Government fiscal surplus larger than expected

Higher revenue and costs savings

Higher revenues and cost savings have generated a larger than anticipated fiscal surplus both for core government and the entire public sector in the first six months of this year.

Core government’s financial results show a $155.8 million surplus in the first half of 2021.

When combined with the results of government companies and statutory authorities, whose fiscal contribution declined compared to last year, the surplus is still $142.5 million for the public sector as a whole. This is $23.5 million higher than budgeted.

Core government’s revenues during the period have increased by $125.6 million compared to the first six months last year. At the same time, expenses have fallen by $45.6 million, as personnel costs declined and government spent less on supplies and consumables.

However, government’s financial report for the second quarter cautioned that early savings may not translate into full-year savings if they relate to delayed projects or vacancies.

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Government also continues to incur costs related to COVID-19 mitigation and the pandemic’s impact on the economy.

Government’s coercive revenue for the first half was $57.2 million higher than budgeted and $127 million higher than last year.

This was mainly due to $48.5 million in new private fund fees introduced in the third quarter of 2020, more property transactions and land transfers ($33.8 million) and higher duty revenue than budgeted ($27.1 million). Government also collected $6 million more than expected from company registration fees.

This offset the continuing decline in revenue from tourism fees such as tourism accommodation charges ($22.7 million less than budgeted), cruise ship departure charges ($6.0 million less), and environmental protection fund fees (down $3.1 million) through the second quarter.

Government’s transfer payments of $60.9 million were $37.4 million more than budgeted for the six-month period. In the second quarter, transfer payments were also $35.5 million higher than during the same period last year.

At the end of June, government held $512.4 million in cash, of which $340.3 million were operating cash and deposits, and available for immediate spending if needed.

The remainder of $172.1 million were reserves and restricted deposits.

Government continued to pay down debt and reduced the debt balance to $231.4 million as at 30 June 2021.

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