Higher-than-expected earnings related to land transfers and vehicle/petrol imports boosted the Cayman Islands government’s earnings during the budget period that will end Dec. 31, Finance Minister Roy McTaggart said Friday.
However, those additional earnings were partly offset by higher-than-expected expenses in the government budget period, which will go from July 1, 2016 to Dec. 31, 2017.
The increased revenues were mainly credited to a $13.1 million increase in stamp duty transfers and another $12.7 million rise in import duty on vehicle, gasoline and diesel imports, compared to what was initially budgeted. In total, government’s revenues are expected to end the year at $26.3 million more than budgeted.
Expenses for the same period were expected to be $17.4 million higher than budgeted. Those increased expenses were due to a number of factors, including:
- $10.3 million in additional funds to pay for a greater-than-anticipated number of uninsured or under-insured patients requiring medical care outside the Cayman Islands
- $3.1 million during the 18-month period for the care, custody and repatriation of Cuban migrants who landed illegally in Cayman
- $4.8 million to fund the settlement of legal cases, including one long-running high-dollar settlement involving long-term treatment in a personal injury case.
In addition to those losses, national airline Cayman Airways was primarily blamed for an $8.9 million net loss in operations of government’s statutory authorities and government-owned companies during the 18-month period.
“The deterioration is primarily related to Cayman Airways, which has seen a significant reduction in its passenger loads on its Cuba and Miami routes and will thus experience a larger loss than initially forecast,” Minister McTaggart said.
He did not provide any reasons for why passenger numbers had reduced during his Friday budget address.
The government expects to end the current budget year with an operating surplus of $55 million, about $9 million higher than it expected.
Typically, the operating surplus figure, which subtracts total amounts earned from the total spent for government operations, does not include any spending on repayment of debt principal amounts. It also does not reflect spending on capital projects during the year.
According to 2016/17 budget documents, government was due to repay $52.3 million in debt principal during the 18 months of its current budget. That is separate from the repayment of interest on those amounts borrowed (approximately $39 million), which is included in the operating surplus calculation.