GOVERNMENT 2025 SURPLUS BALLOONS AFTER SEVERE COST-CUTTING

The Cayman Islands Ministry of Finance has reported that it has far exceeded the surplus projections for 2025 outlined in last November’s budget statement .

According to Hon. Minister for Finance, Rolston Anglin, preliminary figures suggest that the surplus quadrupled from its target of around CI$10.3 million. The unaudited figures to the end of 2025 put it at CI$43.7 million after a series of cost-cutting measures undertaken by the National Coalition For Caymanians(NCFC) administration since coming into office last April.

The issue of the government’s 2025 surplus was one of the dominant issues of the 2025 election campaign and subsequent budget debate when the NCFC government presented its inaugural budget last November.

QUESTIONS

During last week’s meeting of Parliament, the surplus issue again surfaced, prompted by a question from Hon. MP for George Town East, Roy McTaggart, who served as finance minister in the then People’s Progressives Movement (PPM/Progressives) government up to 2021.

His question about the surplus was one of a barrage of questions thrown at the government during last week’s sitting of Parliament.

“Can the Honourable Minister for Finance & Economic Development say whether the Government ended the 2025 financial year with a surplus and, if so, what is the amount of the surplus?” asked Mr McTaggart.

Responding, Hon.  Min. of Finance Anglin gave this outline: “The most recent preliminary estimate for core government’s 2025 surplus is $43.7 million. The fact that there is a preliminary estimate of a 2025 surplus being $43.7 million does not mean that it was bound to occur.”

Mr Anglin further stated: “The preliminary surplus results from the fact that the current government took decisive action to arrest the trajectory that was heading towards a deficit result.”

He went on to detail what he described as “decisive action” via a series of “expenditure reduction initiatives”.

According to Mr Anglin, these included pausing non-essential recruitment through December 31 2025, which he said was aimed “to allow the government’s budgets to reset to sustainable levels for the 2026- 2027 budgets.”

He also pointed to reducing spending on supplies and consumables by a minimum of 10% of forecast expenditure, including official travel, professional fees and security services. Spending by statutory authorities and Government companies, along with payments to suppliers and transfer payments were also cut in some cases up to 15 per cent.

Mr Anglin also spoke about efforts to prioritise “suspending or deferring capital projects not yet contractually committed to ensure capital expenditure and investments yield reductions to a minimum of CI$50 million, with the aim to not exceed CI$102 million for 2025.”

A DEEPER DIVE

The dramatic difference between the projected and actual - though yet unaudited - surplus was noted by Hon. Deputy Leader of the Opposition Kenneth Bryan in commenting on what he described as “the very significant surplus, very contrary to the projections of a CI$27 million deficit.”

He proceeded to raise the questions: Can the Minister outline these cutbacks that he outlined? How much in total did it add up to, and also which capital projects did they come back on at the amounts?

Min. Anglin: “The cumulative total of the expenditure reductions outlined was as follows: CI$20 million in personnel costs, CI$14 million in supplies and consumables, and CI$11 million in the outputs to Statutory Authorities and Government Companies (SAGCs).”

He also admitted that several targets were not met, among them CI$6.2 million for non-governmental suppliers and CI$6.8 million for transfer payments.

However, the Finance Minister also explained that ”in this year’s surplus were some historic levels of revenue” including stamp duty and driver’s licenses fees, while hinting at more encouraging financial news to come from the government.