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No budget, no sense!

BY BALFORD HENRY Observer senior reporter balfordh@jamaicaobserver.com

Friday, February 21, 2014    

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AUDLEY Shaw, Opposition spokesman on finance and planning, thinks that the government is making a huge mistake by not budgeting funds for natural disasters.

He also accused the government of turning the Tourist Enhancement Fund (TEF) into a new "feeding tree" to cover the costs of these exigencies.

"It is the untidiness of the situation which is most alarming," he told Auto.

The Ministry of Transport, Works and Housing had to do some financial juggling to find the $197 million to be spent on mending roads damaged by the recent floods in the eastern parishes recently.

The money will be used for rehabilitation work in St Mary and Portland associated with a tropical depression of January 18 to 20.

In his address to the House of Representatives on February 11, Dr Omar Davies, Minister of Transport, Works and Housing, said the repair bill would be met from the Road Maintenance Fund (RMF) ($147 million), and the Tourism Enhancement Fund (TEF) ($50 million).

While it was not unexpected that the government would turn to RMF, which is funded by the five percent allocation from the Fuel Cess received by the Road Maintenance Fund and used for emergencies, it was very unusual for TEF funds to be expended on road repairs.

Dr Davis explained the funds were put together as part of an emergency response, which seems to have been delayed at least two weeks as his ministry searched around for scarce dollars, to fill the gap left by the absence of the contingency allocation in the budget.

"Being acutely aware of limited fiscal space, my ministry has to find ways to finance the restorative works, without seeking additional resources from the Ministry of Finance," Davies told the House.

According to Shaw, hurricanes and natural disasters are commonplace for the region and not having a budget for these occurrences is an unwise move.

"The last budget I was in charge of (2011/12), I put in $1.5 billion as contingency to cover any natural disaster which occurred. A natural disaster contingency fund should always be in the budget: if you need it, you use it, but you cannot ignore it," he said.

The former minister has also dismissed suggestions, that the International Monetary Fund (IMF) does not subscribe to a natural disaster contingency fund in the budget.

"That's not true. When I was minister the IMF always demanded you put aside something in case of natural disasters, and I am insisting that the government needs to starting making that provision again in the 2014/15 budget," he stated.

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