The government’s first-quarter report shows a higher-than-expected net surplus, fuelling optimism for its performance over the rest of 2023.
The profits for the entire public sector – core government, plus statutory authorities and government-owned companies – were recorded as $231.7 million or $24.4 million more than budgeted.
The boost was mainly due to actual revenue being $22.6 million higher than what was budgeted, the Ministry of Finance and Economic Development’s unaudited report read.
But while the core government performed well, a $3.3 million loss from the statutory authorities and government-owned companies had a negative impact on the overall surplus.
Premier Wayne Panton, who is also Minister for Finance and Economic Development, told the Compass the government is pleased with the results and first quarter position.
“It is well understood that continued fiscal discipline for the remaining nine months of the year is required in order to realise the projections set-out in the recent Strategic Policy Statement that was tabled in Parliament last month,” he said.
Revenue
The government’s first-quarter revenue of $455.9 million – $16.2 million more than budgeted – is expected to be the highest of any quarter during 2023.
This is directly related to financial services fees being due at the beginning of each year, the finance ministry’s report explained.
Among those fees, mutual fund administrators’ and private fund fees, respectively, performed $3.5 million and $4.6 million better than anticipated due to an increase in funds registered.
Tourism accommodation fees were $7.1 million higher than budget expectations because of the increase in stayover tourism following the reopening of the borders in 2022.
And work-permit fees were $4.5 million higher, due to the “increased demand for workers following the reopening of the borders and a stronger economic performance than expected”, the report said.
‘Other Import Duty’ fell short of projected expectations by $4 million, but this still marked a $4.4 million increase over 2022.
Expenses
Expenses came in just under budget, with actual expenses at $238.4 million while budgeted expenses were $238.8 million.
Personnel costs were $8 million lower than expected, and expenditure on supplies and consumables was $6.1 million lower – a total savings of $14.1 million.
However, this saving was offset in part by $4 million higher-than-budgeted levels of expenditure from statutory authorities and government-owned companies.
Payments to the Cayman Islands National Insurance Company and the Health Services Authority exceeded their budgets by $1.2 million and $2.9 million, respectively.
According to the report, the over-budget national insurance payments were due to higher-than-expected costs for health insurance for civil service pensioners.
The health services overpayment was due to extra costs of $3.8 million for the care of people on the poverty line.
Also higher than budgeted were costs related to non-governmental suppliers at $17.7 million ($4.9 million more than expected).
And transfer payments of $18.3 million were $5.1 million more than budgeted – mainly due to spending on scholarships and bursaries, and financial assistance.
Cash position
The government’s net assets were $2.2 billion, with $512.8 million in cash and deposits at the end of the quarter.
This was $60.4 million less than anticipated in 2022, mainly due to the purchase of $276.9 million in US Government Treasury Notes which are not included in the total.
“The accumulation of cash is as result of higher than expected revenues together with a delay in capital projects in the prior year,” the report said.
It concluded: “The first quarter’s performance has positioned the government to be optimistic about its performance for 2023.
“Over the remaining three quarters of 2023 costs will have to be diligently monitored to ensure spending is not incurred unnecessarily.”
The ministry is required by law to publish each quarterly report in the Gazette within six weeks of the end of the first three quarters of the financial year.
This first-quarter report, from 1 Jan. to 31 March 2023, was published on Wednesday, 10 May.
The ministry aims to publish the second-quarter report, detailing performance from 1 April to 30 June, by 10 Aug.
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