COVID SPENDING PUSHES BUDGET INTO THE RED

Spending necessitated by the COVID-19 pandemic has pushed the government’s budget deep into the red for this financial year.

Hon. Finance Minister Roy McTaggart has outlined the details of the additional expenditure in a Supplementary Appropriation bill to the Legislative Assembly covering the period from January to December this year.

In all, it totals CI$142.8 million of which the largest amount - CI$40 million - is for direct costs associated with the jurisdictions battle to suppress COVI-19.

That is made up of purchasing supplies to mitigate COVID-19, extensive testing for the presence of COVID-19 in the population, cost of air bridge flights between the UK and the Cayman Islands and other specific Government decisions taken in response to the pandemic.

A further CI$23.1 million covers financial assistance to the most vulnerable, displaced tourism workers and non-Caymanian residents.

There’s also CI$9.5 million for micro and small businesses relief efforts.

Other additional charges on the budget are:

• $20.9 million for a temporary loan to the Cayman Islands Airports Authority

• $20.1 million for additional work on the John Gray High School campus and other capital works

• $16.3 million for operational support for Cayman Airways Limited

• $6.1 million to increase the regulatory capacity at the Cayman Islands Monetary Authority

• $3.0 million for the purchase of laptops for students in public schools

• $2.4 million for the construction of the West Bay Police Station, and

• 1.4 million for the establishment of the Cayman Islands Regiment.

Also impacting on the government’s budget is the CI$500 million to cover a CI$330 million Line of Credit that the Government has secured, plus the capacity is sought to borrow an additional $170.0 million, should this become necessary, according to Finance Minister McTaggart.

There’s also the financial impact of the Government Guaranteed Loan Scheme for Medium and Large-Sized Businesses where the Government will guarantee or be liable for 50%, or $100.0 million, of a maximum loan facility of $200.0 million.

As explained by Mr McTaggart, “the government always endeavours to ‘match’ a request for an increase in expenditure with a corresponding reduction to expenditures, though this is not always possible 100% of the time.”