Finance Minister Roy McTaggart

Government continued to raise higher than expected revenues in the second quarter of 2019, which produced a 65% larger than budgeted surplus for the public sector.

An unaudited quarterly financial report covering the first six months of the year showed a fiscal surplus for the public sector of $201 million, compared to the $122 million anticipated by the budget.

Revenue from levies, duties, fees and government charges of $499 million where $51 million higher than expected and $25.9 million higher than a year ago.

Record numbers of stayover tourist visitors to the islands have been driving up tourist accommodation charges and stamp duties raised from property transfers were also contributing to the positive result, even though revenues were 12% lower than last year.

Banks and Trust License fees were higher than anticipated as a result of fewer terminations than expected and larger fees charged on higher asset values held by licensees.

Also, partnership fees were higher as registrations surpassed the anticipated growth of the sector, resulting in a 17.6% higher revenue.

In contrast, annual permanent resident work permit fees, security investment business licenses and funds raised from grants providing for the continuation of work permits fell short of the budgeted amounts.

On the spending side, core government expenditure grew by 11% over last year, outpacing the core government revenue growth of 7%.

While personnel costs of $158 million were $2.9 million lower than budgeted for the first half of the year due unfilled vacancies, the 5% cost of living adjustment at the end of the third quarter of 2018 meant that staff costs were 12.7% higher than last year.

Government expenses for the purchase of services were also below budgeted provisions but are expected to be more in line with expectation as the year progresses, the report said.

Finance Minister Roy McTaggart said he was pleased with the continuing positive performance of public sector finances. “We will maintain prudent fiscal management and stewardship throughout the year to ensure that we generate a substantial surplus in government’s finances at year-end, so that we can continue to pay off our debts and invest in government’s priorities.”

The adherence to fiscal policy, the report noted, continued to produce high cash and deposit balances held by core government.

Operating cash and deposits were $522 million at the end of the second quarter, while reserves and restricted deposits were $168 million, resulting in a total cash and deposits balance of $690 million, on par with 2018 figures.

The fiscal performance combined with no new borrowing since 2011 had a positive impact on government debt.

Government repaid $13 million of overall debt principal in the first half of this year and $10 million of this in the second quarter alone.

The 24 public entities comprising statutory authorities and government owned companies generated a total surplus of $11 million through the second quarter, government said in a press release.

Support local journalism. Subscribe to the all-access pass for the Cayman Compass.

Subscribe now