Over the last two years, the COVID-19 pandemic has cost the Cayman Islands government at least $333 million, an auditor general’s report has found.
The report on government’s COVID-related finances, released on Thursday, 12 May, looked at the estimated total financial impact to Cayman from the pandemic, which found that the government had spent almost $202 million on expenditures connected with its COVID response, with nearly $131 million in lost revenue.
“I along with the rest of the citizens of the Cayman Islands welcome the actions taken by successive Governments to suppress the spread of the disease,” Auditor General Sue Winspear said in a statement accompanying the report.
“There is no doubt that [the] Governments have succeeded in preserving life during the pandemic. However, the actions taken, while sheltering residents from the worst effects of the virus for a significant period of time, have had a substantial financial impact, which we estimate to be at least $333 million over the two years to March 2022.”
She pointed out that COVID-19 has had a significant impact on global health, societies and economies, and “the Cayman Islands has not been spared from this”.
In mid-March 2020, the government started to take a number of actions to suppress the spread of the disease, and many of these have continued, she said.
Those measures included the closure of Cayman’s borders, the operation of quarantine facilities, a local lockdown, and the purchase of essential medical supplies, among other initiatives.
“In the 18 months to 30 September 2021, the financial impact of the Government’s response to the pandemic was almost a quarter billion dollars,” Winspear said.
“It was no accident that the Cayman Islands had a unique and sustained period of no community transmission while the pandemic raged in most other parts of the world. It is no coincidence that we have not suffered the large scale hospitalisations and deaths experienced in most other jurisdictions, as we slowly and strategically reopened our economy and ports. Rather, our success is testament to the work of thousands of public servants and other concerned stakeholders who worked tirelessly and with personal sacrifice to support the elected governments,” Manderson said in statement Thursday.
What the report says
The 37-page report, which was the final in a trilogy of audits on ‘Improving Financial Accountability and Transparency’, pointed out that in the six months between 1 Oct. 2021 and 31 March 2022, the financial impact was estimated to be $85 million.
Government “incurred and committed an additional $70 million in expenditure” while foregoing revenue of around $14.6 million during this period.
“The actions taken by the Government, particularly the closure of the border, had a huge impact on the tourism industry, and this has contributed to the financial impact. Half of the additional expenditure was to support individuals and businesses, particularly those in the tourism sector, and the majority of foregone revenues were also because of lost charges and fees from tourism,” Winspear said.
The government has been paying monthly stipends to displaced tourism workers since the borders closed.
When it came to healthcare costs, the report stated that government had spent an estimated $43.9 million from March 2020 to March 2022, including on personal protective equipment, medical supplies and equipment, among other items.
According to the auditor general, the government was spending $1 million a month on COVID testing, up until August last year. Winspear noted that this monthly cost has most likely increased in response to the rising numbers of community transmission cases in Cayman late last year, although no updated figures on the cost of the testing was available to the audit office since September 2021.
The report said it is expected that these costs will continue as the pandemic stretches on.
“The financial consequences of COVID-19 could be with us for some time. The Government continues to manage the spread of the virus through testing and vaccinating people, and it could take some time for the tourism sector to recover fully to pre-pandemic levels. We will continue to monitor the additional costs,” Winspear added in her statement.
As of 30 Sept. 2021, the date up to which audited accounts are available, the government’s financial support to local businesses and impacted workers, which came to $66.2 million, accounted for about half of its expenditure.
The majority of this expenditure, about $61 million, went towards supporting the tourism industry, while $4.18 million was spent to help micro and small businesses.
As at 30 Sept. 2021 government had spent $15.7 million on quarantine and social distancing.
When it came to public sector personnel costs, government spent $6.5 million, which included overtime pay for government employees, including police, Customs and Border Control staff, and healthcare workers. This figure also included the one-off honorarium paid to some public sector staff for their efforts over the pandemic.
The Health Services Authority and the Royal Cayman Islands Police Service incurred the highest additional personnel costs, $3.2 million and $2.5 million, respectively.
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