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TCI on course to record budget surplus

Government officials in the Turks & Caicos Islands reported this week that the UK-administered territory is on course to record a budget surplus for the current financial year.

According to the administration’s report on quarter two (Q2) financial performance published on Monday, 29 October, the Turks and Caicos Islands Government (TCIG) is set to meet its strategic objective of returning a surplus this financial year.  The report shows that in the first six months of the 2012/13 financial year (Apr-Sep 2012), TCIG enjoyed an overall revenue surplus of $5.72m, which was $0.9m above the budget and an improvement of $10.0m on the same period last year.  Overview Recurrent Revenues for Q2 (Jul-Sep 2012) stood at $53.2m versus Recurrent Expenditure of $37.3m, resulting in a Recurrent Surplus of $15.9m.  This surplus was then used to fund Non Recurrent Expenditure of $6.6m, Capital Contributions of $1.8m, Debt payments of $7.3m and Herzog planned repayments of $0.5m, resulting in an overall Net Revenue Account Deficit of -$0.4m for the quarter.  The increase in debt payments made during the quarter was a result of TCIG’s commitment to reduce the level of outstanding debt through the use of windfall receipts collected this financial year.

As such, the unbudgeted NIB receipt of $6.1m received during the quarter was used to make an unbudgeted payment of $6.0m on TCIG’s Revolving Credit Facility.  For the year to date, a $5.72m Net Revenue Account Surplus was recorded. Total Recurrent Revenues stood at $102.4m versus Recurrent Expenditure of $72.6m, Non Recurrent Expenditure of $10.8m, Capital Contributions of $3.5m and total Debt payments of $8.9m.  Revenue Income for Q2 (Jul-Sep 2012) was $9.7m or (22%) above budget and $9.4m or (22%) above last year, despite there being challenges in relation to Accommodation Tax, Stamp Duty on Land and Work Permits and Residency Fees.  Total Year to Date Revenue was $7.8m or (8%) above the budget and $18.9m or (20%) above last year, this was due primarily to the effect of windfall payments from  Civil Recovery of $7.3m, and from the TCI National Insurance Board (NIB) of $6.1m.  Q2 Recurrent Expenditure was $1.3m above budget, but $5.1m below 2011/12. Savings compared to the previous year were primarily due to $4.7m being saved in employment costs as a result of the Voluntary Severance Scheme implemented last year.  Year to date Recurrent Expenditure totalled $72.6m, which was marginally ahead of the budget by $0.06m, but below the 2011/12 figure by $3.7m.  ‘One off’ Non Recurrent Expenditure was in line with the budget, and $4.8m below last year. The improved performance is due to reductions in payments of Historic Liabilities of just $0.3m and civil recovery costs of $4.1m.  Conclusion This commitment to publishing quarterly public financial statements is one of the new reforms brought about by the UK-led Interim Administration, and is also a legal requirement of all future Governments after the general election of 9 Nov 2012.

“This report continues the Government’s commitment to the transparent reporting of its finances, a cornerstone of good governance,” said Anya Williams, Deputy Governor and Head of the TCIG Civil Service.  “It also provides information about the steps being taken by the Government towards delivering a fiscal surplus in the financial year ending March 2013, as required under TCIG’s 2012/13 budget. Progress towards this objective was instrumental in facilitating fresh elections in this Territory. As this report shows, although things are improving, significant challenges remain and continuing tight cost control will be required to deliver the budgeted revenue surplus.”

 

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