The Cayman Islands government has reported a surplus of $215.7 million for the entire public sector, including statutory authorities and government entities, in its first quarter financial results.
The surplus is $22.2 million higher than the $193.5 million budgeted for the period.
The better-than-expected performance resulted from $12.7 million higher coercive revenues and less spending on supplies and consumables (-$12.1 million) and personnel (-$8.5 million).
This was partially offset by more spending on local and overseas tertiary healthcare providers and higher-than-planned transfer payments, in particular stipend payments to displaced tourism workers.
Core government showed a $220.9 million surplus based on revenues that were higher by $42.7 million for the period.
Government earns most of its revenues, for instance from licensing fees, at the beginning of the year. The first quarter surplus is then used to pay for comparatively higher expenses in the second, third and fourth quarter. Certain savings are also only temporary as projects are delayed and vacant posts filled at a later stage.
Finance Minister Chris Saunders said in a press release the first-quarter results demonstrated the financial prudence of the government, as the islands recover from the COVID-19 pandemic.
The first-quarter surplus is similar to government’s financial performance in the last comparable period pre-COVID from January to March 2019, when government accounted for a $216.7 million surplus.
Government’s record revenues of $446.9 million during the period were $13 million better than budgeted and $73 million more than in 2019.
Financial services revenues higher
Higher fund and partnership registration numbers increased government’s collection from mutual fund administrator fees, private fund fees and partnership fees collectively by $12.5 million above the budgeted amount.
In addition, government raised $3.2 million more funds than anticipated from stamp duties on land transfers, based on increased property values and a higher volume of transactions.
Work permit revenues were also higher than projected, by $3.9 million, as Cayman moved into the fifth phase of reopening.
At the same time, other stamp duties and tourist accommodation charges fell short of the budgeted amount, by $7 million and $2.7 million, respectively.
The finance minister said, “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.”
But Saunders noted that the tourism sector, while recovering, still has not achieved pre-pandemic levels. Duties on fuel and alcohol, which are charged by volume and not value, are below 2019 levels.
Government’s expenditures of $225.9 million, while $5.6 million less than planned in the budget, are significantly higher than before the pandemic, by $68 million.
The results mean that government has $83 million more in cash than projected. Actual bank account balances at the end of March 2022 were $535.4 million, consisting of $370.5 million in operating cash and deposits and $164.9 million in reserves and restricted deposits.
Source: Cayman Compass
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