Premier Delivers Budget Policy Statement

Grand Cayman, 8 December 2023 – The United People’s Movement (UPM) Government outlined its 2024-2025 budget when Premier and Minister for Finance & Economic Development Hon. Juliana O’Connor-Connolly delivered the Budget Policy Statement and the Budget Address before presenting The Appropriation (Financial Years 2024 and 2025) Bill, 2023 to Parliament today (Friday, 8 December.)

The Premier introduced the 2024-2025 budget themed “Nurturing Our Future: A United Sustainable Path to Recovery, Hope and Prosperity.”

She said, “We are confident that our renewed sense of purpose, unity and commitment will help us chart the way forward as we work to create a sustainable path to recovery, hope and prosperity. From our commitment, springs our vision – the vision of a unified Government and country, focused on continuing our Islands’ ongoing economic recovery in a measured and sustainable manner that provides hope and prosperity for all Caymanians. “

Premier O’Connor-Connolly gave a summary of the main highlights of the 2024-2025 Budget, including the Government’s key fiscal policies and headline figures in the Budget Address.

She noted that the 2024-2025 Budget is in full compliance with the Principles of Responsible Financial Management as prescribed by the Public Management and Finance Act, or PMFA and those specified in the Framework for Fiscal Responsibility (the FFR). 

Key features of the 2024-2025 budget were listed as follows:

• Core Government is forecast to earn Operating Revenues of $1,095 million in 2024 and

$1,137 million in 2025;

• Core Government’s Operating Expenses (inclusive of Financing Expenses) are forecast to be $1,052 million in 2024 and $1,083 million in 2025. Financing Expenses element of the preceding is forecast to be $18.4 million in 2024 and $24.7 million in 2025;
• Core Government Operating Surpluses are forecast to be approximately $43.0 million in 2024 and $53.2 million in 2025;
• Closing Cash Balances are expected to be$388.7 million at 31 December 2024 and $412.1 million at 31 December 2025; and
• Core Government Capital Expenditure and Investments are forecast to total $160.5 million in 2024 and $117.9 million in 2025.
• Capital Expenditure and Investments include Equity Investments into Statutory Authorities and Government Companies totalling $35.2 million in 2024 and $24.3 million in 2025.

The Premier noted that 2024 and 2025 revenue forecasts include new revenue measures. She said, “The decision to implement new Revenue Measures was not taken lightly and efforts were made to ensure that they were non-inflationary and did not have a direct impact on the average citizen and the already high cost of living.”

The new Revenue Measures are projected to yield additional revenues of $52.0 million in 2024 and $80.0 million in 2025 and are primarily related to:

• Administrative and regulatory-related fees, which are charged by the General Registry, the Department for International Tax Compliance, the Cayman Islands Monetary Authority and the Department of Commerce and Investment;
• Increases to work permit application fees;
• An increase to the import duty rate on hybrid and electric vehicles with a value of more than $70,000;
• An increase in the environmental tax payable with respect to hybrid and electric vehicles with a cost, insurance and freight value (CIF) of $80,000 or more;
• An increase to Customs fines and procedural fines;
• An increase in the fees for immigration-related visas and extensions; and
• An increase in the stamp duty rate is being contemplated for properties purchased in certain “high-end” geographical areas on Grand Cayman.

In order to meet all of the Government’s planned capital investments over the Budget period, the 2024 and 2025 Budget includes borrowings of up to $150.0 million over the two-year Budget period.

However, the Premier said, “Even with this proposed level of borrowings, the Government’s Debt-to-GDP ratio remains under a 10% level – which few countries in the world can match.”

She reiterated that, “Government does not borrow to fund its day-to-day Operating Expenditures and, it will only use the proposed borrowings to fund Capital Expenditure and Investments.”

The Government intends to make Capital Investments into Ministries, Portfolios and Offices of approximately $125.3 million in 2024 and a further $93.7 million in 2025.

The major investments in this category include:

• $31.9 million in 2024 and $33.9 million in 2025 for the continued expansion of educational facilities, including the construction of a new High School on Cayman Brac, the development of a West Bay High School and the continued expansion of the new John Gray High School;
• $15.1 million in 2024 and $13.5 million in 2025 for the expansion, maintenance and improvement of the road network;
• $11.8 million in 2024 and $8.6 million in 2025 for the Central Scranton Park, other various park and district upgrades, civic centres and jetties; and infrastructure and development;
• $7.4 million in 2024 and $4.2 million in 2025 for the improvement to the prison facilities; and
• $3.8 million per year in 2024 and 2025 for land acquisition for farming and the conservation, protection and securing Cayman’s natural environment.

Premier O’Connor-Connolly also noted that “The Government also believes in conservation and will be seeking Finance Committee’s approval to allow the use of $10.0 million from the Environmental Protection Fund for the acquisition of land, including beach property, for conservation purposes.”

The Premier ended the UPM Government’s Budget Policy Statement with a plea for ongoing unity. She said, “The Cayman Islands stands on solid rock today, Mister Speaker. With the support with every member of this House and the Caymanian people, we can build on the accomplishments of our past which contributes to a more resilient economy. As well as is the foundation of making our Cayman Islands a great place to live for everyone who calls these Islands home.”

The tabling of the UPM administration’s first public spending plan will be followed next week by the budget debate and Finance Committee deliberation. There will be a total of three readings of the Bill, and once passed the next legislative steps are for H.E. Governor Jane Owen to Assent to the Bill before it is published in the Cayman Islands Gazette as an Act.

Premier O’Connor-Connolly’s Budget Policy Statement may be accessed online at:

Premier Delivers 2024-2025 Budget Policy Statement — Cayman Islands Government

The Budget Address delivered by Premier O’Connor-Connolly in her capacity as the Minister for Finance & Economic Development may be accessed online here:

Laying the Foundation for Our People’s Wellbeing — Cayman Islands Government

The 2024 to 2025 budget documents can be found online at:

https://www.gov.ky/finance/publications

The live coverage of the Parliament proceedings may be viewed online at:

Ends.