House approves second supplementary estimates

Wednesday, January 16, 2019

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KINGSTON, Jamaica — The House of Representatives yesterday approved the second supplementary estimates, which show that the administration is to spend an additional $11.45 billion for this fiscal year.

The estimates reveal that the budget has been increased from $791.11 billion to $802.56 billion. Recurrent (housekeeping) expenses have moved from $572.46 billion to $582.5 billion, for an additional expenditure of $9.65 billion.

In terms of capital (development) spending, this is proposed to be increased by $1.36 billion, moving from $218.64 billion to $220.04 billion.

In his remarks, Minister of Finance and the Public Service, Dr Nigel Clarke, said the fiscal profile for the period ending October 2018, is consistent with the achievement of the primary balance target of seven per cent of gross domestic product for Financial Year 2018/19.

“Provisional data indicate that Central Government operations to end October 2018 generated a fiscal surplus of $1.3 billion, reflecting an improvement of $11.6 billion relative to the deficit of $10.3 billion projected in the first supplementary estimates. The primary surplus amounted to $78.8 billion, which was $9.7 billion or 14.1 per cent higher than the $69.1 billion targeted in the First Supplementary estimates,” Clarke noted.

He said this favourable fiscal performance resulted from a confluence of higher than projected revenue and grants and below programmed expenditure.

Revenue and grants were ahead of the First Supplementary Estimates by $5.4 billion or 1.6 per cent.

Clarke noted that this performance was driven mainly by the strong performance of Tax Revenue, which was $8.2 billion better than the revised Budget.

“The revised projection for revenue and grants for financial year 2018/19 is $623.8 billion, representing an increase over the first supplementary estimates of $14.8 billion or 2.4 per cent. Tax revenue is projected to provide the largest contribution to the surplus, with an over performance of $10.5 billion relative to the first supplementary estimates of $526.9 billion,” the minister said.

Meanwhile, Clarke noted that as a demonstration of the administration's commitment to fiscal responsibility, the Government has continued to take steps to manage and prevent public expenditure arrears.

He pointed out that tremendous progress has been made in reducing not only the arrears of the central government, but also the arears of the local authorities, as was evident in the first supplementary estimates.

Some $2.6 billion has been set aside in the second supplementary estimates to assist ministries, departments and agencies (MDAs), in clearing domestic expenditure arrears.

The finance minister said of the $2.6 billion provided, $1.388 billion is for public utilities, of which $711 million will go towards addressing chronic arears to the National Water Commission; and $663 million for electricity, including $118 million for the local authorities, and $544 million related to MDAs.

Another $14 million is to address arrears in telecommunication services.

Other legacy arrears that the Government has taken a decision to address in the second supplementary estimates are $425 million to clear outstanding vacation leave payments to employees of the former Jamaica Customs Department and Tax Administration Department; and $325 million for outstanding refund to the Spectrum Management Authority (SMA).

“This outstanding amount goes back to 2013 when the then Cabinet gave approval for the retention by the SMA of 10 per cent of the proceeds of the auction of the 700 megahertz spectrum licence fee to improve technical capacity to monitor the use of the spectrum and to ensure that the licensees have unencumbered access to the spectrum,” Clarke said.

“The SMA has programmed the outstanding amount as capital expenditure towards the upgrade of the spectrum monitoring capabilities of the authority in financial year 2018/19,” he added.

Other areas of significant increases include $2.6 billion provided to the Ministry of Economic Growth and Job Creation to undertake mitigation and road maintenance works; $2.069 billion to the police department; and $963 million in increased subvention to the University of the West Indies, University Hospital of the West Indies and the Norman Manley Law School.

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