October 30, 2020
Cayman Islands Finance Committee members confirmed that the government is now forecasting a $168.7 million deficit by the end of this year as a result of the COVID-19 pandemic.
Councillor to the Minister of Finance Roy McTaggart, as he opened the committee hearing for the appropriation changes to this year’s budget, delivered the bad financial news that everyone was expecting. He stated that the changes to the 2020 budget arose from the mitigation and suppression of the virus.
McTaggart explained the appropriations and pointed to the additional $40 million that had not been budgeted but was spent on COVID-19 testing, air-bridges between the UK and Grand Cayman, and other specific virus-related spending.
Another $23.1 million has been spent year to date on financial assistance to the most vulnerable, as well as displaced tourism workers and non-Caymanians stuck on the island as a result of the border closure. In addition, $9.5 million has been spent on micro and small business relief efforts, while $3 million was used to buy laptops for students in public schools to reduce gaps in education equality exposed by the need for online learning during the pandemic.
A further $16.3 million was spent on operational support for Cayman Airways Limited to keep the national flag carrier afloat during these times of uncertainty.
Government’s accounts are also impacted by the government-guaranteed loan scheme for medium and large-sized businesses, where the government will guarantee or be liable for 50%, or $100 million, of a maximum loan facility of $200 million, as well as its own line of credit to the tune of almost $400 million and a loan to the Cayman Islands Airports Authority.
However, the finance minister said that while the government will be temporarily outside the requirements of the public management and finance law regulations, the UK, which supervises the government’s fiscal management once it breaks the Framework for Fiscal Responsibility, has offered its support to the Cayman government, given the circumstances.
Most of the appropriations bill reflect increases in spending but there are decreases, though the former far outweighs the latter. While the tourism ministry offered up some of the biggest savings in some areas, totalling more than $15 million, the increased spending of more than $30 million still left the ministry in the red.
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