Highlights from budget speech by Minister of Finance Nigel Clarke

Friday, March 15, 2019

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PUBLIC PROCUREMENT REFORM

Public procurement reform, pursued over the last five years, will come into force in the next financial year.

I remind this House that the Public Procurement (Amendment) Act was passed in August, 2018 and two sets of related regulations were passed in June and July, 2018.

I have requested of the Governor General that the Public Procurement Commission (PPC) and the Procurement Review Board be issued their instruments of appointment, effective April 1, 2019.

Since the launch of the Electronic Procurement System, almost all GOJ procuring entities are using the system.

The training and on-boarding of suppliers is an on going activity and many private sector industries have already been trained and are using the system

The new Public Procurement Manual (PPM) will be available by April 2019.

All 43 Standard Bidding Documents have been completed by the drafting consultant, and the Technical Working Group will be finalising the revision exercise by April 1.

The final set of regulations, which addresses the registration and classification of suppliers, and which can only come into effect after the establishment of the Public Procurement Commission, will be tabled in the first quarter of FY 2019/20.

The new procurement regime will allow for:

• Set-Asides – which reserve a portion of the annual procurement budget for Jamaican Micro, Small and Medium-Sized Enterprise suppliers (MSMEs), and

• Domestic Margins of Preference which allow for preferential treatment of Jamaican suppliers in accessing GOJ procurement contracts in specific circumstances.

I intend to table the Set-Aside and Domestic Margin of Preference Orders in the first quarter of FY 2019/20.

The new procurement regime will enhance the potential for Jamaican MSMEs to compete for larger shares of Government of Jamaica procurement contracts.

This, represents Economic Opportunity for All in action.

PRIVATE PENSION REFORM

Pension funds have over $500 billion in assets and play a critical role in securing a stable future for retirees, and providing a pool of domestic assets that can be productively invested.

Regulations to broaden the pool of assets that pension funds can invest in were tabled in the House in February. Comments from the Opposition are being incorporated and the regulations will be re-tabled after the budget.

Private pension reform will address vesting, portability, concurrent membership in pension arrangements, dependent disability pension and indexation, as well as more effective regulation by the Financial Services Commission and will incentivise increased participation in pension plans.

We will table the pension reform bill in Parliament during the 2019/20 financial year.

This Government intends to broaden social protection by increasing the percentage of the workforce that have access to pensions.

This is Economic Opportunity for All.

GOVERNMENT PENSION REFORM

The Government passed groundbreaking public pension reform last year, the culmination of a decade of work. We now intend to implement technology to ensure that public sector officers benefit from efficient and timely processing and payments of their pensions.

Today, the public pension system is paper-based and manual. It suffers from incomplete records that are dispersed. Service records have to be compiled manually resulting in extensive delays in the approval of the pension benefit.

As such, the Government is implementing the Public Employees Pensions Administration System (PEPAS) an online application which will be accessible to stakeholders via secured Internet, and eligible public sector employees will be able to view their pension-related service records and entitlements online. The application will automatically compute pension and other welfare benefits for eligible employees.

We are now engaged in training and data input and our aim, eventually, is that for every public officer, your first pension cheque is received one month after your last pay cheque.

This is Economic Opportunity for All.

PUBLIC SECTOR REFORM

Wage Bill Agreement:

The Government is pleased that unions representing over 95% of public sector employees have signed a four-year wage deal for the period 2017-2021. I thank the various unions for their professionalism in the negotiating process.

Mr Speaker, the public sector wage bill represents the single largest allocation in the budget, aside from debt service, and so the management of the growth of the total size of the wage bill is of strategic importance and has an impact on every Jamaican.

Public Sector Transformation therefore remains an ongoing reform.

For the first time, Jamaica is projected to meet the wage to GDP target of 9% for FY 2018/2019 under our fiscal responsibility law.

However, the structure of public sector compensation is overly complicated with over 325 separate grades and it is non-transparent with over 175 allowance types that breeds inequities in ministries, departments and agencies and across the public sector.

This, represents a fiscal risk as attempts to address genuine imbalances in public sector compensation can have unintended, unforseen consequences.

The Government will be conducting a review of public sector compensation with the aim of simplfying and streamlining public sector compensation, making it more transparent and equitable while addressing imbalances and inequities over time. The Government intends to work closely with our partners in the union to this end and to complete prior to the start of negotaitons for the next bargaining period.

We have accelarated the rationalisation of public bodies and a number of mergers, privitatisations, reintegrations and related actions have been announced.

We intend to complete the implementation of shared corporate services in human resource management in this financial year and begin shared corporate services implementation with respect to audit and public relations.

We will be making greater use of technology to bring greater efficiency to public service delivery and to control costs.


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