$4-b in JEEP’s tank - Spending to start before end of March

Phillips says programme to start soon, despite $10-b budget shortfall

BY INGRID BROWN Observer senior staff reporter browni@jamaicaobserver.com

Thursday, February 09, 2012

THE People's National Party Government yesterday reported that J$4 billion has been found to finance the Jamaica Emergency Employment Programme (JEEP) despite announcing a $10-billion shortfall in the country's finances for the present fiscal year which ends March 31.

Last month, the newly installed administration reported that the majority of the funds from the controversial Chinese-funded Jamaica Infrastructure Development Programme (JDIP) which it was hoping to have used to kick-start the JEEP, had either been spent or committed already.

But yesterday Finance Minister Dr Peter Phillips, while not providing specifics, said that some of the money for rolling out JEEP had been identified from the "reorientation of expenditure in the JDIP of which there were over commitments.

"Not all of these commitments were at the point where they could not have been retrieved and so there is that and other capital commitments that were not drawn down in the current fiscal year, which were sacrificed to JEEP, and which we think can be revived," Phillips told journalists during a news conference held at the prime minister's office, Jamaica House in St Andrew.

Phillips said that a portion of the money for JEEP, a programme which the party campaigned on during the December 29 general elections, will be spent this fiscal year.

Transport and Works Minister Dr Omar Davies is expected to provide a comprehensive statement on the employment programme in Parliament and according to Phillips this will include the implementation schedule which will extend over more than one fiscal year.

The finance minister, however, dismissed questions raised as to whether or not the National Housing Trust (NHT) would be used to fund JEEP and other programmes, based on his announcement that the housing agency has significant amount of accumulated resources which is an important stimulus to the construction sector.

"The NHT makes investments in building houses and it can build X number of houses in a year or it can build X plus Y number of houses. We are trying to see how big we can make Y, so that is not that we are going to use money for JEEP or anything else," Phillips said.

According to Phillips, the question arises as to the extent to which the NHT will be able to invest its accumulative savings deposits by the contributions and the extent to which any fiscal programme will accommodate those expenditures.

"Which means simply put that expenditures there would have to be compensated for by constraints elsewhere and that since that is one that can have a multiplier effect in the economy because of its ability to generate activity in the construction sector, we are looking particular closely at it as one of the means to stimulate growth while maintaining strict budgetary constraints," he said.

Phillips painted a gloomy picture of the state of the country's fiscal operations for 2011/2012 ahead of his visit to Washington next week to continue discussions with the International Monetary Fund (IMF) and other multilateral agencies.

"It is apparent that the fiscal programme of the previous government had gone off track disastrously during the second half of 2011 and as a consequence there is now a fiscal gap of some $10 billion for the current fiscal year," he said, adding that "Cabinet has agreed to measures and adjustments which will be reflected in the supplementary budget which is to be tabled in Parliament later this month.

Given the gaps, the finance minister said that cuts in supplementary estimates will be substantial, with most coming from capital expenses.

Additionally, he said that there are over 12 billion in arrears which will be brought over to next year's budget.

"Given the fiscal challenges that now exists in the 2011-2012 fiscal year, the greater portion of these arrears would be rolled forward in the 2012-13 fiscal year and this will result in a significant reduced capacity for what you might call new expenditures," he said.

Phillips said that the Government will now recognise the perimeters in which the medium-term framework will have to be cast for the budget of 2012/13 and succeeding years.

Tax revenues, he said, are projected to be down by $14.6 billion which is 6.6 per cent below the revised target of August 2011 and with indications of the continuation of a shortfall through March 2012.

He said that there has also been additional expenditure demands on the budget over the period as there were amounts allocated for the December 29 general elections, provision of vehicles for security forces, additional recurrent costs that the budget had to bear because of the JDIP overruns and commitment fees for the contract for new buses which was signed by the ministry of finance towards the end of last year.

There are also arrears of some $7.7 billion on the capital side, including $2.2 billion for JDIP overruns, revenue shortfall in the Clarendon Aluminium Partners of $5.2 billion and other arrears in the Ministry of Transport and Works of $250 million.

In light of this, Phillips said that Cabinet has reaffirmed commitments to taking necessary corrective measures and this, he said, will become apparent in the laying of the supplementary estimates where the main focus for the remainder of this fiscal year will be a reduction of expenditures to suit the available resources.

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COMMENTS (31)

Evan Archer
2/9/2012

@ Raymond Clarke : like so many of us , you appear to have poor recollection. For sometime , prior to the Gen. Elections , the PNP stated that the source of funding for the JEEP , would be JDIP ; at that time , less than 21/2 years into a 5 year project , funds were expected to be there. Just prior to the JLPs loss in the elections , substantial amounts became , ahem, ' committed ' . Now portions , once again , have been ' freed-up '.

Cookie Bulla
2/9/2012

I give the PNP 2 terms to make Jamaica a first world country.................Am I way over my head on this one?

RED ANTS
2/9/2012

@Tom Stroke!Welcome back,You will hear in due time where the money coming from.I notice every week a Councillor jumping of the park bus

Evan Archer
2/9/2012

@ Fall mouth : Concrete slabs , made from domestic raw materials , for road repairs - seems like a reasonable consideration .

Evan Archer
2/9/2012

@Tom Stroke : JDIP cost overrun , or overcommittment ; it's just a matter of semantics mixed with diplomacy. It appears , that there is more behind the words , than what seems obvious.

Evan Archer
2/9/2012

@Jay Brown ; the $10b shortfall , was in the Budget . The JDIP , the source of the $4b , was not a part of the Budget .
BTW , that J$10b shortfall , has been carried forward for some time now . Recollection tells me , that there was a shortfall of J$15b or so (per the JLP) , when they took over in 2008.

Luv Quest
2/9/2012

@Tone Bag…..I truly don’t know what to make of your comment. When you are trying to address or rebut a comment; the least you can do is write in a manner that people can understand. Tone B = clueless…..We all wish we knew what you were talking about. At least one period (full stop) and a comma would make a difference. As far as managing our country and developing our infrastructure; we want results. Politicians are not doing us any favors; they have a responsibility to govern truly.

Evan Archer
2/9/2012

This gov't has good intentions . It is noted however, that one of the proposed drivers to get the economy going , is new housing construction. Apart from labor , a major portion of the components , in this industry has to be imported. With the econ. as it now is , that pressure on fx , may be counter productive .
Emphasis, should be focused on production , which primarily consumes locally produced raw material .

Maxwell Coore
2/9/2012

This must be the epitome of a contradiction. Try as I might, I just don't get it. $10 Billion shortfall and budget cuts, but $4 Billion for jeep!! Someone help me with the Math please!!
For the sake of all concerned: PLEASE LEAVE THE N.H.T. ALONE!!!! It should not be, that one of the most outstanding legacies of the Hon. Michael Manley is continually plundered at will by his own party; in the cause of what??
Watch it PNP!! The road to hell is paved with the best of intentions!!

Jam girl
2/9/2012

I want to say this we need to ask question like where is the money coming from it is simple X $ from JDIP and Y $ from what sector in country, if they find it they should be able to us from where. the NHT was in trouble the other day before the PNP left office now it is in a viable position if they are going to use it they should say so and please do not destroy that industry again. WE need to build on stuff left by the other party and fix the one they were no able to improve this is our home

J J
2/9/2012

@ wanda woman I ask the question for which I need an answer as for the JDIP money have evr heard of Forward Contract (check it out) I have worked on projects with enough MP over the past 11 years to know which party can better manage the economy and plus I have been alive long enough to remember enough from the 70's to now Plus I am not fooled by media spin doctors and Private Enemies who act like friends in Public

Tone Bag
2/9/2012

Raymond Clarke incoming Govts dont know how much money theyll find but they have an idea where to look Govt Spending is determined by the partys ideology which in turn inform their priorities Devon T & Ricky Dread I wish I knew what you were talking about Luv Quest = D Walker you can see all these improvements but at what cost ask Mike Henry he can tell you Red Ants everyday party politicking so? Lets unite as Jamaicans to build a better nation and leave the orange and green for election time

Jay Brown
2/9/2012

We found the money !! Yeah we found the money.
Where do you find $4b when you have a $10b short fall.
Someone help me with this maths

Tom Stroke
2/9/2012

Jamaica is really in the dark here, what fraction of the $4 billion is coming from JDIP? Where else is the additional money coming from? How can there be expenditure demands on the budget due to “additional recurrent costs that the budget had to bear because of the JDIP overruns” yet money can be found from the “reorientation of expenditure in the JDIP of which there were over commitments” for JEEP? Last week the health minister announced the hiring of 203 nurses, how will their salaries be paid? What will have to be cut, or, what will be the tax package that will be imposed on that poor ghetto woman and her hungry belly children?

RED ANTS
2/9/2012

yes the mother of all scandal.What road? the half mile in Christina,The furniture for NWA office,the billions in cost overruns.no wonder the JLP got the beating they deserve.

Tom Stroke
2/9/2012

robert heath
2/9/2012

where the money coming from ? and how will we pay for it ? will this be a new loan ? or is it a part of the many sums that was borrowed by the previous finance minister ? talk up Peter Phillips.
God knows we will pay for the JDIP money we borrowed and used to buy votes.
Our loan portfolio increased by 51,000 billions under the honerable Audley Shaw, yet we make a mountain out of 4 billion that be used to do small work which was said it is temporary

Sean H.
2/9/2012

The picture is precious - three clueless stooges!
*
woeful wanda, those yet unborn are already slated to pay back for what these clowns squandered in their previous tenure.

Tajai Grant
2/9/2012

@Devon T, Luv Quest - I concur. PNP, the architect of hand out and crash program

Ricky Dread
2/9/2012

Peter Phillips is a Political Scientist, Portia Simpson is a err politician, Andrew Holness is a Businessman? and so is Audley Shaw. The problems the country (and the world) faces are technical in nature and we keep turning to people without the requisite skills to solve them.
Makes sense to me

wanda woeman
2/9/2012

@J J, a better question to ask than where is the $4b to come from is where has the billions of JDIP money gone, don't you think? Hope we don't see a repeat of the administration just gone.
Have you ever given serious thought to what would have happened to this country, you me and your children and grand children if the JLP had gone back into office?
I think of it everyday and I shudder, not so much for me but for those yet unborn.

Joe Wonder
2/9/2012

Cup of coffee and the Observer - $3
Bolo-work - $4 bill.
Ideas presented to the public by PNP - priceless ....

Luv Quest
2/9/2012

They argue that JDIP is the mother of all scandals however under JDIP we have seen significant road works to date, Downtown, Barbican and Cross roads. All these projects seems well executed; are we to expect these projects to be halted and replaced by an idle orange clad mob wasting taxpayers’ money? PP indicated that the Government has found the money to spend on JEEP, they must disclose the source of the funds; this is not anyone’s private business or family business.

Luv Quest
2/9/2012

@RED ANTS…..why are you so comfortable with being nonsensical? Talking about colored lenses; is it possible for you to see in any color but orange? Your reasoning is defined as irrational ranting.

fall mouth
2/9/2012

Why won't the PNP use prefabricated cement squares to build and repair roads, especially in the interior? More jobs for everyone. More cement used. Crushers used to cut the stones to the required sizes. A plant in every parish will provide jobs for the same kinds of jobs used in the bauxite plants. People needed to drive and repair trucks and tractors and conveyor belts. Farmers roads will be opened up. More goods to the market. The money will circulate to provide other jobs.

J J
2/9/2012

Where is the 4 billion coming from???? And what price will we have to pay??? Are we going to see a repaet of the 76-80 period???

Devon T
2/9/2012

If you dont stand up for something you will fall for anything. Can anyone guess why this is being rushed before the budget? This is why i would participate in a protest because right in front of our very eyes, this man is trying to hoodwink us. I await the response from certain "bloggers" when this story come to bump.
"A wise man stays afar and sees danger...Only a fool run into it..." we will always get basket to carry water because we are a guillable bunch. sorry guys but truth hurts.

0o k
2/9/2012

Glad the JEEP finally rolling. Let's see how this thing pans out!

RED ANTS
2/9/2012

Shaw need to be home school,where was our tax money going why the country is left with huge tax gap.Henry as become the scapegoat over JDIP,the entire JLP cabinet owes it Jamaica.JDIP is the mother of all scandal since 50 yrs of independence.Wednesday was the day the critics were all waiting on but i wish they remove the green lens before they make comments and call the spade a spade and not making it look like the golden spoon under the JLP government.

RED ANTS
2/9/2012

Thank you PNP for looking back at the construction sector,This is one sector the JLP neglected during it's time,I won't put my mouth in the ground and repeat the JLP mash up construction sector.The critics can talk against JEEP as much as they want,at least the PNP is trying to fulfill it's promise,the critics will forget about the jobs jobs and more jobs promise and not consider it as bag a mouth which the JLP didn't even tried to fulfill until they realize jobs would become an election issue.

Raymond Clarke
2/9/2012

When will Jamaican learn! People just don't "find" $4b. When politician makes election promises, they should already know where the money is coming from. Now that the election won, of course they're going to "find it" using a magic wand I suppose.

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$4-b in JEEP’s tank - Spending to start before end of March