing measures.

Mr Manderson stated:

“The Auditor General’s report provides a valuable record of the key measures taken in the Government’s response to Covid-19 and their financial impact. This information is important for accountability and longer-term planning,”

He noted that, as the country would be managing the pandemic into the foreseeable future, and with other potential emergencies that could disrupt the economy, the report would be useful as the public sector considers long-term financial sustainability.

He also highlighted the human factor behind each of the policy initiatives, and the positive outcomes achieved, some of which had been acknowledged in the report, he said, with the OAG saying, in part, “Because of the border closure and other actions taken the Cayman Islands did not experience … the start of the first wave of the pandemic, until mid-September 2021.”

“It was no accident that the Cayman Islands had a unique and sustained period of no community transmission while the pandemic raged in most other parts of the world,” Mr Manderson confirmed. “It is no coincidence that we have not suffered the large-scale hospitalisations and deaths experienced in most other jurisdictions, as we slowly and strategically reopened our economy and ports. Rather, our success is testament to the work of thousands of public servants and other concerned stakeholders who worked tirelessly and with personal sacrifice to support the elected governments.”