TODAY’S GOVERNMENT BUDGET STATEMENT WILL BE CLOSELY MONITORED

By Staff Writer

This Wednesday’s first Budget Statement from the National Coalition For Caymanians (NCFC) government is expected to set the baseline for the administration’s economic management for the remainder of the governing period.

A general indication of the direction of travel has already been indicated in the recent Strategic Policy Statement (SPS) presented approximately three weeks ago.

Coming as close as it did to the Budget, not much change is anticipated.

Finance Minister Anglin had stated: “This SPS is built on a solid foundation of common sense and pragmatism. Government has taken a conservative approach to the management of public finances, which will bring about stability in resource planning and execution policies.”

However, in response to queries raised by the Opposition, Mr Anglin had hinted that he might take another look at some of his announced new or additional revenue-raising measures.

He faced criticism of placing too heavy a burden on the financial services sector, raising concerns that additional fees would only be passed on to clients and consumers.

One of the key concerns has been the risk of a deficit as projected in the April 2025 Pre-Election Financial Update which had raised the prospect of a likely government deficit of KYD26.2 million this year.

That became the topic of much debate and speculation in the days leading up to the election, with some political campaign speculation suggesting a deficit of up to KYD60 million. The issue again featured prominently in the SPS debate last month, causing heated exchanges.

To counter the deficit risk, the NCFC government proposed in the SPS a range of measures, including spending freezes, cost-cutting and revenue-raising, which it indicated would turn the tables with a comparatively small surplus of KYD10.2 million.

But Opposition Leader Joey Hew (People’s Progressive Party - PPM/Progressives) wasn’t impressed: “Despite collecting record revenue, our entire public sector surplus is CI/(KYD)14.9 million less than for the same period last year. That, we take as a warning sign.”

The PPM had also accused the NCFC government of pursuing what it called a policy of “tax, borrow and spend.” Former finance minister Roy McTaggart said: “With all of this, they can only muster surpluses of $6.5 million in 2026, $9.3 million in 2027, and $13.8 million in 2028.”

On the other hand, another ex-finance minister, Chris Saunders(of the short-lived former PACT administration), had supported the NCFC government’s revenue-raising moves, claiming that the financial sector, especially the banks, were raking in huge profits in Cayman compared to their global counterparts.

In the SPS outline for the 2026 fiscal year, the income-generating measures will be mainly placed on the financial services sector, land and property transfers, and crucially, the reintroduction of mandatory identification for all work permit holders, which comes with a fee attached.

From the financial services sector, the estimated yield is $47.7 million, while domestic fees, which include stamp duty on high-end land transfers and work permit-related fees, are expected to bring in total $18.7 5 million.

Various trader license fees totalling $4.62 million, made up mainly of Special Economic Zone trade certificate fees and local company control licenses, or LCCL fees.

Projected operating revenue over the two-year SPS period (2026-2028) is forecast to total $3.864 billion; broken down as $1.252 billion in 2026, $1.296 billion in 2027, and $1.316 billion in 2028.

How the projections in the details of today’s Budget Statement align or deviate from the last month’s Strategic Policy Statement (SPS), will be closely monitored.